Court of Justice of the European Communities (including Court of First Instance Decisions)

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Agriculture ° Common organization of the markets ° Wine ° Description and presentation of wines ° Quality wines produced in specified regions ° Use of the term "château" by wine-growers cultivating plots formerly belonging to the estate of a château and making wine on the premises of their cooperative ° Whether permissible ° Participation in a cooperative of wine-growers cultivating plots not formerly belonging to the château estate ° No effect in the event of recourse to reliable procedures ensuring that the grapes are not mixed
(Commission Regulation No 997/81, Art. 5(1), and No 3201/90, Art. 6)

Article 5(1) of Regulation No 997/81 laying down detailed rules for the description and presentation of wines and grape musts, which makes the use of the term "château" to designate the name of the vineyard where the wine in question was produced subject to the twofold requirement that the wine was made exclusively from grapes harvested from that same vineyard and that the wine-making process was carried out there, like Article 6 of Regulation No 3201/90 which replaced it, and which is couched in similar terms, does not preclude the use of the term in question by wine-growers producing grapes on lands forming part of the original estate of a château, who have formed a cooperative on whose premises they make wine.
The fact that a cooperative includes amongst its members both wine-growers whose land derives from the partition of the original estate of a château, and wine-growers who harvest grapes outside that estate, does not preclude the application of Article 5(1) of Regulation No 997/81 or Article 6 of Regulation No 3201/90, provided that reliable procedures are introduced to ensure that the grapes harvested by the former are not mixed with those harvested by the latter.

In Case C-403/92,
REFERENCE to the Court under Article 177 of the EEC Treaty by the French Cour de Cassation for a preliminary ruling in the proceedings pending before that court between
Claire Lafforgue, née Baux,
François Baux
and
Château de Calce SCI,
Coopérative de Calce (Société),
on the interpretation of Article 5(1) of Commission Regulation (EEC) No 997/81 of 26 March 1981 laying down detailed rules for the description and presentation of wines and grape musts (OJ 1981 L 106, p. 1),
THE COURT (Fifth Chamber),
composed of: J.C. Moitinho de Almeida, President of the Chamber, R. Joliet (Rapporteur), G.C. Rodriguez Iglesias, F. Grévisse and M. Zuleeg, Judges,
Advocate General: F.G. Jacobs,
Registrar: D. Louterman-Hubeau, Principal Administrator,
after considering the written observations submitted on behalf of:
° Claire Lafforgue and François Baux, by Jacques Boré and Olivier Monroux, of the Libourne Bar, and Lise Funck-Brentano, of the Paris Bar,
° Société Civile Immobilière Château de Calce and Société Coopérative de Calce, by Laurent Parmentier, of the Paris Bar,
° the French Government, by Philippe Pouzoulet, Deputy Director in the Directorate for Legal Affairs at the Ministry of Foreign Affairs, and Jean-Louis Falconi, Secretary for Foreign Affairs in the same directorate, acting as Agents,
° the Italian Government, by Professor Luigi Ferrari Bravo, Head of the Legal Affairs Department in the Ministry of Foreign Affairs, acting as Agent, assisted by Ivo Braguglia, Avvocato dello Stato,
° the Commission of the European Communities, by Gérard Rozet, Legal Adviser, acting as Agent,
having regard to the Report for the Hearing,
after hearing the oral observations of Claire Lafforgue and François Baux, Société Civile Immobilière Château de Calce and Société Coopérative de Calce, the French Government and the Commission, at the hearing on 2 December 1993,
after hearing the Opinion of the Advocate General at the sitting on 10 February 1994,
gives the following
Judgment

1 By judgment of 17 December 1991, received at the Court on 2 December 1992, the French Cour de Cassation referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 5(1) of Commission Regulation No 997/81 of 26 March 1981 laying down detailed rules for the description and presentation of wines and grape musts (hereinafter "the implementing regulation"), in conjunction with any other relevant provision of Community law, in order to resolve a dispute concerning the use of the term "château".
