Court of Justice 09-12-1981 ECLI:EU:C:1981:298

Facts and procedure

Conclusions of the parties

The Commission claims that the Court should:

Declare that the Italian Republic, by prohibiting the importation and marketing under the designation of ‘vinegar’ of vinegar which is not based on wine, has failed to fulfil its obligations under Article 30 et seq. of the EEC Treaty;

Order the Italian Republic to pay the costs”.

The Italian Government“expresses the hope that in its judgment the Court will reject the conclusions of the Commission”.

Summary of the submissions and arguments of the parties

The Commission maintains that the Italian rules in question under which only wine-vinegar and food preparations based on wine-vinegar may be imported and marketed in Italy and which restrict the designation “vinegar” to wine-vinegar, infringe the principle of the free movement of goods within the Community. In support of this submission it refers to the consistent case-law of the Court according to which “all rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions” (judgment of 11 July 1974 in Case 8/74 Dassonville [1974] ECR 837 at p. 852).

The Italian rules have no justification under the Treaty because they are not “necessary in order to satisfy mandatory requirements relating in particular to the ... protection of public health, fair trading and consumer protection” (judgment of 20 February 1979 in Case 120/78 Rewe [1979] ECR 649 at p. 662). It is common knowledge that vinegars which are not based on wine are not harmful to human health. Moreover, consumer protection is not in question as that requirement is satisfied if consumers are provided with sufficient information about the composition of the product which they buy, for example by means of a suitable label. That view is confirmed by the judgment in Case 788/79, cited above.

In the Commission's view the only possible explanation for the Italian rules, which moreover the Italian Government acknowledges, at least implicitly, is that they were adopted to provide an outlet for excess production of Italian wine. However, under no circumstances may such a reason justify the prohibition imposed on vinegar other than wine-vinegar.

• Therefore the Italian rules in question constitute an obstacle to intra-Community trade and work mainly to the advantage of national producers of wine-vinegar without being justified under the Treaty by “a purpose which is in the general interest and such as to take precedence over the requirements of the free movement of goods” (judgment in Case 120/78 cited above, paragraph 14 of the decision). Therefore the measures infringe Article 30 of the EEC Treaty without being justified under. Article 36.

• In the view of the Italian Government, the judgment given by the Court in Case 788/79 in the context of Article 177 of the EEC Treaty may not decide in advance on content and conclusions appropriate to proceedings under Article 169 to establish a failure to fulfil an obligation under the Treaty. Under the legal system of the Community these two spheres of action of the Court are different and separate, each having its own specific and different functions. The function of the procedure under Article 177 of the Treaty is confined to the interpretation of rules of Community law. On the other hand the correct and uniform application of those rules is a matter for national courts alone.

Therefore, although it is a rule of national law which has given rise to the question of Community law raised pursuant to Article 177 of the Treaty, the national rule is in no way the subject of that procedure.

What is more, in the context of that procedure of interpretation, the national rule becomes a “theoretical hypothesis” which is considered from an objective and extrinsic angle, that is to say, without a thorough examination of the situation peculiar to the Member State which promulgated it. Thus, in Case 788/79 the Court examined only Article 51 of Decree No 162 which is just one detail of a complex and homogeneous body of rules. That is not sufficient “to sustain definitive conclusions on the complex subject-matter at issue in this case”.

Such an analysis is moreover borne out by the case-law of the Court on Article 36 of the EEC Treaty. It follows from Cases 788/79 and 120/78 that “certain values of a social nature which are the inalienable heritage of the civilization of Member States must prevail over strictly commercial interests” and that the fulfilment of those fundamental requirements is still entrusted to the Member States which are thus responsible for protecting the needs arising from the specific situation of each State. Those needs, which reflect different traditions, customs and morals, are not necessarily the same in each region of the EEC and they form “incontrovertible historical facts which, moreover, the process of European integration is not meant to ignore or eliminate”.

In these circumstances, if the solutions adopted in the interpretative judgment in Case 788/79 should automatically apply to this dispute “they may be justifiably criticized for having entirely disregarded those essential values to which Article 36 of the Treaty alludes”, since in that judgment no consideration was given to the rules applying to vinegar in the light of the given facts arising from the situation in the country in question.

The Italian Government goes on to state that wine-vinegar is an agricultural product and with products of that kind the propensities and habits of consumers are conditioned by local agricultural production. Hence, in Mediterranean countries, where wine is produced on a large scale, “by established custom wine-vinegar is described, by antonomasia, as “vinegar”, whereas the position is entirely different in other non-Mediterranean countries in which vinegar is produced from various sources (malt, cider, mead, synthetic vinegar).

Consequently, according to the Italian Government, the objectives of the Community are not therefore to be achieved through “the stringent and formal application of rigid rules like Article 30 of the Treaty prohibiting national rules” but they should be achieved in the more appropriate and flexible context of-Article 100 of the Treaty. Moreover, Community action fits into that perspective as in its resolution of 28 May 1969 (Journal Officiel No C 76 of 17 June 1969) and of 17 December 1973 (Official Journal C 117) the Council included vinegar among the food products on which the Commission was to submit harmonization proposals but the Commission has not submitted a harmonization proposal on vinegar.

For those reasons the Italian Government maintains that the rules in question find justification under Article 36 of the EEC Treaty.

In this regard it points out first of all that the provisions at issue apply to all products containing vinegar not made from wine “without any discrimination between national and imported products”.

