French Republic v Commission of the European Communities.

• Jurisdiction: European Union
• Celex Number: 62000CC0456
• ECLI: ECLI:EU:C:2002:371
• Court: Court of Justice (European Union)
• Docket Number: C-456/00
• Date: 13 June 2002
• Procedure Type: Recurso de anulación - infundado

OPINION OF ADVOCATE GENERAL
TIZZANO
delivered on 13 June 2002 (1)


Case C-456/00

French Republic
v
Commission of the European Communities

((Annulment proceedings – State aid – Common organisation of the wine market – Aid for the conversion of vineyards in Charentes))

1. By an action brought on 18 December 2000, the French Republic has sought, pursuant to Article 230 EC, the annulment of Commission Decision No 2001/52/EC of 20 September 2000 (hereinafter the contested decision) (2) declaring as incompatible with the common market aid granted by France for the conversion of vineyards in Charentes and requiring recovery of the aid from the beneficiaries. I ─ Legal framework

A ─

The provisions of the EC Treaty 2. The first paragraph of Article 36 EC provides:The provisions of the Chapter [of the present Treaty] relating to rules on competition shall apply to production of and trade in agricultural products only to the extent determined by the Council within the framework of Article 37(2) and (3) and in accordance with the procedure laid down therein, account being taken of the objectives set out in Article 33. 3. Article 87(1) EC provides:Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the common market. 4. Pursuant to Article 87(3)(c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest may be regarded as compatible with the common market.

B ─

The relevant provisions of the common organisation of the wine market 5. A common organisation of the markets (COM), introduced in the wine sector as from 1962, was supplemented for the first time in 1970 by Regulation (EEC) No 816/70. (3) Since then, the basic provisions of the COM in wine have been amended and supplemented on several occasions. In what follows I will refer to the provisions relevant to the present case. (a) The COM in wine governed by Regulation (EEC) No 822/87 6. Regulation (EEC) No 822/87 (4) codified and supplemented the basic provisions concerning the COM in wine in force at that time. The 14th recital of that regulation states that: ... the situation of the wine market with its large surpluses is deteriorating very rapidly and is likely ... to jeopardise the attainment of the objectives of Article 39 of the Treaty (now Article 33 EC) because of the excessive pressure brought to bear on producers' incomes. 7. For the purpose of guaranteeing a balanced market, Regulation No 822/87 therefore makes provision for a temporary ban on the new planting of vines. To that end, Article 6(1) provides: ... All new planting of vines shall be prohibited until 31 August 1990.However, authorisations for new plantings may be granted by Member States in respect of areas intended for the production of quality wines psr [quality wines produced in specific regions] production of which the Commission has recognised, because of their qualitative features, as being far below demand.The duration of that ban was subsequently extended on several occasions up to 31 August 2000. (5) 8. To the same end, Regulation No 822/87 lays down particularly stringent conditions governing the granting of national aid for the planting of new vines. Article 14, as amended by Regulation (EEC) No 2253/88, (6) provides as follows: 1. The granting of national aid for the planting of category 3 areas cultivated for the production of table wines shall be prohibited. 2. As regards the planting of wine-growing areas other than those referred to in paragraph 1, the granting of national aid shall be prohibited except where it is:

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laid down by specific Community provisions,

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allowed pursuant to Articles 92 to 94 of the Treaty [now Articles 87 to 89 EC] and contains criteria which should, in particular, enable the objective of reducing production quantity or of improving quality to be attained without leading to increased production. These criteria shall be adopted in accordance with the procedure laid down in Article 83. 3. The prohibition referred to in paragraph 2 shall apply as from 1 September 1988. ... 9. Article 76 of Regulation No 822/87 subsequently renders the provisions of the Treaty concerning State aid applicable to the wine sector, save as otherwise provided in that regulation. 10. With Regulation (EEC) No 2741/89, (7) the Commission laid down criteria for assessing national aid as referred to in Article 14 of Regulation No 822/87. Pursuant to Article 3(1) of Regulation No 2741/89: ... planting must involve varieties [of vines] which, in the terrain concerned:

