JUDGMENT OF 28. 6. 1979 — JOINED CASES 233, 234 AND 235/78 LENTES v GERMANY

In Joined Cases 233, 234 and 235/78 REFERENCE to the Court under Article 177 of the EEC Treaty by the Verwaltungsgericht Frankfurt-am-Main for a preliminary ruling in the actions pending before that court, in Case 233/78 between

THE COURT (First Chamber) composed of: J. Mertens de Wilmars, President of Chamber, A. O'Keeffe and T. Koopmans, Judges Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

The facts and the arguments put forward by the parties in the course or the written procedure may be summarized as follows:

I — Facts and procedure

Pursuant to Regulation (EEC) No 2015/76 of the Commission of 13 August 1976 on storage contracts for table wine, grape must and concentrated grape must (Official Journal L 221 of 14 August 1976, p. 20) intervention agencies shall conclude contracts only with ‘producers, whether as individuals or in groups’ (Article 2 (1)), which contracts shall relate to a minimum quantity of 100 hectolitres in the case of wine and 50 hectolitres in the case of must and concentrated must (Article 5).

According to Article 4 of that regulation storage contracts shall include at least the following information:

‘(a) the name and address of the producer or producers concerned; (b) the name and address of the intervention agency; (c) the following technical details: the nature of the product (wine, grape must or concentrated grape must), the place of storage, particulars enabling the containers in which the product is stored to be identified.’

According to Article 7 Member States ‘shall take all measures to ensure that the necessary checks are made, and in particular that the identity of the product under contract may be verified and that the volume of the product stored agrees with that specified in the contract.’

According to Article 14 the producer shall inform the intervention agency in advance of any change made during the period for which the contract is concluded as regards:

a) the place of storage, or

b) the manner in which the product is put up, if such change means an increase in the number of containers in which it is stored.

The plaintiffs in the main actions are wine producers. At the beginning of 1978 a number of producers made application together to the Bundesamt für Ernährung und Forstwirtschaft (Federal Food and Forestry Office), with a view to concluding a storage contract for table wine but they were able to reach the minimum quantity of 100 hectolitres only by adding lesser amounts which each plaintiff held separately in his own cellars. The Bundesamt für Ernährung und Forstwirtschaft rejected the applications on the ground that the minimum quantity of 100 hectolitres provided for in Article 5 of Regulation No 2015/76 had not been reached since that quantity, being stored in different cellars, had not been deposited in one place of storage whereas Regulation No 2015/76, in particular Article 4, must be interpreted as laying down that requirement.

When their objections against those decisions were dismissed, the plaintiffs brought three separate actions before the Verwaltungsgericht (Administrative Court) Frankfurt-am-Main. In those actions they challenge the argument of the Bundesamt, maintaining that it has overlooked the fact that in all cases in which different wines of the same type of table wine are covered by one contract but stored in different containers the technical details listed in Article 4 (2) (c) of the regulation, which include the place of storage, do not refer to the whole quantity but to the respective part quantity stored in one container. Furthermore, it cannot be concluded from the fact that Regulation No 2015/76 refers to the ‘place of storage’ that the whole quantity of wine covered by one storage contract must be stored in a single place since all the technical details listed in Article 4 (2) (c) of the said regulation are in the singular. Finally, the view of the defendant in the main action would render meaningless the possibility created by Article 2 (1) of the said regulation that contracts may be concluded with ‘producers … in groups’, since individual producers alone may not have the minimum quantity of 100 hectolitres required for the storage contract, given that small-scale producers do not generally have the means to store such a quantity.

Since the Verwaltungsgericht Frankfurt-am-Main considered that the cases entailed questions concerning the interpretation of Regulation No 2015/76 it referred, by three orders of 21 September 1978 which were received at the Court Registry on 26 October 1978, the following question:

‘Must Commission Regulation (EEC) No 2015/76 of 13 August 1976 on storage contracts for table wine, grape must and concentrated grape must (Official Journal L 221 of 14 August 1976) be understood, in particular on account of the expression “place of storage” used in Article 4 (2) (c) and Article 14 (a) of that regulation and because of the rule laid down in Article 5 as to the minimum quantity of 100 hectolitres in the case of wine and must, as meaning that the contracts which must be concluded relating to a minimum quantity of 100 hectolitres in the case of wine and must (Article 5 of the regulation) may, where a contract is concluded with producers in groups (first subparagraph of Article 2 (1) of the regulation), be concluded only if the whole minimum quantity of 100 hectolitres is stored in one cellar or in the cellars of one plot of land?’