2 The dispute, between Claire Lafforgue, née Baux, and her brother, François Baux (hereinafter "the Baux-Lafforgues"), wine-growers residing in Calce-par-Rivesaltes (Pyrénées Orientales, France), on the one hand, and other wine-growers belonging to the Société Coopérative de Calce, and the Société Civile Immobilière Château de Calce, on the other, concerns the use by the Société Coopérative and the Société Civile of the name "Château de Calce".
3 It is apparent from the documents before the Court that, by notarial act of 14 August 1863, the owners of an estate at Calce-par-Rivesaltes, consisting of a château and land, partitioned and sold their lands to a number of families in the village. Subsequently, the castle itself was also divided.
4 Mrs Baux is the present owner of the main part of the original château. She and her brother own three hectares of vineyards around the château, from whose grapes they make wine in cellars situated within the château. Their wine qualifies for the registered designation of origin "Côtes du Roussillon". In order to market that wine, the Baux-Lafforgues registered the name "Château Lafforgue" on 28 July 1986 with the Institut National de la Propriété Industrielle (hereinafter "the INPI").
5 The other 50 or so wine-growers in the village, who are descended from those who acquired the remainder of the estate, own between them 150 hectares of vineyards on the original estate. Together with other wine-growers, they formed the Société Coopérative de Calce, on whose premises they make wine from the grapes harvested on their individual plots. Their wine is also covered by the registered designation of origin "Côtes du Roussillon". On 4 October 1986 those wine-growers formed the Société Civile Immobilière Château de Calce which acquired inter alia an annex to the château and a building including a section of the original surrounding wall and a window adjoining Mrs Lafforgue' s property. On 5 December 1986, with a view to marketing its wines, the Société Coopérative de Calce registered the name "Château de Calce" with the INPI.
6 On 13 February 1987 the Baux-Lafforgues instituted proceedings against the Société Civile Immobilière Château de Calce and the Société Coopérative de Calce before the Tribunal de Grande Instance de Perpignan (France) for a declaration that Mrs Lafforgue, as owner of the Château de Calce, had the sole right to use the name "Château de Calce" and that, accordingly, the first defendant was barred from using it as part of the company name and the second defendant was barred from using it to refer to the wine. By judgment of 22 September 1988 the Tribunal upheld the plaintiffs' application. It took the view that the name "Château de Calce" attached to Mrs Lafforgue' s property and that its use by the two defendants was capable of misleading consumers, particularly since the Baux-Lafforgues were themselves wine-producers. However, that judgment was reversed on 12 July 1989 by the Court d' Appel de Montpellier (France), which considered that all the recipients of the land, and their descendants, retained as a result of the partition of the estate the right to the name "Château de Calce", even if they were not owners of the château buildings.
7 The Baux-Lafforgues thereupon appealed against that judgment to the Cour de Cassation on the ground, in particular, that the Cour d' Appel de Montpellier had infringed Article 5 of the implementing regulation, which made the use by a vineyard of the term "château" subject to the twofold condition that the wine was made exclusively from grapes harvested from vines belonging to that vineyard and that the wine-making process was carried out there. In their view, those two conditions were not fulfilled by the Société Coopérative de Calce. The Baux-Lafforgues argued that Article 5 required a "château" wine to be made exclusively from grapes harvested in a single vineyard designated as a "château", so as to ensure a fair description of the origin of the wine and uniform quality of production. An agricultural cooperative comprising different wine-growers who produce different vine varieties could not ensure the unique and uniform production which was the hallmark of a wine. The Baux-Lafforgues further considered that "Château de Calce" could be used as the name of a wine only on condition that the grapes harvested from vines belonging to a vineyard designated as a "château" were made into wine in its cellars. In their view, the members of the cooperative did not own the château and could not therefore retain the right to call their wine "Château de Calce", since that right was subject to the wine being produced in the cellars of the château.
