CJEC, December 9, 1981, No 193-80

THE COURT

1 By application lodged at the court registry on 29 september 1980 the commission of the european communities brought an action before the court under article 169 of the eec treaty for a declaration that ' ' by prohibiting the importation and marketing under the designation of ' vinegar ' of vinegar not based on wine ' ' the italian republic had failed to fulfil its obligations under articles 30 and 36 of the eec treaty.

2 Under article 51 of decree no 162 of the president of the italian republic of 12 february 1965( gazzetta ufficiale no 73 of 23 march 1975), amongst other products, those containing acetic acid not originating in the acetic fermentation of wine may not be transported, held for sale, marketed or utilized, directly or indirectly, for human consumption upon penalty of a fine or imprisonment. Under article 41 of the same decree the designation ' ' vinegar ' ' may be used only for the product obtained from the acetic fermentation of wine. Those provisions also apply to products imported from abroad.

3 The commission took the view that those rules contravened the principle of the free movement of goods within the community and sent the government of the italian republic two consecutive reasoned opinions which were issued in the following circumstances.

4 The first opinion was preceded by a letter pursuant to article 169 of the treaty and dated 14 december 1978 in which the commission pointed out to the italian government that the aforementioned rules amounted to a measure having an effect equivalent to quantitative restrictions on imports which was contrary to article 30 of the treaty and did not appear to be justified under article 36 because it was difficult to maintain and in any event it was not proved that vinegar made from alcohol of agricultural origin was more harmful to health than wine-vinegar.

5 In that letter the commission stated that its finding applied ' ' only to vinegar made from alcohol obtained from the acetic fermentation of agricultural products, excluding synthetic acetic acid ' ' which could continue to be excluded from the market in vinegar. It added that, as regards vinegar made from alcohol of agricultural origin, which it ought to be possible to use for direct consumption in the same way as wine-vinegar and in competition with it, it saw no objection to the italian authorities ' adopting the provisions necessary to enable consumers to make their choice on the basis inter alia of appropriate labelling in particular.

6 The commission did not receive any reply within the prescribed period of two months and on 19 november 1979 it sent the italian republic a reasoned opinion on the prohibition of the use of vinegar made from alcohol other than wine. In that opinion it referred to its letter of 14 december 1978 and found that ' ' pursuant to the first paragraph of article 169 of the eec treaty the italian republic, by prohibiting the use of fermented vinegar obtained from a product other than wine and piquette, has failed to fulfil its obligations under the treaty ' '. The reasons which it gave for its opinion were these: ' ' vinegar, other than wine-vinegar, obtained from fermentation, and particularly vinegar made from alcohol, cider or malt, is produced and consumed in large quantities in several member states and such consumption demonstrably represents no danger to health. To prohibit the use for food purposes of fermented vinegar other than wine-vinegar therefore amounts to erecting trade barriers between italy and the other member states ' '.

7 In the meantime, however, the italian government had submitted its observations by letter of 8 november 1979 in which, while maintaining its view that as a whole its national laws were compatible with community law, it concentrated on the respective designations ' ' vinegar ' ' and ' ' wine-vinegar ' '.

8 In view of those observations on 28 july 1980 the commission sent the italian government a second reasoned opinion ' ' on the prohibition of the use of the designation ' vinegar ' for any product other than that obtained from the acetic fermentation of wine ' '. It indicated therein that it was continuing the procedure which it had initiated and after twice referring to the letter of 14 december 1978 it found that, by prohibiting the use of the designation ' ' vinegar ' ' in respect of any product other than that obtained from the acetic fermentation of wine, the italian republic had failed to fulfil its obligations under the treaty. In the same opinion the commission referred to the judgment which had been given in the meantime on 26 june 1980 in case 788-79 gilli and andres( 1980) ecr 2071 concerning the importation into italy of apple-vinegar.

9 It appears from the wording of the reasoned opinion of 28 july 1980 that the commission expressly intended it to complement the first and that, taken together, the two opinions apply both to the prohibition of describing as vinegar any product other than that obtained from the acetic fermentation of wine and the prohibition of marketing or importing fermented vinegar obtained from a product other than wine. The object of the two reasoned opinions is set out in the conclusions of the originating application which asks the court to ' ' declare that the italian republic by prohibiting the importation and marketing, under the designation ' vinegar ', of vinegar not based on wine, has failed to fulfil its obligations under article 30 et seq. Of the eec treaty ' '.