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are not considered high-productivity varieties,

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are recognised as improving quality,

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are specifically authorised by the national authorities under the draft aid measure concerned

. 11. The first paragraph of Article 5 of the same regulation further provides that:The amount of aid granted per hectare of vineyard planted may not exceed 30% of the actual cost of grubbing-up and planting. (b) The COM in wine governed by Regulation (EC) No 1493/1999 12. Council Regulation (EC) No 1493/1999 of 17 May 1999 (8) repealed Regulation No 822/87, making far-reaching amendments to the COM in wine and re-establishing in a single text the provisions in force in the sector. That regulation entered into force on 21 July 1999, but became applicable on 1 August 2000. 13. The 11th recital of Regulation No 1493/1999 states:to capitalise on and consolidate the improved market balance, and to better align supply on demand for different types of product, there should be a framework of measures on the management of wine-growing potential, to include restrictions on planting in the medium term, premiums for the permanent abandonment of wine-growing and support for the restructuring and conversion of vineyards. 14. As regards the planting of new vineyards, Article 2(1) of the Regulation provides: Planting with vines of wine grape varieties classified pursuant to Article 19(1) shall be prohibited until 31 July 2010 ... .Until the same date, grafting of wine grape varieties on to varieties other than wine grape varieties shall also be prohibited. 15. With regard to the restructuring and conversion of vineyards, Article 11 provides: 1. A system for the restructuring and conversion of vineyards is hereby established. 2. The objective of the system shall be the adaptation of production to market demand. 3. The system shall cover one or more of the following measures: (a) varietal conversion, including by means of grafting on; (b) relocation of vineyards; (c) improvements to vineyard management techniques related to the objective of the system. The system shall not cover the normal renewal of vineyards which have come to the end of their natural life. ... 16. Further, pursuant to the second paragraph of Article 15 of the regulation, in the context of the implementing rules for the restructuring and conversion of vineyards, provision may be made for provisions aiming to prevent an increase in production potential arising out of this Chapter. 17. Finally, Article 71(1) of Regulation No 1493/1999 provides that Articles 87 to 89 are applicable to the wine sector, save as otherwise provided in that regulation. 18. Commission Regulation (EC) No 1227/2000 of 31 May 2000 (9) lays down detailed rules for the application of Regulation No 1493/1999, particularly as regards production potential, and repeals, inter alia, Regulation No 2471/89. As regards the restructuring and conversion of vineyards, Article 13(c) provides that the Member States are to establish:rules limiting the use, in implementing a plan [of restructuring and conversion], of replanting rights which arise from grubbing-up as set out in the plan where so doing would lead to a possible increase in the yield of the area covered by it. The rules shall be designed to ensure that the objective of the system is met, and in particular to ensure that there is no overall increase in production potential in the Member State concerned. II ─ Facts

A ─

Antecedent facts and administrative procedure 19. In February 1999, the French Government notified to the Commission a system of aid for the conversion of vineyards in Charentes from the production of cognac to vin de pays (typical wines, that is to say table wines described by a geographical indication). (10) The purpose of the system was to promote wine production in line with consumer demand, whilst reducing the volume of cognac production in respect of which a crisis situation in the market had led to a considerable increase in stocks. 20. The system involved four separate aid measures, one of which consisted of a supplementary national aid for the improvement of vine varieties (hereinafter the aid for varietal conversion or, more simply, the aid). I will limit my comments to that measure since it is with that measure that the contested decision is concerned. 21. The aid for varietal conversion provided for the granting of an additional payment of FRF 10 000 per hectare to wine growers who were eligible to benefit from a system of aid already existing in France, namely national aid for the improvement of vine varieties. (11) The purpose of such additional aid was to encourage, initially over an area of 1 000 hectares in the region concerned, the grubbing-up of...