JUDGMENT OF 30. 11. 1978 — CASE 88/78 HAUPTZOLLAMT HAMBURG-JONAS v KENDERMANN
In Case 88/78 REFERENCE to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof for a preliminary ruling in the proceedings pending before that court between
THE COURT (Second Chamber), composed of: Lord Mackenzie Stuart, President, M. Sørensen and A. Touffait, Judges, Advocate General: G. Reischl Acting Registrar: M. Petersen
gives the following
JUDGMENT
Facts and Issues
The facts of the case, the course of the procedure and the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:
I — Facts and procedure
1. Article 1 of Regulation 2448/75 of the Commission of 25 September 1975 suspending the monetary compensatory amounts for certain wines (Official Journal L 250 of 26 September 1975, p. 29) suspended the monetary compensatory amounts in respect of wines as established by Regulation 2021/75 of the Commission of 31 July 1975 fixing the monetary compensatory amounts and certain rates for their application (Official Journal L 205 of 4 August 1975, p. 1), save in Germany in respect of ‘table wines of types A II and A III within the meaning of Regulation (EEC) 945/70 …’. Regulation 2448/75 entered into force on 26 September 1975. Article 2 of Regulation 945/70 of the Council of 26 May 1970 determining the types of table wines (Official Journal, English Special Edition 1970 (I), p. 267) provides for three types of white table wine, namely:
‘(a) white table wine, other than that referred to under (b) and (c), with an actual alcoholic strength of not less than 10o and not more than 12o, which shall be known as “Type A I”;
b) white, table wine from vine varieties of the Sylvaner or Müller-Thurgau type, which shall be known as “Type A II”;
c) white table wine from vine varieties of the Riesling type, which shall be known as “Type A III”.’
2. Between 3 and 15 October 1975 the plaintiff and respondent to the appeal in the main action, Firma Hermann Kendermann, exported wine from Germany to Canada. The wines were blends of Sylvaner and Müller-Thurgau with 30 % French white wine of the vine variety Chenin, with 0.1 to 0.2 % Italian white wine of the vine variety Trebbiano or with 1.3 % of the Chenin variety. The plaintiff in the main action applied for monetary compensatory amounts in respect of those exports on the basis of Regulation 2021/75. The Hauptzollamt Hamburg-Jonas, defendant and appellant in the main action, in reliance on Regulation 2448/75, rejected this.
3. After unsuccessful objections the plaintiff in the main action brought proceedings in the Finanzgericht Hamburg. It alleged in particular that the exported wines had the typical flavour of the German wine of the Sylvaner and Müller-Thurgau vine varieties. As regards the exports which contained 30 % French wine the plaintiff took care to ensure that the French wine flavour was neutral. The Lehr- und Versuchsanstalt Weinbau in Bad Kreuznach classified the wines under Type A II. In its view it follows that the monetary compensatory amount is payable in respect of the whole quantity exported or at least in respect of the German wine. If this interpretation of Regulation 2448/75 were not adopted then in the view of the plaintiff in the main action doubts arise as to the validity of the regulation. The Finanzgericht Hamburg ordered the Hauptzollamt to pay to the plaintiff in the main action the monetary compensatory amounts claimed, relying in particular on General Rule 3 (b) of the Common Customs Tariff which provides that ‘mixtures … shall be classified as if they consisted of the material … which gives them their essential character …’. In the view of the Finanzgericht that provision applies by reason of Article 12 (1) of Regulation 816/70 of the Council of 28 April 1970 laying down additional provisions for the common organization of the market in wine (Official Journal, English Special Edition 1970 (I), p. 234) which provides: The Finanzgericht took the view that in the present case it was clear that the wines of the vine varieties Sylvaner and Müller-Thurgau determined the character of the blends.
