Opinion of Advocate General
Mr President,
Members of the Court,
1. In order to maintain the position of spirit drinks as a major outlet for important agricultural products the Council adopted Regulation No 1576/89 of 29 May 1989 laying down general rules on the definition, description and presentation of spirit drinks (hereinafter the basic regulation). The Council laid emphasis on the fact that the good reputation which those products have acquired throughout the Community and on the world market is attributable to the quality of traditional products. That quality standard can best be maintained by two means:
2. Article 6 empowers the Commission to adopt special provisions. Those special provisions may govern indications used in addition to the sales description, including the use of compound terms including any of the generic terms defined in Article 1(2) and (4).
3. The Spanish Government claims that that legal effect of the implementing regulation is unlawful and that to that extent that Regulation must be annulled. Its main contention is that the Commission is not empowered to adopt such a derogation from the general rules in the basic regulation.
The claim that the application is inadmissible
4. Spain's action for annulment concerns a specific part of the implementing regulation, namely the second subparagraph of Article 7b(3).
5. There can be no doubt that what the Commission says is correct. Although paragraph 2 could have been more clearly formulated, the interpretation advocated by the Commission is sufficiently clear from both the structure of the article and the wording used in paragraph 2. Article 7b(l) sets out the basic rule, which corresponds to the Spanish Government's primary view, namely that the use of a compound term which includes one of the names listed in Article 1(4) of the basic regulation is lawful only if the alcohol in that product originates exclusively from the spirit drink mentioned in the compound term. Paragraph 2 is formulated as a derogation from that basic rule. That is shown by the use of the words however and may and is also apparent from the fact that the provision covers the presentation of liqueurs, since it follows explicitly from the definition in Article l(4)(r) of the basic regulation that liqueurs may be produced on the basis of spirits other than brandy. Having regard to its wording, paragraph 3 does not contain an independent derogation from the rules of the basic regulation. It lays down conditions for the liqueurs referred to in paragraph 2 to be sold bearing the names listed. That interpretation of Article 7b is also borne out by the preamble to the implementing regulation. It is there stated:
6. The Commission contends that the application reveals inconsistencies in its substantive elements — subject-matter, pleas in law or grounds and the form of order sought — and therefore is not in conformity with Article 19 of the Statute of the Court of Justice of the EEC and with Article 38(1 )(c) and (d) of the Rules of Procedure of the Court and that it must therefore be dismissed as inadmissible.
7. There may be instances in which the lack of consistency between the form of order sought and the submissions made in support thereof is such that no purpose would be served by ruling on the substance of the case. But that is not the case here. The Spanish Government has brought an action for annulment and set out the reasons on which it is relying. It has misinterpreted the relevant provisions and has therefore sought the annulment of a provision which, on the basis of its arguments, is not the appropriate provision to be annulled. However the problems that thus ensue cannot lead to the case being dismissed as inadmissible. The requirements laid down in the Rules of Procedure regarding the content of the application are met. Another point is that the inconsistency between the form of order sought and the subject-matter of the case may be significant when a decision is taken on the substance of the case. However I do not consider that those problems assume any importance in this instance. There can be no doubt as to the real thrust of the Spanish Government's claims, namely that it is incompatible with the basic regulation to allow liqueurs produced on the basis of ethyl alcohol of agricultural origin to be described by compound terms containing the generic term brandy. In determining that question it is immaterial whether that rule is contained in Article 7b(2) or in the second subparagraph of Article 7b(3). In its pleadings and at the hearing the Commission has shown that it has fully understood the background to the application for annulment and its object. Consideration of the substance of the case will in no way be prejudicial to the rights of the defence. I therefore find that there is nothing to prevent the Court of Justice from ruling on the substance of the case.