10 Following the publication of an extract from the application in the official journal of the communities, which might have given the impression that the application extended to the marketing of synthetic vinegar, the french government sought leave to intervene. It argued that in its view italy could lawfully continue to prohibit the marketing of synthetic acetic acid and, should the commission intend to include the marketing of synthetic vinegar in its application, the french government would to that extent intervene in support of the conclusions of the italian government.

11 In reply to a question raised in the course of the oral procedure the agent for the commission indicated that the commission ' s conclusions were general in nature and covered the importation and marketing of all types of vinegar but for the purposes of this action the commission might agree to restrict the subject-matter of the application to vinegar of agricultural origin, thus excluding synthetic vinegar.

12 Having regard to that background the court considers that the description and marketing of synthetic vinegar is not at issue in this case. The commission had clearly excluded that type of vinegar in its formal letter of 14 december 1978, which was expressly mentioned in the first as well as in the second reasoned opinion, and had only examined the question of the designation and importation of various types of vinegar derived from agricultural products. It therefore appears that the uncertainty pointed out by the french government is the result of the ambiguous wording of the application which does not reflect the limited scope of the formal letter and the two reasoned opinions. In those circumstances the commission cannot be permitted to widen the scope of this action to include an issue which was expressly excluded from the very beginning of the procedure instituted under article 169 and which was not considered by the parties, either before or during the written procedure before the court.

13 It must therefore be held that this dispute concerns only the importation, marketing and designation in italy of vinegar derived from agricultural products, to the exclusion of synthetic vinegar.

14 According to the commission ' s originating application, as just defined as to its subject-matter, the italian rules give rise to two distinct infringements of article 30 of the treaty in so far as they prohibit, first, the importation and marketing of vinegars of agricultural origin other than those deriving from the fermentation of wine and, secondly, the use of the designation ' ' vinegar ' ' for vinegars of agricultural origin other than wine-vinegar.

( a) The prohibition of the importation and marketing of vinegars of agricultural origin other than wine-vinegar

15 The italian government denies that the maintenance of this prohibition constitutes a failure to fulfil the obligation to ensure freedom of movement of goods. It pleads, first, the lack of harmonization of the laws of the member states on ' ' vinegar ' ', then the grounds of absence of discrimination, public health, and the campaign against frauds.

16 The italian government points out in the first place that in its resolutions of 28 may 1969( journal officiel no c 67, p. 1) and 17 december 1972( official journal c 117, p. 1) the council considered ' ' vinegar ' ' among the food-products on which the commission had to submit harmonization proposals which could be adopted by the council no later than 1 july 1970, later extended by the second resolution to 1 january 1977. In so far as that programme remains in being the commission ought at least to have made an attempt at harmonization by submitting a proposal under article 100 before resorting to articles 30 to 36 of the treaty.

17 That argument must be rejected. The fundamental principle of a unified market and its corollary, the free movement of goods, may not under any circumstances be made subject to the condition that there should first be an approximation of national laws for if that condition had to be fulfilled the principle would be reduced to a mere cipher. Moreover, it is apparent that the purposes of articles 30 and 100 are different. The purpose of article 30 is, save for certain specific exceptions, to abolish in the immediate future all quantitative restrictions on the imports of goods and all measures having an equivalent effect, whereas the general purpose of article 100 is, by approximating the laws, regulations and administrative provisions of the member states, to enable obstacles of whatever kind arising from disparities between them to be reduced. The elimination of quantitative restrictions and measures having an equivalent effect, which is unreservedly affirmed in article 3( a) of the treaty and carried into effect by article 30, may not therefore be made dependent on measures which, although capable of promoting the free movement of goods, cannot be considered to be a necessary condition for the application of that fundamental principle.

18 It follows that the fact that there are no common rules or harmonization directives on the production and marketing of specific goods is not sufficient to remove those goods from the scope of the prohibition enacted in article 30 of the treaty. The prohibition of measures having an effect equivalent to quantitative restrictions covers all trading rules of the member states which are capable, directly or indirectly, actually or potentially, of impeding intra-community trade.

19 The italian government contends in the second place that the rules in question are not discriminatory because they apply to national and imported products alike. In addition it criticizes the commission for not thoroughly investigating the question whether the prohibition of imports is not a necessary and legitimate consequence of rules enacted by the state in the exercise of its legislative powers as regards the marketing of products.