‘The general rules for the interpretation of the Common Customs Tariff and the special rules for its application shall apply to the tariff classification of products covered by this regulation;…’
4. The Hauptzollamt appealed on a point of law to the Bundesfinanzhof. By order dated 28 February 1978 the Bundesfinanzhof stayed the proceedings and referred the following questions to the Court for a preliminary ruling under Article 177 of the EEC Treaty: 1. Do wines being a blend of table wines of ‘Type A I’ and ‘Type A II’, the latter being the component part giving them their essential character, belong to ‘Type A II’ within the meaning of Article 2 (b) of Regulation (EEC) 945/70 of the Council of 26 May 1970? 2. Does the blended wine mentioned in Question 1 then belong in any case to‘Type A II’ within the meaning of Article 2 (b) of Regulation (EEC) 945/70 if the proportion of wine of ‘Type A I’ in it is negligible? If the answer to this question is in the affirmative, what are the conditions under which the proportion of ‘Type A I’ in it may be regarded as negligible? 3. If Question 1 is answered in the negative, is the blended wine mentioned in Question 1, taken as an entity, to be treated as wine of ‘Type A I’ within the meaning of Article 2 (a) of Regulation (EEC) 945/70 or may it, in so far as it contains ‘Type A II’ wine, at least be treated as table wine of A II type within the meaning of Annex I. Part 6, to Regulation (EEC) 2021/75 of the Commission of 31 July 1975 and within the meaning of Article 1 of Regulation (EEC) 2448/75 of the Commission of 25 September 1975, in respect of which (proportionate) monetary compensatory amounts may be granted on its being exported from Germany? 4. Is Regulation (EEC) 2448/75 valid if it has to be interpreted as meaning that monetary compensatory amounts shall not be paid when blends of the type specified in Questions 1 and 2 are exported and they shall not be paid either in respect of that proportion of such blends which falls within ‘Type A II’?
5. It appears from the order requesting a preliminary ruling that the Hauptzollamt's main contention before the Bundesgerichtshof was that the Finanzgericht was wrong to apply General Rule 3 (b) of the Common Customs Tariff to the classification of types of table wines within the meaning of the said provisions. The reference in Article 12 (1) of Regulation 816/70 to the general rules for the interpretation of the Common Customs Tariff, according to the express terms thereof, applies only to tariff classification. If a Community measure refers to characteristics other than those specified in the tariff nomenclature then the terms in which those other characteristics are set out are alone decisive. The Hauptzollamt contends that the relevant regulation for classifying the exported wines is Regulation 945/70. It considers that the meaning of Article 2 (b) of that regulation is that only white table wines from the vine varieties of the Sylvaner or Müller-Thurgau type are to be known as ‘Type A II’. Only those types of vine varieties have the distinguishing features which, as the author of the regulation intended, characterize ‘Type A II’, a type of table wine representative of Community production which justifies a special guide price. Further, according to the Hauptzollamt, under Article 2 (b) and (c) of Regulation 945/70 the definitions of ‘Type A II’ and ‘Type A III’ consist of precise botanical characteristics. Other white table wine with an alcoholic strength of not less than 10o and not more than 12o, which does not fall within ‘Type A II’ and ‘Type A III’ is, according to Article 2 (a) of Regulation 945/70, to be known as ‘Type A I’. A blended wine which is made up of a more or less large proportion of ‘Type A I’ table wine in addition to ‘Type A II’ table wine can no longer be classified wholly under ‘Type A II’. The protection which high guide prices were designed to give to ‘Type AII’ table wines would be whittled down if an unlimited amount of ‘Type A I’ wine of neutral taste could be added to ‘Type A II’ table wine, without that blend ceasing to be known as ‘Type A II’. From the standpoint of the monetary compensatory amount to be granted, the classification of the blended wine in ‘Type A II’ would lead to distortions. If, in the case of blended wines, monetary compensation in respect of ‘Type A II’ wine were also to be paid in respect of the proportions of table wine of ‘Type A I’, although such proportions when imported were subject to a lower compensatory amount or were imported without monetary compensation being levied (which could have been the case at the date of the exports made by the plaintiff in the main action) that would contravene the whole purpose of the system of monetary compensation.
6. The order making the reference was entered in the Court Register on 30 March 1978. The plaintiff in the main action and the Commission of the European Communities submitted written observations in accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities. After hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. By order dated 12 July 1978 the Court referred the present case to the Second Chamber under Article 95 (1) of the Rules of Procedure.
