Report for the Hearing in Case C-210/89
I — Facts
1. Article 22(1) of Regulation (EEC) No 804/68 of the Council of 27 June 1968 on the common organization of the market in milk and milk products (Official Journal, English Special Edition 1968 (I), p. 176) prohibits any quantitative restriction or measure having equivalent effect in trade within the Community. Italian Law No 396 of 2 February 1939 prohibits the production, importation and sale on the Italian market of cheese whose fat content is lower than the minimum fixed by that law which varies according to each type of cheese. Cheeses lawfully manufactured and marketed in another Member State may not therefore be marketed in Italy if their fat content is lower than the prescribed minimum. A derogation from that rule may be made for certain local cheeses and for those covered by the International Convention on the use of designations of origin and names for cheeses signed at Stresa on 1 June 1951.
2. Since that national legislation was not in conformity with Article 30 of the EEC Treaty or with the aforesaid provisions of Regulation No 804/68 of 27 June 1968, the Commission decided to initiate the procedure provided for in Article 169 of the Treaty. Accordingly, by letter of 11 January 1988 it requested the Italian Government to submit its observations within two months on the infringement alleged against it. In its letter, the Commission acknowledged that in the absence of Community rules on the production and marketing of cheeses, the Member States retained the right to legislate in the matter (judgment in Case 237/83 Jongeneel Kaas v Netherlands [1984] ECR 483) and, in particular, to lay down specific requirements such as the minimum fat content for each variety of cheese. According to the Commission, however, national rules of that kind had to be compatible, in particular, with Articles 30 and 36 of the Treaty. They could not therefore create, directly or indirectly, actually or potentially, any obstacle to intra-Community trade (judgment in Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837), unless they were justified by overriding requirements, such as the protection of public health, fair trading and the defence of consumers (see, for example, the judgment in Case 120/78 REWE v Bundesmonopolverwaltung für Branntwein [1979] ECR 649). Furthermore, where they had a choice between different measures for attaining the objective pursued, the Member States should adopt the one which was least restrictive of trade. The Commission also explained that the Italian legislation was such as to hinder the sale in Italy of cheeses lawfully manufactured and sold in other Member States and that it therefore constituted a measure having equivalent effect to a quantitative restriction within the meaning of Article 30 of the Treaty (judgment in Case 130/80 Kelderman [1981] ECR 527). In the Commission's view, such an obstacle to trade could not be justified by the need to protect public health since the consumption of cheeses with a lower fat content could not constitute a danger to health and, moreover, the Italian law itself provided for the confiscation of products contravening that provision and their distribution to charitable organizations. As for fair trading and consumer protection, these could be properly safeguarded, according to the Commission, by means of adequate labelling. Finally, referring to the case-law of the Court (for example Case 182/84 Miro [1985] ECR 3731, or Case 178/84 Commission v Germany [1987] ECR 1227), the Commission claimed that the fact that cheeses with a fat content lower than the prescribed minimum could be sold in Italy under a name other than ‘cheese’ was not sufficient to make the Italian legislation compatible with Articles 30 and 36.
3. On 18 April 1988, in reply to the Commission's letter of formal notice, the Italian authorities denied that Community law had been infringed. They contended that the Community rules did not specify a minimum fat or dry matter content for cheese and that the Member States were empowered to lay down specific requirements in the matter. Furthermore, in other Member States of the Community, such as the French Republic, the Federal Republic of Germany and the Kingdom of Denmark there were rules imposing obligations and prohibitions, with penalties for contravention, as regards the composition of cheeses. Such rules could not be maintained, according to the Commission's reasoning, if exporters could refrain from applying them on the ground that the cheeses in question had been manufactured in accordance with the provisions in force in their country of origin. The Italian legislature had intended to restrict the appellation ‘cheese’ to products traditionally regarded as such by consumers and containing specified nutrients. In Italy, many cheese products are manufactured without qualifying for the appellation in question and are sold under fancy names. Finally, the Italian authorities pointed out that merely to require labelling that provided adequate information for consumers would ultimately lead to the quality of the products being harmonized at the lowest level.
4. The Commission was not satisfied by that reply and on 21 November 1988 it issued a reasoned opinion with which the Italian State was required to comply within two months. The reasoned opinion incorporated the observations set out in the Commission's previous letter of formal notice and replied to the remarks made by the Italian authorities. The Commission referred to the case-law of the Court (Case 178/84 Commission v Germany, cited above), according to which consumers' conceptions could vary from one Member State to another and were likely to evolve in the course of time and national legislation was not to serve to crystallize consumer habits. The Commission added that the fact that the Italian legislation applied to domestic and imported products alike was not sufficient to make it compatible with Article 30 of the Treaty and, moreover, the fact that a certain designation was restricted to a given type of cheese constituted a measure having equivalent effect, except in the case of products originating from a specified geographical area. With regard to labelling, the Commission pointed out that it was an appropriate method of defending the supposedly superior quality of the product in question. Finally, the Commission recalled the wording of the answer given by the Court in Case 286/86 Ministère public v Deserbais [1988] ECR 4907.
5. The Commission's reasoned opinion drew no response from the Italian authorities.
II — Written procedure and form of order sought by the parties
1. By an application lodged at the Court Registry on 6 July 1989, the Commission brought an action before the Court under the second paragraph of Article 169 of the Treaty. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure after putting a question to the Italian Republic.