20 The answer to that argument must be that, first, even if the system established by the italian legislation applies to national and imported products alike, its effects are still protective in nature. It has been drafted in such a way that it allows only wine-vinegar to enter italy, closing the frontier to all other categories of vinegar of agricultural origin. It therefore favours a typically national product and to the same extent puts various categories of natural vinegars produced in the other member states at a disadvantage.

21 Secondly, whereas it is true, as is confirmed by a consistent line of decisions of the court( judgment of 20 april 1979 in case 120-78 rewe( 1979) ecr 649), that in the absence of common rules relating to the marketing of a product it is for the member states to regulate on their own territory all matters relating to the marketing of that product and that obstacles to movement within the community resulting therefrom must be accepted, the fact remains that those requirements must still be acknowledged to be necessary in order to satisfy mandatory requirements such as the protection of public health, referred to in article 36, consumer protection or fair trading, which does not appear to be the case here.

22 The argument based on the protection of public health used by the italian government as justification for its national legislation is not acceptable because it has no justification in the case of vinegars of agricultural origin which it is not denied contain no harmful substances and are normally consumed in other member states and which must therefore be regarded as harmless to health, as the court moreover held in the specific case of apple-vinegar in the gilli judgment cited above.

23 As far as fair trading and consumer protection are concerned, those needs, as is observed below with regard to the question of designations, may be fulfilled by means less restrictive to free movement than a prohibition of the marketing of all kinds of natural vinegars other than wine-vinegar.

( b) The restriction of the designation ' ' vinegar ' ' to wine-vinegar

24 The commission contends that the second way in which the italian rules infringe the eec treaty is that the designation ' ' vinegar ' ' is restricted to wine-vinegar. It points out that in the eyes of italian consumers that requirement lowers the value of natural vinegars produced from the fermentation of substances other than wine which may be offered to prospective buyers only under a brand name which lowers their value and as a result makes them ' ' virtually unsaleable ' '. The measure is therefore likely directly or indirectly to impede intra-community trade.

25 As justification for its rules on this matter the italian government claims that it is necessary to protect consumers who in italy ' ' by time-honoured tradition ' ' treat all ' ' vinegars ' ' as wine-vinegar owing to the semantic value of the word ' ' aceto ' '( vinegar). Consumers thus run the risk of being misled as to the essential nature of the raw material used and of the end-product.

26 That argument cannot be accepted. It may be seen from the relevant community provisions and in particular from heading 22.10 of the common customs tariff, which is also used in annex ii to the treaty for which article 38 of the treaty makes provision, that the term vinegar does not cover wine-vinegar alone which, moreover, is the subject of a specific subheading. It follows that vinegar is a generic term and it would not be compatible with the objectives of the common market and in particular with the fundamental principle of the free movement of goods for national legislation to be able to restrict a generic term to one national variety alone to the detriment of other varieties produced, in particular, in other member states.

27 However, it is not to be ruled out that following the implementation of the rules at issue italian consumers have become accustomed to the term ' ' aceto ' ' being used in commerce for wine-vinegar alone. If that is the case then the concern of the italian government to protect consumers may be justified. Such protection may however be provided by other means enabling national and imported products to be treated alike, in particular by the compulsory affixing of suitable labels giving the nature of the product sold and containing a description or additional information specifying the type of vinegar offered for sale, provided that such a requirement applies to all vinegars including wine-vinegar. Such a course would enable the consumer to make his choice in full knowledge of the facts and would guarantee transparency in trading and in offers to the public by providing an indication of the raw material used to make the vinegar.

28 It must therefore be concluded that by prohibiting the marketing and importation of vinegars of agricultural origin other than those originating in the acetic fermentation of wine and by restricting the designation ' ' vinegar ' ' to wine-vinegar, the italian republic has failed to fulfil its obligations under article 30 et seq. Of the eec treaty.

29 Under article 69( 2) of the rules of procedure the unsuccessful party is to be ordered to pay the costs. Since the defendant has failed in its submissions it must be ordered to pay the costs. The french government, which made no submissions on costs, must bear its own costs.

On those grounds,

The court

Hereby:

1. Declares that, by prohibiting the marketing and importation of vinegars of agricultural origin other than those originating in the acetic fermentation of wine and by restricting the designation ' ' vinegar ' ' to wine-vinegar, the italian republic has failed to fulfil its obligations under article 30 et seq. Of the eec treaty;

2. Orders the defendant to pay the costs;

3. Orders the french government to bear its own costs.