II — Written observations submitted to the Court
1. Observations of the plaintiff in the main action
a) In the view of the plaintiff in the main action the first question referred to the Court for a preliminary ruling should be answered in the affirmative. The fact that in Article 3 of Regulation 945/70 there is provision for the adoption of lists of vine varieties in itself indicates the answer to this question: if white table wines produced 100 % from Miiller-Thurgau or Sylvaner vine varieties were alone included, there would be no need for any special list. In the view of the plaintiff in the main action it is necessary to establish, in accordance with the general principles of interpretation and having regard to the structure and objective of Regulation 945/70, what conditions must be fulfilled for a wine to be classified under Type AII within the meaning of that regulation. The objective of that regulation is to determine the types of table wines and for this it is not the precise botanical definition of the particular vine varieties which is decisive but the establishment of groups with a certain uniform character. This is apparent in article 2 (a) as regards ‘Type A I’: the criterion is not the vine variety but the alcoholic strength. It is the same as regards the following groups. Regulation 945/70 does not require that a given wine to be classified as ‘Type A II’ or ‘Type A III’ should be produced exclusively from a particular vine variety but rather the type of wine should be particularized. As regards types of red table wine this is even clearer: the only vine variety determining a type in Article 1 of the said regulation is the Portugieser, and otherwise there is reference only to the alcoholic strength. In the view of the plaintiff in the main action in the case of blends of the said vine varieties the decisive type of the wine is determined by application of the general rules for the interpretation of the nomenclature of the Common Customs Tariff. In its view the Common Customs Tariff applies to the present question. Article 12 (1) of Regulation 816/70 expressly so provides and refers to the said general rules for interpretation; this is particularly clear in the present case because of the close internal connexion between customs law, in the narrow sense, on the one hand and the law concerning refunds, including monetary compensatory amounts, on the other. Such a comprehensive reference is provided for and is general in organizations of the market in other products, for example, as regards cereals, in Article 18 (1) of Regulation 2727/75 of the Council of 29 October 1975 on the common organization of the market in cereals (Official Journal L 281 of 1 November 1975, p. 1). That reference is particularly pertinent to the present question since it refers to Regulation 2729/75 of the Council of 29 October 1975 on the import levies on mixtures of cereals, rice and broken rice (Official Journal L 281 of 1 November 1975, p. 18) which in its preamble states the principle that the Common Customs Tariff applies to levies and refunds in respect of agricultural products subject to an organization of the market: If the first question were answered in the negative then Type A I would serve largely as a catchment clause for blended wines. In the view of the plaintiff in the main action the Finanzgericht Hamburg rightly and convincingly rejected this: the classification of types of table wines must be regarded in the light of its objectives; the aim of the classification is to make it possible to determine the guide prices for each representative variety of table wine in Community production. Since the guide prices are determined on the basis of prices at the producer at the producer stage (thus obviously before any coupage) on the markets of the wine-growing areas of the Community, on which a significant part of the table wine production of the particular areas under consideration is marketed, and since, further, the guide prices for table wines of Types A II and A III are on average more than double those for wines of Types A I, it is quite out of the question that blends of table wines of Type A I with Types A II or A III should come unter Type A I. The plaintiff in the main action then stresses that since in its view the first question must be answered in the affirmative, it is making observations on the following questions only as a precaution and in the alternative.
‘… the import levy on such mixtures results from their tariff classification, which is normally determined in accordance with the general rules for the interpretation of the Common Customs Tariff.’
b) As regards the second question referred to the Court for a preliminary ruling the plaintiff in the main action again stresses that the important factor in Regulation 945/70 is the type of wine. If a very small addition of wine of Type A I were capable of causing the whole wine to be classified as Type A I, this would mean a departure from the basic purport and structure of the regulation. If, however, the quantity of wine not coming under Type AII were to be taken as a criterion, then it ought not to be too strict. At least according to this view the addition of other wine varieties is harmless, in so far as there is still justification for describing the wine as a whole as being of the vine variety of the main component of the blend. Thus according to Article 8 of the German wine regulation of 15 July 1971 (Bürgerliches Gesetzblatt I p. 926) the appellation of the main vine variety may be used providing the addition of other vine varieties does not exceed 25 %. A lhigher percentage of wines of other vine varieties may be added if the added wine is of neutral taste. In effect, in proportions of 70 to 30 the predominant variety clearly dominates. In the view of the plaintiff in the main proceedings it may accordingly be assumed for the purpose of the second question that up to some 30 % may be added.