By an order of 13 December 1978 the Court of Justice, after hearing the views of the Advocate General, ordered Cases 233/78, 234/78 and 235/78 to be joined for the purposes of the written and oral procedure.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC the Commission of. the European Communities submitted written observations.

By an order of 7 March 1979 the Court of Justice, after hearing the views of the Advocate General, decided to assign Joined Cases 233/78, 234/78 and 235/78 to the First Chamber.

The Court, having heard the report of the Judge-Rapporteur and the views of the Advocate General, decided to open the oral procedure without any preparatory inquiry.

II — Observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC.

Observations of the Commission

According to Articles 7 and 17 of Regulation No 2015/76 the Member States and intervention agencies are required to implement the measures provided for in that regulation. For this purpose they are empowered, as is made clear in the judgment of the Court of Justice in the Schöttler case (judgment of 11 July 1973 in Case 3/73 [1973] ECR 745), to lay down specific requirements in order to ensure that their task of supervision is implemented without, however, affecting rights to subsidies conferred under Community law. As to the interpretation of Articles 2, 4 and 5 of Regulation No 2015/76, the Commission finds that the regulation refers constantly to ‘the producer’ and ‘the place of storage’ and states in particular that a producer may conclude a contract only in respect of a product produced by him or on his responsibility and of which he remains the owner. The Commission, in response to the argument of the plaintiffs in the main actions to the effect that, as regards Article 2 (1) of Regulation No 2015/76, storage contracts may be concluded not only with individual producers but also with ‘groups’ of producers, notes that when that wording was adopted for the regulation it was intended principally to cover longer-term groupings, such as wine producing co-operatives, and not casual associations of unconnected producers. In the case of groups organized on the basis of legal relationships between their members the intervention agency has to deal only with a single party having personal liability, in contrast to casual groupings. In fact if the intervention agency were to conclude storage contracts with wine-growers such as the plaintiffs in the main actions, it would be obliged to treat each plaintiff as if he had concluded a contract for the part quantity belonging to such plaintiff alone. The purpose of the provision laying down a minimum quantity of 100 hectolitres was to prevent the risk of the intervention agency's having to deal with problems of divided liability.

The Commission then explains the reason for the requirement of a single place of storage, at least with regard to the requirement of a minimum quantity of 100 hectolitres of table wine. Since checks are very expensive and must be carried out by specialists the requirement of a minimum quantity of 100 hectolitres makes it possible to confine the expenses entailed in each storage contract within reasonable limits in so far as that minimum quantity is stored in a single place. The Commission accordingly concludes that the authors of Regulation No 2015/76 clearly took as their basis the principle that each storage contract was to be concluded with a single producer who wished to store on his premises a minimum of 100 hectolitres of table wine belonging to him.

III — Oral procedure

At the hearing on 5 April 1979 the plaintiffs in the main action, represented by Robert Scheid, Advocate at the

Koblenz Bar, and the Commission of the The Advocate General delivered his European Communities, represented by opinion at the hearing on 31 May 1979. its Agent Peter Kalbe, presented oral argument.

Decision

1. By three orders of 21 September 1978, received at the Court on 26 October 1978, the Verwaltungsgericht Frankfurt-am-Main submitted to the Court of Justice under Article 177 of the EEC Treaty on each occasion a question worded in identical terms concerning the interpretation of Commission Regulation (EEC) No 2015/76 of 13 August 1976 on storage contracts for table wine, grape must and concentrated grape must (Official Journal L 221, p. 20).

2. In view of the identical wording of those questions, the Court decided by order of 13 December 1978 to join the cases for the purposes of the written and oral procedure; it is necessary to do the same for the purposes of the judgment.