8 Since the interpretation of Article 5(1) and its application to this case were called in question in the proceedings before it, the French Cour de Cassation decided to seek a preliminary ruling on the following two questions:
"1 Is the provision applicable were wine-growers produce wine bearing a registered designation of origin on lands forming part of the estate of a château which has been partitioned, and the wine-growers have formed a cooperative society on whose premises the product of the harvest is made into wine?
2 Is the answer any different if the cooperative includes among its members wine-growers whose lands did not form part of the original estate of the château?"
The first question
9 In its first question, the national court seeks essentially to ascertain whether Article 5(1) of the implementing regulation precludes the use of the term "château" by wine-growers producing grapes on lands forming part of the original estate of a château, who have formed a cooperative on whose premises they make wine.
10 French wines bearing a registered designation of origin, such as those produced by the Baux-Lafforgues and by the Société Coopérative de Calce, are regarded as quality wines produced in specified regions (hereinafter "quality wines psr") (see Article 16(2) of Council Regulation (EEC) No 338/79 of 5 February 1979 laying down special provisions relating to quality wines produced in specified regions (OJ l979 L 54, p. 48) and Article 15(2) of Council Regulation (EEC) No 823/87 of 16 March 1987 laying down special provisions relating to quality wines produced in specified regions (OJ 1987 L 84, p. 59)).
11 So far as concerns quality wines psr, Council Regulation (EEC) No 355/79 of 5 February 1979 laying down general rules for the description and presentation of wines and grape musts (OJ 1979 L 54, p. 99) specifies in Article 12(1) the information which must be set out on the labelling. In Article 12(2), it provides as follows:
"In the case of quality wines psr, the description on the labelling may be supplemented by the following information:
...
(m) the name of the vineyard or group of vineyards where the quality wine psr in question was made, where this is likely to enhance the reputation of the wine and in so far as such information is governed by implementing rules or, failing this, by provisions of the producer Member States;
..."
12 Article 5 of the implementing regulation, which gives effect to the latter provision and is relied upon by the Baux-Lafforgues, provides as follows:
"1. When describing a vineyard in which [the] wine concerned was obtained in accordance with Article ... 12(2)(m) of Regulation (EEC) No 355/79, the terms:
' château' , 'domaine' , ...
may be used only if the wine concerned was made exclusively from grapes harvested from [vines] belonging to that vineyard and the wine-making process was carried out there.
2. Producer Member States may:
(a) lay down additional criteria for the use of the terms mentioned in paragraph 1 in respect of wines made from grapes harvested on their territory;
(b) limit the use of one or more of those terms to certain categories of wine obtained on their territory;
..."
13 Accordingly, Article 5(1) merely defines the conditions for using a number of terms, including "château", to designate the name of a vineyard. Those conditions are two in number, first, that the wine concerned was made exclusively from grapes harvested from the vineyard in question and, second, that the wine-making process was also carried out there.
14 The aim of that twofold requirement is to protect consumers and provide them with correct information. Article 43 of Regulation No 355/79 provides essentially that the description of wines must not be liable to cause confusion as to the origin of the product. In that regard, it points out that the description must be such as not to create a false impression of the identity or status of the natural or legal persons or group of persons involved in the production or distribution of the product in question.
15 The Community rules at issue in this case were designed to guarantee to consumers who purchase wine bearing a prestigious name, such as "château", that the main stages involved in the process of making that wine, namely those between harvesting and wine production, have been carried out under the actual direction, close and continuous supervision and exclusive responsibility of a wine-grower with whom the quality of the product can be associated.
16 Article 5(1) of the implementing regulation does not define the term " vineyard". However, it gives effect to Article 12(2)(m) of Regulation No 355/79 which places on the same footing a vineyard or group of vineyards, in so far as the wine-grower' s name is governed by implementing rules. Accordingly, Article 5, which constitutes one of the implementing rules thus laid down, must be regarded, where it refers to a "vineyard", as covering a single vineyard or group of vineyards.
17 Article 5(2), however, authorizes Member States to make the use of the term "château" subject to further conditions and to restrict such use to certain categories of wine.