c) As regards the third question referred to the Court for a preliminary ruling the plaintiff in the main action points out that Regulation 2448/75 makes it clear that the suspension of the monetary compensatory amount does not concern inter alia table wines of Type A II within the meaning of Regulation 945/70. It necessarily follows from this that it would be wrong to adopt an interpretation according to which in the case of coupage no monetary compensatory amount at all would be granted. The view that no monetary compensatory amount at all and without exception is payable in respect of blends also conflicts with the general provisions of the law relating to refunds. Article 6 of Regulation 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts (Official Journal L 139 of 30 May 1975, p. 37) refers, in respect of the application of monetary compensatory amounts in trade with third countries, to Regulation 192/75 of the Commission of 17 January 1975 laying down detailed rules for the application of export refunds on agricultural products (Official Journal L 25 of 31 January 1975, p. 1). Referring to the third subparagraph of Article 8 (1) of that regulation the plaintiff in the main action states that it is clear according to Community law that refunds and monetary compensatory amounts are payable in respect of components even where they have been combined with other products. It states further that the objective of the export refund and the monetary compensator. amount is to encourage the exportation of agricultural products from the Community to third countries. It makes no difference in this respect whether such products are exported from the Community in an unaltered state and then mixed or mixed within the Community and then exported.
d) As regards the fourth question referred to the Court for a preliminary ruling the plaintiff in the main action observes that if Regulation 2448/75 has to be interpreted according to the premise of Question 4, then it does not contain a sufficient statement of reasons to comply with Article 190 of the Treaty. In its view the regulation also conflicts with the principle of equality of treatment. To suspend the monetary compensator amount on table wines which do not come entirely within the special categories of Article 1 of Regulation 2448/75 is objectively unjustified, in any event if this means that wines whose character is determined by wines of Type A II which attract compensation are excluded from it. The objective of the compensatory system, which is to support and thus guarantee exports of wine in spite of currency fluctuations, applies, in the view of the plaintiff in the main action, to that wine in the same way as to the varieties excepted from the suspension. The external circumstances have not changed to such an extent that a partial suspension would be justified in respect of wines which, if they were exported separately, would undoubtedly attract monetary compensatory amounts. The plaintiff in the main action refers, but only as a very minor issue, to a further defect in Regulation 2448/75: it was adopted on 25 September and published on 26 September 1975 in the Official Journal but had as its date for taking effect 29 September 1975. The plaintiff in the main action had already entered into the relevant contracts before such date, that is at a time when there was not yet any question of suspending the monetary compensatory amount. Legally this means that having regard to the principle of the protection of legitimate expectations the suspension could not apply to quantities which had been contracted for before the regulation was adopted. In this connexion the plaintiff in the main action refers to the judgment of the Court of 18 March 1975 in Case 78/74 DEUKA, Deutsche Kraftfutter GmbH v Einfuhr- und Vorratsstelle für Getreide und Futtermittel, [1975] ECR 421.
2. Observations of the Commission
a) As regards the first two questions referred to the Court for a preliminary ruling the Commission observes that to determine whether a particular wine is a table wine of Type A II within the meaning of Article 2 (b) of Regulation 945/75 does not require reference to the general rules for the interpretation of the nomenclature of the Common Customs Tariff. In its view it should be borne in mind that the nomenclature of Regulation 2448/75 expressly adopted the meaning peculiar to Regulation 945/70 of the concept of table wine of Type A II, in the sense in which it is used in the legislation concerning wine, adapted to the objectives and requirements of the common organization of the market in wine. In the Commission's view there is nothing in Regulation 945/70 to limit the definition ‘white table wine from vine varieties of the Sylvaner or Müller-Thurgau type’ to such wines. Regulation 816/70 each time expressly indicated when a wine must be produced exclusively from a particular vine variety in order to satisfy a particular definition, as for example in Article 30 (2). The wording in question here in Regulation 945/70 contains no such limitation. The Commission further observes that the basis for the distinction made in Regulation 945/70 between the various varieties of table wines lies in the characteristics of price-formation in the various markets of the Community. In view of these objectives it is not necessary to distinguish precisely between the types of wines and vine varieties according to strict organoleptic characteristics. Rather is it a question of which wines of