The Italian Government goes on to state that in this case the Commission has failed thoroughly to investigate whether the prohibition on imports is merely a necessary consequence of the rules enacted by the State in the exercise of its legislative powers in the sphere of product marketing and for that reason is legitimate. The Italian legislature must not only take account of the habits of Italian consumers, as earlier described, but must protect them against the possibility of fraud.

As a result, it may not be said that the provisions at issue constitute a “means of arbitrary discrimination” or a “disguised restriction on trade between Member States” simply because “the trade rules, as so defined, have been found to be apt to create a situation favourable to agricultural producers in the same socioeconomic area from which consumer practices originate”.

Still dwelling on the subject of Article 36 of the EEC Treaty, the Italian Government emphasizes that, contrary to what the Commission says, its observations of 8 November 1979 do not constitute an admission that the provisions of Decree No 162 were inspired by a protectionist motive of any kind.

As regards Article 41, by virtue of which the designation “vinegar” may be used only for products obtained from the acetic fermentation of wine, that provision simply “transposed into law a reality already forming part of proper trade customs meeting the needs created by demand for the product”. It thus did not constitute the creation by way of legal enactment of any trade preference in favour of wine-vinegar, since its aim was simply to regulate the conduct of vinegar producers and traders “so as to ensure that products are introduced and sold in accordance with their identity as known to consumers who, in Italy, when they ask for a bottle of vinegar, expect to receive wine-vinegar”.

Turning next to the prohibitions imposed by Article 51 of Decree No 162, the Italian Government maintains that they have their origin in and draw their justification from the same factors. These prohibitions constitute an indispensable complement for the protection of consumers against “abusive or at any rate harmful forms of marketing vinegar not derived from the acetic fermentation of wine”. The Italian Government further states that freedom of trade is not seriously affected since “consideration and regard for consumer confidence and the rules governing them are not really liable to restrict the volume of trade” because, even before Decree No 162 was adopted, the sale of vinegar not derived from wine was virtually unknown in Italy.

The Italian Government points out that the importation of apple-vinegar which gave rise to Case 788/79 occurred “in a province inhabited by an ethnic minority whose traditions and customs distinguish them from the national situation as a whole”.

Nevertheless, the Italian Government says that it is prepared to reconsider the prohibitions laid down in Article 51 of Decree No 161 “in view of the fact that the legal obstacles to which that provision gives rise in intra-Community trade in vinegar might appear to be out of proportion to the needs to be satisfied”. However, it insists that it is entitled to maintain in force Article 41 of Decree No 162 which restricts the designation “vinegar” to wine-vinegar alone “because, first, it cannot be said to have effects equivalent to a quantitative restriction on imports and, secondly, where such effects do occur they will still be justified by Article 36 of the Treaty”.

The Italian Government then states that whereas it was not possible for Article 36 to apply in Case 120/78 Rewe the situation in this case is different since the Italian provision complained of finds its justification solely in a problem of designation and of how to ensure that the designation is correctly used. As for the Commission's argument that the use of the term “vinegar’ might be accepted in Italy, even for vinegars not derived from wine, provided that, for the purpose of protecting consumers, a requirement is imposed whereby suitable labels indicating the origin of the product are to be used, the Italian Government believes that the Commission “does not escape the charge of seeking to create at Community level, by distorting the real situations which differ from one Member State to another, a commercial terminology for vinegar common to and exactly the same in all the Member States, in other words strictly equivalent in every language, by assigning to a judgment of the Court the thankless task of resisting the social phenomenon which is perhaps the most unyielding to any form of authoritarian imposition: the use of language”.

Such an objective is not part of the traditions of the Community, as was found in a wholly analogous situation, namely that of wine, since under Regulation No 337/79 the designation “wine” may be used in Italy only to refer to the product obtained from the fermentation of grape must.

Therefore proper regard for the protection of the Italian consumer and for the linguistic usages upon which he places reliance “may not be regarded as being an unjustified obstacle to trade in Italy in vinegar not derived from wine”.

In its observations the French Government states that it was led to believe by the statement of the applicant's conclusions published in the Official Journal of the European Communities that the Commission was criticizing the Italian legislation for prohibiting the marketing and importation of vinegar made not only from the fermentation of agricultural products other than wine but also from synthetic acetic acid.

After receiving the documents on the case the French Government, finding that the Commission is permitting Italy to continue lawfully to prohibit the marketing of vinegar made from synthetic acetic acid, considers that, in that case, it can withdraw its intervention since such a view accords with its own.

Nevertheless, “in the converse case, it stands by its view in partial support of the submissions of the Italian Government at the hearing”.

Oral procedure

At the hearing on 17 June 1981 the Commission of the European Communities represented by G. Berardis, acting as Agent, the Italian Republic represented by P. G. Ferri, acting as Agent, and the French Republic represented by A. Carnelutti, acting as Agent, presented oral argument and answered questions put to them by the Court.

Some of the argument at the hearing centred on the determination of the scope of the application for a declaration of a failure to fulfil an obligation under the Treaty in the light of the two reasoned opinions which preceded it.

Various questions from the Members of the Court were concerned with establishing whether or not the application covered vinegar produced from diluted acetic acid or whether it extended only to vinegar derived from agricultural products.

After a brief adjournment the President made a statement on behalf of the Court indicating that if the Court were to decide that the extension of the application to so-called synthetic vinegar were admissible it would give the parties to the proceedings a fresh opportunity to submit any observations which they might have on that point.

The representative of the Commission then stated that, alternatively, the Commission was prepared to restrict the application to vinegar made by fermentation if the Court thought that appropriate. The Court took note of that statement.

The Advocate General delivered his opinion at the sitting on 15 December 1981.