8. The misinterpretation which underlies the formulation of the claim might, however, be significant if the Court were to find that the derogation from the basic regulation contained in Article 7b is incompatible with the basic regulation as the Spanish Government maintains. The Court would then have to decide whether, in the particular circumstances of the present case, it is possible to alter the form of order sought, in such a way that its substance is reflected in the operative part of the judgment, that is to say by a finding that Article 7b(2) is unlawful. The Commission is right in saying that annulment of the second subparagraph of Article 7b(3) would serve no rational purpose. It would lead to the paradoxical situation that one of the conditions that is intended to prevent consumers from being misled by the use of compound terms would be removed while the rule which the Spanish Government in fact considers unlawful would — directly, at any event — not be affected by the operative part of the judgment. However there is no cause to take a position on that question before considering whether the Spanish Government's view that the derogation from the basic regulation contained in Article 7b is unlawful can be accepted.
The merits
9. The Spanish Government's main submission is that the derogation under Article 7b from the general rules in the basic regulation is unlawful on the ground that there is no authority for it in the basic regulation.
10. I consider that that question should be answered in the affirmative.
11. The Spanish Government is not just claiming that the implementing regulation is unlawful on the grounds that it contains a derogation from the rules in Article 5 of the basic regulation for which there is no authority. It also vigorously asserts that the implementing regulation is unlawful on the grounds that it is incompatible with Article 9 of the basic regulation. Article 9(1) provides that a number of specified spirit drinks, including rum and brandy,
12. The Spanish Government has made three further submissions.
13. Secondly, the Spanish Government claims that the implementing regulation fails to protect the interests of consumers and in fact is prejudicial to those interests. It further points out that the rules in the implementing regulation disregard Article 2(1 )(a) of Council Directive 79/112/EEC, under which the labelling of goods must not be such as to mislead the purchaser.
14. Thirdly, the Spanish Government claims that the derogations infringe the general Community law principle of equal treatment in so far as brandy producers are treated differently in three respects. First, the effect of the implementing regulation is that the name brandy can be used in the presentation of spirit drinks produced on the basis of other alcohol while other composite types of spirit drink must comply with the general rules of the basic regulation. In addition the reputation of brandy is impaired whilst that of other types of spirit drink is protected since their generic terms cannot be used for spirit drinks made using ethyl alcohol of agricultural origin. The result of the rule is that producers of ethyl alcohol of agricultural origin are favoured at the expense of producers of other types of spirit. Finally producers of authentic apricot-brandy, that is to say apricot-brandy made on the basis of brandy, are placed in a less favourable competitive position than producers who may make apricot-brandy on the basis of ethyl alcohol of agricultural origin.
Conclusion
15. For those reasons I propose that the Court dismiss the action against the Commission and order the Kingdom of Spain to bear the costs of the case while the Kingdom of Denmark should bear its own costs.
1 Original language: Danish.
2 OJ 1989 L 160, p. 1.
3 See the second recital in the preamble to the basic regulation.
4 Regulation (EEC) No 1781/91 amending Regulation (EEC) No 1014/90 laying down detailed implementing rules on the definition, description and presentation of spirit drinks (OJ 1991 L 160, p. 5).
5 See the Court's judgment in Case 230/78 Eridania [1979] ECR 2749, paragraphs 11, 12 and 13.
6 The preamble contains the following recital: in order to take account of long-established practices existing when [the basic regulation] entered into force, it should be permitted that certain composite names of liqueurs may be maintained even though the alcohol is not obtained or is not obtained exclusively from the spirit drink indicated; ... it is essential to specify the conditions for the description of those liqueurs in order to avoid any risk of confusion with the spirit drinks defined in Article 1(4) of the basic regulation.
7 See judgment of 7 April 1992 in Case C-358/90 Compagnia Italiana Alcool and Others v Commission [1992] ECR I-2457, paragraph 40.
8 Directive 79/112/EEC of 18 December 1978 on the approximation of the laws of the Member States relating to the labelling, presentation and advertising of foodstuffs for sale to the ultimate consumer (OJ 1979 L 33, p. 1).