which vine varieties can be marketed and sold as being wines of the same type. Type A II is accordingly not limited to wines of any single vine variety. Regulation 945/70 lists under that type two vine varieties which are. closely related in terms of price-formation, namely Sylvaner and Müller-Thurgau. Further, the Commission considers that the obligation laid down in Article 3 of that regulation to draw up lists of vine varieties, the wines from which by reason of their low acidity approximate to the type of wines of the Sylvaner and Müller-Thurgau varieties, shows that those varieties are to be understood as distinctive varieties. The more particular determination of which wines should be classified with Sylvaner and Müller-Thurgau is accordingly still a matter for the Member States. As regards the territory of the Federal Republic of Germany the Commission refers to the communication from the Stabilisierungsfond für Wein (Stabilization Fund for Wine) of 16 February 1972 (BAnz. No 38 of 24 February 1972, p. 1), which for the purposes of intervention defines Type A III as ‘German table wine of the white Riesling, Rulander, white Burgunder and Auxerrois vine varieties’ and states: In the light of this, which relates mainly to problems of markets and prices, the question in the Commission's view is whether blends of table wines of the said vine varieties of Type A II with other wines are marketable as table wines of the said vine varieties and may be sold as Sylvaner or Müller-Thurgau. Article 26 of Regulation 816/70, subject to certain conditions, treats as ‘table wines’ within the meaning of the common organization of the market in wine such wines ‘resulting from the coupage between table wines’. A permissible blend of wines of the Sylvaner and Müller-Thurgau vine varieties might, in the view of the Commission, subject to certain conditions be described as wine from those vine varieties and so marketed. Regulation 2133/74 of the Councul of 8 August 1974 laying down general rules for the description and presentation of wines and grape musts (Official Journal L 227 of 17 August 1974, p. 1) allows the indication of the name of a vine variety, ‘if the product concerned is obtained at least 85 % from grapes of the variety specified and if this variety determines the nature of the product in question.’ Since that regulation governing description applied only as from 1 September 1976, then in the view of the Commission in the present circumstances the permissible description as wine from a particular vine variety must still be determined according to national law, which is here German law, and accordingly the aforesaid German wine regulation. As regards domestic wine the latter allows the indication of a vine variety "if it is produced in a proportion of at least 75 % from grapes of the given vine variety and if that proportion originates exclusively from the stated geographical locality and the stated year and if that vine variety determines its essential character (Article 8 (1)). Such indication is also lawful if German wine is blended in Germany with other than domestic wine (Article 10 (2)). Regarding the question whether the blend in issue here was subject as ‘table wine of Type A II within the meaning of Regulation 945/70’ to the monetary compensatory amount laid down by a Regulation 2021/75, it is apparent in the view of the Commission from the above considerations that it depends on whether it is possible to market that wine as table wine of Type AII, that is whether it is possible to describe it as such and whether it was so described. From the particulars at the Commission's disposal it cannot judge whether the blend produced by the plaintiff is ‘table wine’ at all within the meaning of Article 26 of Regulation 816/70. The blends exported by the plaintiff with a content of more than 25 % foreign wine should in no circumstances have been marketed as table wines of Type A II. Those table wines in which the addition of foreign wine was less than the 25 % maximum could on the other hand have been regarded as of Type A II, but only in so far, and subject to all the other provisions, as they were marketed under the appellation Sylvaner or Müller-Thurgau. It is not for the Commission to judge the extent to which the present case in fact complies with those conditions. It is for the competent German court to make the necessary findings.
‘All other white German table wines come under Type A II.’
b) As regards the third question referred to the Court for a preliminary ruling the Commission observes that according to the relevant wording of Regulation 2448/75 the exported wine must come as such under Type A II in order to give entitlement to the monetary compensatory amount. In its view there is no claim to a proportionate payment on the basis of the provisions of Article 6 of Regulation 1380/75 in conjunction with Article 8 of Regulation 192/75; although under Article 6 of Regulation 1380/75 the provisions concerning the granting of export refunds apply to monetary compensatory amounts, nevertheless under Article 8 of Regulation 192/75 the refund in respect of an individual component of an exported product is payable only if a refund has been fixed on the basis of a component or components of that product. Those conditions, however, are not fulfilled here since no compensatory amount is provided for table wine of Type A II which is exported as a component of any mixture, that is of a product with its own, different character.