3. The question has been raised within the context of disputes between the Bundesamt für Ernährung und Forstwirtschaft, the intervention agency in the Federal Republic of Germany, and various German wine producers, two in Case 233/78, four in Case 234/78 and four in Case 235/78, who had formed groups so as to lodge applications for the conclusion of storage contracts for table wines provided for by Regulation No 2015/76. The Bundesamt für Ernährung und Forstwirtschaft rejected those applications on the ground that the minimum quantity of 100 hectolitres to which each contract must relate according to Article 5 of that regulation was not reached because the required quantity was stocked by the various producers in different cellars, whereas in the opinion of the Bundesamt für Ernährung und Forstwirtschaft the regulation in question requires that the minimum quantity of 100 hl must be stored in a single place of storage.

4. In these circumstances the national court has asked the Court of Justice the following question: ‘Must Commission Regulation (EEC) No 2015/76 of13 August 1976 on storage contracts for table wine, grape must and concentrated grape must (Official Journal L 221 of 14 August 1976) be understood, in particular on account of the expression “place of storage” used in Article 4 (2) (c) and Article 14 (a) of that regulation and because of the rule laid down in Article 5 as to the minimum quantity of 100 hl in the case of wine and must, as meaning that the contract which must be concluded relating to a minimum quantity of 100 hl in that e of wine and must (Article 5 of the regulation) may, where a contract concluded with producers in groups (first subparagraph of Article 2 (1) of the regulation), be concluded only if the whole minimum quantity of 100 hl is stored in one cellar or in the cellars of one plot of land?’

5. It is clear from the documents on the file that the contracts in question relate only to table wine, so that the reply to the question which has been asked can be restricted to that product without its being necessary to give a ruling on the discrepancy as regards grape must between the German version of Article 5 and the other versions.

6. Articles 5 and 6 of Regulation (EEC) No 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 were amended by Council Regulation (EEC) No 1160/76 of 17 May 1976 (Official Journal L 135, p. 1), provide for private storage aid and instruct the Commission to adopt in particular detailed rules for the conclusion of storage contracts to be entered into by producers and the national intervention agencies. In implementation of those provisions, Regulation No 2015/76 laid down, as stated in the second recital of the preamble thereto, ‘rules … covering the conclusion, the content, the period of validity and the effects of such contracts’.

7. For this purpose, Regulation No 2015/76 provides that the contracts must be concluded between the national intervention agencies and producers ‘whether as individuals or in groups’ (Article 2) inter alia in respect of table wines (Article 1) and only in respect of products stored on the territory of that Member State (Article 3). Article 4, which regulates the manner in which the contract must be drawn up, provides inter alia that it must include as a technical detail ‘the place of storage’. Article 5 provides that contracts must, in the case of wine, relate to a minimum quantity of 100 hl. Article 7, finally, provides that ‘the Member States shall take all measures to ensure that the necessary checks are made, and in particular that the identity of the product under contract may be verified and that the volume of the product stored agrees with that specified in the contract’.

8. According to the Bundesamt für Ernährung und Forstwirtschaft, supported in this respect by the Commission, it follows both from the wording of Articles 4 (2) (c) and 14 of Regulation No 2015/76 — in particular from the use of the expression ‘place of storage’ in the singular — and from the general scheme of that regulation that the minimum quantity of 100 hl must be stored in a single place of storage, which means that the quantity stored must be stored if not in the same cellar at least in cellars situated on one plot of land. It claims that this condition fulfils the strict requirement of an effective check on the storage operations. According to the plaintiffs in the main action, on the contrary, the conclusion cannot be drawn either from the wording or from the objectives of Regulation No 2015/76 that the wine must be stored in a single place. Such a requirement would result in handicapping small-scale producers; some dispersion of the quantity of 100 hl to which each contract must relate is not likely to hinder the necessary checks.