2. The Commission claims that the Court should: (i) declare that, by making the importation of cheeses into Italy subject to compliance with the provisions of Law No 396 of 2 February 1939 —and in particular the provisions which prohibit the production for sale of cheeses whose fat content is lower than that prescribed by the Italian legislation (Article 1 of the aforesaid law) — the Italian Republic has failed to fulfil its obligations under Article 30 of the EEC Treaty and Article 22(1) of Regulation No 804/68 of 27 June 1968 on the common organization of the market in milk and milk products; (ii) order the Italian Republic to pay the costs.
3. The Italian Republic contends that the Court should dismiss the application as unfounded.
III — Pleas in law and arguments of the parties
1. The Commission relies on the arguments which it had put forward in the pre-litigation procedure in support of the view that by prohibiting the marketing in Italy of products which are not in conformity with the rules laid down by the Italian legislation, when Community law does not prescribe a minimum fat content for cheeses, the Italian State has infringed Article 30 of the EEC Treaty and Article 22(1) of Regulation No 804/68 of 27 June 1968. The Commission lays emphasis, in particular, on the fact that although, in the absence of any Community rules in the matter, each Member State may regulate the production and marketing of cheeses, it cannot require cheeses imponed from other Member States to be in conformity with its national legislation. With regard to the argument put forward by the Italian Government regarding the need to protect consumers, the Commission observes that the contested legislation is excessive for those purposes and constitutes in fact a protectionist measure in favour of domestic products. Consumer protection does not warrant the adoption of a measure which is so restrictive of intra-Community trade and could be sufficiently ensured by adequate labelling.
2. The Italian Republic points out that the Italian legislature intended to restrict the name ‘cheese’ solely to products containing specified nutrients, with a view to protecting the legitimate expectations of consumers as regards the traditional manufacture of that foodstuff. Those rules also prevent numerous domestic products from being designated as ‘cheese’; such products are released for consumption under other names. The legislation in question cannot be regarded as contrary to Community law. In the absence of any Community rules in the matter, the Member States retain the power to adopt rules within their own territory in respect of the production, marketing and designation of those products, including the power to lay down specific requirements such as the minimum fat content for every variety of cheese. A number of Member States such as the French Republic, the Federal Republic of Germany and the Kingdom of Denmark have exercised that power. In the light of that situation, in which different national rules exist side by side lawfully regulating the production of the foodstuff known as ‘cheese’ within the various Member States, the application of the principle of freedom to market cheese in conformity with the rules of the country of manufacture, as opposed to those of the country in which the product is released for consumption, would lead to serious confusion to the detriment of consumers. The Italian Republic considers that the solution suggested by the Commission, namely appropriate labelling of the products concerned, would not be sufficient to dispel such confusion. Where two products exhibit identical characteristics, one could be designated by the name ‘cheese’ and the other could be designated by a different name; conversely, one and the same designation could be used for products with differing characteristics. Consumers would thus be unable to rely on that designation, the use of which would not be free from inconsistency or contradiction. Finally, the Italian Republic emphasizes that since the contested legislation was introduced not with a protectionist aim but in the interests of consumers, the competent authorities were examining whether it was appropriate to maintain it in the present circumstances. That might lead to a review of the legislation, enabling the obstacles to trade complained of by the Commission to be removed.
IV — Answer to a question from the Court
The following question was put to the Italian Government:
‘In its defence the Italian Government maintains that its national legislation prohibits only the marketing, under the name “cheese”, of products whose fat content is lower than the minimum prescribed by the Law of 2 February 1939 but does not prohibit the marketing of those products under other names. According to its actual wording, however, the Law of 2 February 1939 seems to be broader in scope since it would appear to prohibit purely and simply the production and marketing of cheeses not complying with the minimum fat content, without exempting from that prohibition products marketed under a name other than “cheese”. Furthermore, notwithstanding a lower fat content those products would seem to be capable of falling within the definition of “cheese” set out in the Royal Decree Law of 15 October 1925. In those circumstances, the Italian Government is requested to inform the Court within one month of the basis for its aforesaid statements regarding the scope of the relevant national legislation.’
In its reply, the Italian Government first draws the Court's attention to the fact that the statements in its defence concerning the scope of the prohibition laid down in the Law of 2 February 1939 —limited to the use of the name ‘cheese’ — had already been explained to the Commission in the pre-litigation procedure, as the Commission itself concedes in its reasoned opinion. The Commission has therefore accepted the Italian Government's position and acknowledged that the infringement lay in the existence of a prohibition concerning the use of the name ‘cheese’, and forming an obstacle, and not an absolute bar to the importation and marketing, under another name, of products not complying with the conditions laid down by the national legislation on cheeses.
With regard to the substance of the question, the Italian Government states that it consulted the Directorate-General for the Economic Protection of Agricultural Products, forming part of the Ministry of Agriculture and Forestry. That department considers that the national legislation in force merely has the effect of restricting the name ‘cheese’ to products containing the nutrients specified in the Law of 2 February 1939 and that milk products with a fat content lower than that prescribed by law and offered for sale under a name other than ‘cheese’ are freely imported into Italy (two products freely marketed in Italy are cited by way of illustration).
That outline of the factual position seems to correspond to the legislation now in force. Article 32 of Royal Decree Law No 2033 of 15 October 1925 is also designed to regulate the use of the name ‘cheese’ by restricting it to products exhibiting certain characteristics. However, where the aim of the law was not only to reserve a given name but also to prohibit the production or importation of specified products not exhibiting certain characteristics, this was made clear by means of the distinction drawn between the use of the name and the prohibition on production. That is the case, as the Court is aware (judgment in Case 193/80 Commission v Italy [1981] ECR 3019), with regard to the rules on vinegar.
F. Grévisse
Judge-Rapporteur
1 Language of the case: Italian.