c) Regarding the final question referred to the Court for a preliminary ruling the Commission observes that the conditions for the application of monetary compensatory amounts on the import and export of a wine to and from Germany existed at the time. In this respect it refers to the judgment of the Court of 25 May 1978 in Case 136/77 Firma A. Racke v Hauptzollamt Mainz [1978] ECR 1245. In adopting Regulation 2448/75 the Commission states that it was guided by the fact that although the market trend at the time allowed the German market to be opened up, by suspending the monetary compensatory amount, to foreign table wines which, as a result of their special qualities, were sufficiently distinguishable from the typical domestic wines of Types A II and A III, it was necessary to maintain the protection against foreign wines which directly corresponded to and were in competition with them. Blends of the kind exported by the plaintiff, containing a large proportion of foreign wine, did not come within that category since they were not marketable as wines of Type A II. In view of this fact there can be no question of discrimination. In the Commission's view the plaintiff cannot rely on the protection of legitimate expectation; it had entered into the export contracts as early as 1974 but did not perform them until late in 1975. The Community in no way gave the plaintiff cause to expect any such long-term continuous subsidizing of its transactions.
III — Oral procedure
At the hearing on 28 September 1978 the plaintiff in the main action, represented by Werner Kleinmann, Rechtsanwalt, and the Commission, represented by its Legal Adviser, Peter Kalbe, presented oral observations.
The Advocate General delivered his opinion at the hearing on 9 November 1978.
Decision
1. By order dated 28 February 1978, received at the Court on 30 March 1978, the Bundesfinanzhof referred four questions to the Court for a preliminary ruling under Article 177 ot the EEC Treaty concerning the interpretation of certain provisions of Community law in relation to the common organization of the market in wine and the system of monetary compensatory amounts in respect to wine.
2. Those questions have arisen in the context of a case between a German undertaking and the German customs administration which refused to grant the undertaking the monetary compensatory amounts claimed by it in connexion with the export to a third country between 3 and 15 October 1975 of certain quantities of blends of white table wine. The wines in question were blends of wines of ‘Type A II’ within the meaning of Article 2 of Regulation 945/70 of the Council of 26 May 1970 determining the types of table wines (Official Journal, English Special Edition 1970 (I), p. 267) with wines of ‘Type A I’ within the meaning of that provision. At the time of the exports in question application of monetary compensatory amounts to table wines of Type A I but not, however, in Germany to table wines of Type A II within the meaning of Regulation 945/70, had been suspended by Regulation 2448/75 of the Commission of 25 September 1975 suspending the monetary compensatory amounts for certain wines (Official Journal L 250 of 26 September 1975, p. 29).
Questions 1 and 2
3. The first two questions of the Bundesfinanzhof are concerned essentially with whether wine produced from a blend of table wines of Types A II and A I is to be treated as being of Type A II if the component which gives the wine its essential character is of Type A II or at least where the content of wine of Type A I is very limited. The plaintiff in the main action and respondent to the appeal takes the view, as did the German court of first instance, that in answering these questions it is relevant to refer to the general rules for the interpretation of the nomenclature of the Common Customs Tariff, to which Article 12 of Regulation 816/70 of the Council of 28 April 1970 laying down additional provisions for the common organization of the market in wine (Official Journal, English Special Edition 1970 (I), p. 234) refers.
4. However, the definition of types of wines contained in Article 2 of Regulation 945/70 is to be viewed in the context of the Community rules not for the purposes of tariff classification but for those of the price system created by those rules. Regulation 945/70 was adopted in particular to implement Article 2 of Regulation 816/70 which provided that a guide price should be fixed annually for each type of table wine representative of Community production. The distinction between various types of table wines made in Regulation 945/70 is accordingly based on the characteristics of price-formation on the various markets of the Community.
5. Type A II is restricted neither to wines of a single vine variety nor to wines of the two expressly mentioned vine varieties, namely Sylvaner and Müller-Thurgau, but may include other vine varieties from which wines similar to those varieties are obtained. From the point of view of price-formation it is moreover in accordance with market conditions within certain limits to allow wine of Type A II not to be produced exclusively from a single vine variety.
6. Since Community law did not prescribe the permitted extent of coupage at the time of the facts in question it was for the Member States to adopt the appropriate provisions. Accordingly the provisions of Article 8 and 10 of the German wine regulation of 15 July 1971 which allow a coupage of up to 25 % can be taken into account.