18 Thus, while leaving to the national authorities the option of adopting restrictive provisions, the Community rules themselves do not require there to be a château on the lands where the grapes have been harvested.
19 Nor do those Community rules require wine to be made on premises situated on an estate comprising a château. Furthermore, it does not follow from those rules that wine-growers must themselves be the owners of wine-making premises. Accordingly, the fact that wine is made on premises belonging to a cooperative made up of wine-growers is also irrelevant under Community law, provided that all the grapes are harvested in vineyards forming part of that undertaking and that reliable procedures are introduced to ensure that the grapes harvested on land belonging to the original estate of the château are made into wine separately.
20 The conclusion must therefore be drawn that the Community rules at issue in this case do not preclude the use of the term "château" by wine-growers whose lands formed part of the original estate of a château and who have formed a cooperative.
21 Since the national court asked its question with reference not only to the regulation implementing Regulation No 355/79, but also to any other relevant Community legislation, it should be noted that Regulation No 355/79 was repealed as from 4 September 1979 by Council Regulation (EEC) No 2392/89 of 24 July 1989 laying down general rules for the description and presentation of wines and grape musts (OJ 1989 L 232, p. 13). However, Article 11(2)(m) of the latter regulation is identical to Article 12(2)(m) of Regulation No 355/79. Similarly, the implementing regulation was repealed as from 1 January 1991 by Commission Regulation (EEC) No 3201/90 of 16 October 1990 laying down detailed rules for the description and presentation of wines and grape musts (Official Journal 1990 L 309, p. 1). However, Article 6 of that regulation is couched in terms similar to those of Article 5 of the implementing regulation. It follows that the interpretation set out here also applies in connection with the regulations at present in force.
22 The answer to the national court must therefore be that Article 5(1) of Regulation No 997/81, like Article 6 of Regulation No 3201/90, does not preclude the use of the term "château" by wine-growers producing grapes on lands forming part of the original estate of a château, who have formed a cooperative on whose premises they make wine.
The second question
23 In its second question, the French Court of Cassation asks whether Article 5(1) of the implementing regulation precludes the term "château" from being used to designate the name of a vineyard on the label of a quality wine psr, where the wine was made on the premises of a cooperative whose members include wine-growers whose lands did not form part of the original estate of a château.
24 In that regard, it should be noted that the fact that some members of the cooperative cultivate land which does not belong to the original estate of the château and which, therefore, does not necessarily produce grapes whose quality is comparable to that of the grapes harvested from lands forming part of the original estate, is immaterial, provided that reliable procedures are introduced to ensure that the grapes harvested outside the original estate of the château are not mixed with those harvested from the estate.
25 The answer to the national court' s question must therefore be that the fact that a cooperative includes among its members both wine-growers whose land derives from the partition of the original estate of a château, and wine-growers who harvest grapes outside that estate, does not preclude the application of the provisions in question, provided that reliable procedures are introduced to ensure that the grapes harvested by the former are not mixed with those harvested by the latter.

Costs
26 The costs incurred by the French and Italian Governments and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, 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 (Fifth Chamber),
in answer to the questions referred to it by the French Cour de Cassation, by judgment of 17 December 1991, hereby rules:
1. Article 5(1) of Commission Regulation (EEC) No 997/81 of 26 March 1981 laying down detailed rules for the description and presentation of wines and grape musts, like Article 6 of Commission Regulation (EEC) No 3201/90 of 16 October 1990 laying down detailed rules for the description and presentation of wines and grape musts, does not preclude the use of the term "château" by wine-growers producing grapes on lands forming part of the original estate of a château, who have formed a cooperative on whose premises they make wine.
2. The fact that a cooperative includes among its members both wine-growers whose land derives from the partition of the original estate of a château, and wine-growers who harvest grapes outside that estate, does not preclude the application of the provisions in question, provided that reliable procedures are introduced to ensure that the grapes harvested by the former are not mixed with those harvested by the latter.