9. The use of the expression ‘place of storage’ in the singular in Articles 4 and 14 cannot be considered as decisive for an interpretation of the regulation to the effect that an obligation is imposed in storage contracts to store the quantity to which that contract relates in a single place. The singular is frequently used to refer to several objects in the legal terminology of both the Community and the Member States: Articles 4 and 14 also contain several expressions which may no doubt refer equally either to one or to several legal persons or objects (producer(s), contract(s), product(s)). It is moreover significant that although Article 8 of the regulation is worded in the plural in German and in the singular in the other languages this difference could not give rise to doubts as to the interpretation of that provision.

10. It is necessary to conclude from this that the expression ‘place of storage’ contained in Articles 4 and 14 cannot be interpreted to the effect that a duty to store the quantity forming the subject-matter of the contract in a single place must be imposed in the storage contracts.

11. As regards the argument based on the objectives of Regulation No 2015/76, it is necessary to observe that it follows both from the recitals of the preambles to Regulations Nos 816/70 and 2015/76 and from the wording of Article 5 of the latter regulation that the objective of private storage aid is to have an effect on market prices by means of a reduction in supply and that storage contracts must therefore relate to significant quantities, in other words quantities sufficient to have an effect on market prices; for this reason the contracts must relate to a minimum quantity of 100 hl. The attainment of that objective is not however linked to the storage in a single place of the quantities temporarily removed from the market. On the contrary, the duty to store the wine in a single storage place might form an obstacle to the attainment of the above-mentioned objective, in particular where the wines are those of various producers who have formed a group.

12. As regards the argument based on the need to ensure an effective check on the storage operations, it is impossible to contest the fact that there may be and that there is in fact a connexion between the effectiveness and the cost of the checks and the degree of dispersion of the places of storage. This finding does not however lead to the conclusion that there is a need to impose a duty to store the wine in a single place of storage at the risk of affecting adversely the objectives of the storage aid and of creating discrimination between large and small producers.

13. This does not however mean that the intervention agencies are obliged to conclude storage contracts no matter how dispersed the places in which the wines are stored. By giving the Member States the task of and responsibility for adopting ‘all measures to ensure that the necessary checks are made’, Article 7 of Regulation No 2015/76 grants those Member States a margin of discretion in determining, having regard to the specific conditions of the wine-growing zones in question, to what extent a multiplication of the places of storage would be likely to jeopardize the effectiveness of the check or to increase its costs out of proportion to the objective sought and thus justify a refusal to conclude a storage contract.

14. It is therefore necessary to reply to the question referred to the Court that the expression ‘place of storage’ used in Article 4 (2) (c) and Article 14 of Regulation No 2015/76 cannot be interpreted as obliging the national intervention agencies to refuse to conclude a storage contract — for a quantity, moreover, of at least 100 hl — with a producer or groups of producers of table wine on the sole ground that the quantity forming the subject-matter of the contract sought is not stored in a single place, in other words on one and the same plot of land. However it is for the competent national authorities to determine, having regard to the specific conditions in the wine-growing zones in question, to what extent a multiplication of the places of storage, which is likely to jeopardize the effectiveness of the check on storage operations or to make them abnormally expensive, allows the conclusion of storage contracts to be refused.

Costs

15. The costs incurred by the Commission of the European Communities, which 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 as to costs is a matter for that court.

On those grounds, THE COURT (First Chamber), in answer to the question referred to it by the Verwaltungsgericht Frankfurt-am-Main by three orders of 21 September 1978 entered on the Court Register on 26 October 1978, hereby rules:

1 The German version of Article 5 of Regulation No 2015/76 differs from the versions in the five other languages in that in the German version it is stated that the contracts shall relate to ‘eine Mindestmenge von 100 hl bei Wein und Most und von 50 hl bei konzentriertem Traubenmost’ whilst all the other versions refer to a minimum quantity of 100 hectolitres in the case of wine and 50 hectolitres in the case of must and concentrated must. This disparity was removed in the new version of Article 5 produced by the amendment in Reputation No 2945/78 of the Commission of 14 December 1978; the new wording reads in the versions in all the languages: ‘Contracts shall cover a minimum quantity of 100 hectolitres in the case of wine 50 hectolitres in the case of must and 30 hectolitres in the case of concentrated must’ (Official Journal L 351, p. 18).

2 Translator's note: The official English version of Article 2 in fact refers to ‘contracts’ and ‘products’.