7. It is therefore appropriate to answer that for the purposes of the payment of monetary compensatory amounts under Regulation 2448/75 of the Commission, Article 2 of Regulation 945/70 of the Council must be interpreted as meaning that at the time of the facts in question wines originating from the coupage of table wines of Types A II and A I belonged to Type A II to the extent to which the coupage was authorized by national provisions.
Question 3
8. The third question asks in essentials whether, if the blend cannot, as an entity, be regarded as falling under type A II, it can in so far as it contains wine of Type A II nevertheless be treated as wine of that type for which a proportionate part of the monetary compensatory amount is payable. The plaintiff in the main action takes the view that this question should be answered in the affirmative and in this respect relies on Article 6 of Regulation 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts (Official Journal L 139 of 30 May 1975, p. 37) and Article 8 of Regulation 192/75 of the Commission of 17 January 1975 laying down detailed rules for the application of export refunds in respect of agricultural products (Official Journal L 25 of 31 January 1975, p. 1). According to the first aforementioned provision in trade with third countries the rules concerning the granting of export refunds apply to monetary compensatory amounts, while the second provision deals with the case of compound products for which a refund is to be fixed on the basis of a component or components.
9. In this respect it suffices to observe that this is not the case here, for no monetary compensatory amount has been fixed either for the exported blended wine as a compound product or for table wine of Type A II exported as a component of such a product.
10. The third question must accordingly be answered to the effect that the combined provisions of Article 6 of Regulation 1380/75 of the Commission and Article 8 of Regulation 192/75 of the Commission must be interpreted as meaning that a blended wine which does not fulfil the conditions for being treated, as an entity, as table wine of Type A II cannot benefit, on exportation to a non-member country, from monetary compensatory amounts proportionate to the quantity of wine of Type A II which it contains.
Question 4
11. The fourth question asks whether Regulation 2448/75 of the Commission is valid even if from its provisions in conjunction with the other relevant provisions it appears that on the export of the blended wine in question no monetary compensatory amount is to be paid. This question has become devoid of purpose since from the answers given to the first two questions it is apparent that monetary compensatory amounts may be paid in respect of blends of wine.
12. There is, however, no ground for questioning the validity of Regulation 2448/75 in so far as the payment of monetary compensatory amounts is not provided for because the coupage exceeds the limits laid down by national provisions. The Court has already decided in its judgment of 25 May 1978 in Case 136/77 Racke v Hauptzollamt Mainz ([1978] ECR 1245) that the Commission did not exceed the bounds of its discretion when it took the view that it was justified in retaining the monetary compensatory amounts on imports and exports of wine to and from Germany in view of the situation existing on the wine market at the time in question. More particularly, as it explained during the course of the procedure, in adopting Regulation 2448/75, the provisions of which were necessarily to apply equally to imports and exports, the Commission was guided by the fact that although the market trend allowed it at the time to suspend the monetary compensatory amount and thus open up the German market to foreign table wines which, because of their special qualities, were sufficiently distinguishable from the typical domestic wines of Types A II and A III, it was necessary to maintain the protection against foreign wines which directly corresponded to and were in competition with them. Since the resulting different treatment of wines which were not marketable as wines of Type A II was objectively justified, it cannot be said that the regulation has any discriminatory effect.
13. Nor can the validity of the regulation be challenged by the plaintiff in the main action in reliance on the principle of the protection of legitimate expectation since frequent changes in monetary compensatory amounts in accordance with the state of the market at the time is a characteristic feature of the system.
14. The answer must accordingly be given that consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Regulation 2448/75 of the Commission.
Costs
15. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds THE COURT (Second Chamber) in answer to the questions referred to it by the Bundesfinanzhof by order of 28 February 1978, hereby rules:
1 For the purposes of the payment of monetary compensatory amounts under Regulation 2448/75 of the Commission, Article 2 of Regulation 945/70 of the Council must be interpreted as meaning that at the time of the facts in question wines originating from the coupage of table wines of Types A II and A I belonged to Type A II to the extent to which the coupage was authorized by national provisions.
2 The combined provisions of Article 6 of Regulation 1380/75 of the Commission and Article 8 of Regulation 192/75 of the Commission must be interpreted as meaning that a blended wine which does not fulfil the conditions for being treated, as an entity, as table wine of Type A II cannot benefit, on exportation to a non-member country, from monetary compensatory amounts proportionate to the quantity of wine of Type A II which it contains.
3 Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Regulation 2448/75 of the Commission.