Benito Francesconi and others v Commission of the European Communities. (Non) [1989] EUECJ C-326/86 (4 July 1989)

Judgment 1 By applications lodged at the Court Registry on 23 December 1986 ( Case 326/86 ) and 3 March 1988 ( Case 66/88 ) respectively, 20 dealers, restaurateurs or producers of Italian wine and the personal representatives of persons who died after drinking Italian wine containing methanol brought two actions under Article 178 and the second paragraph of Article 215 of the EEC Treaty against the Commission of the European Communities for compensation for damage suffered as a result of the presence of adulterated wine on the wine market . 2 The applicants claim they have suffered damage consisting for some of them in the reduction in exports of Italian wine and the resulting reduction in turnover ( Case 326/86 ) and for others in the loss of a member of their family ( Case 66/88 ). 3 In April 1985 Austrian wine adulterated with diethylene glycol was discovered on the market in the Federal Republic of Germany . At a press conference on 27 August 1985 the Commission stated that very slight traces of diethylene glycol had also been discovered in certain Italian wines . 4 On 19 March 1986 the Italian authorities informed the Commission that certain Italian wines were adulterated with methanol . The next day the Commission conveyed that information to the other Member States . The first deaths as a result of the consumption of Italian wine adulterated with methanol had been reported on 2 March 1986 . 5 The applicants consider that the Commission was guilty of a wrongful act or omission . They complain first of all of bad management and failure to supervise the wine market inasmuch as the Commission did not ensure the proper implementation of the general measures governing the wine market in the Member States . The applicants go on to say that those general measures are inappropriate . They submit in that respect that the measures adopted in the wine sector are such as to encourage the manufacture of adulterated wines, inter alia for consumption . Finally, the applicants claim that the Commission ought to have noticed the considerable increase in the quantity of wine in 1984 . As early as August 1985 it ought to have adopted appropriate measures to limit the damage suffered by the traders concerned as a result of the scandal caused by the presence of adulterated wines on the market . 6 The Commission denies that there was any wrongful act or admission as claimed by the applicants or that it is possible to establish a causal link between the alleged wrongful act or omission and the damage which the applicants have suffered . 7 Reference is made to the Report for the Hearing for a fuller account of the facts and the background to the case, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court . 8 With a view to considering whether the action is well founded it is appropriate to recall the conditions under which the Community may be held to be liable under the second paragraph of Article 215 of the EEC Treaty . The Court has consistently held ( see in particular the judgment of 15 January 1987 in Case 253/84 GAEC de la Ségaude v Council and Commission (( 1987 )) ECR 123 ) that Community liability depends on the coincidence of a set of conditions as regards the unlawfulness of the acts alleged against the institution, the fact of damage and the existence of a causal link between the wrongful act or conduct and the damage complained of . 9 It must first be determined whether the applicants have established unlawful conduct on the part of the Commission, and if so whether the two other conditions of Community liability are satisfied . 10 As a preliminary point it should be observed that it is for the Member States to ensure that the Community provisions in the wine sector are observed . 11 Pursuant to Article 64 of Council Regulation No . 337/79 of 5 February 1979 on the common organization of the market in wine ( Official Journal 1979, L 54, p . 1 ) Member States must designate one or more authorities to be responsible for verifying compliance with these provisions . Moreover, under Article 3 of Council Regulation No 359/79 of 5 February 1979 on direct cooperation between the bodies designated by Member States to verify compliance with Community and national provisions in the wine sector ( Official Journal 1979, L 54, p . 136 ) the competent bodies of the Member States must study in detail any grounds for suspecting that the product does not conform to the wine provisions . It is also the Member States who, pursuant to Council Decision 84/133/EEC of 2 March 1984 introducing a Community system for the rapid exchange of information on dangers arising from the use of consumer products ( Official Journal 1984, L 70, p . 16 ), may decide to take urgent steps to prevent the marketing of a product because of the serious and immediate risk which that product presents for the health or safety of consumers . 12 It follows from the terms of that legislation that the Community institutions are required to intervene only if there is evidence that the national bodies are not fulfilling their task of supervision satisfactorily . 13 Before considering the submissions put forward by the applicants it should be observed that the Commission has adopted a certain number of measures in relation to the management structures for the wine market . In particular it adopted Regulation No 2102/84 of 13 July 1984 on harvest production and stock declarations relating to wine-sector products ( Official Journal 1984, L 194, p . 1 ) and Regulation No 2396/84 of 20 August 1984 laying down detailed rules for drawing up the forward estimate in the wine-sector ( Official Journal 1984, L 224, p . 14 ). In addition the Commission procured certain changes to the distillation system by the adoption of Council Regulation No 2687/84 of 18 September 1984 ( Official Journal 1984, L 255, p . 1 ) amending Council Regulation No 2179/83 of 25 July 1983 laying down general rules for distillation operations involving wine and the by-products of wine-making ( Official Journal 1983, L 212, p . 1 ). 14 The applicants claim that the measures thus adopted in the wine sector are inappropriate in so far as they are likely to encourage the manufacture of artificial wines, especially in view of the lack of detailed chemical analysis of products delivered for distillation . 15 As the Commission observed, no link has been established between the system of distillation and the manufacture of adulterated wines . The toxic substances were discovered in wine intended for human consumption and not in wine delivered for distillation . 16 Moreover, the applicants observed at the hearing that only unadulterated wine was delivered for distillation and that adulterated wine came on to the market for human consumption . The applicants' argument that the distillation system absorbed all the natural wine and the manufacture of adulterated wine was necessary in order to satisfy consumption must be rejected, since there is a surplus of natural wine . 17 The same is true of the argument alleging insufficient analysis . Even assuming that adulterated wines were delivered for distillation it is sufficient to observe that pursuant to Article 27 of Council Regulation No 2179/83 it is for the Member States to take the necessary measures to check that the distillation system is properly applied . This checking of the characteristics of products delivered for distillation, which, pursuant to Article 22, relates in particular to quantity, colour and alcoholic strength, is sufficient to allow the competent authorities to oversee the Community system for distillation of wine and detect adulterated wines delivered for distillation . 18 The applicants also consider that the Commission ought to have been aware of the considerable increase in the quantity of wines delivered for distillation in 1984 and the stocks of Italian wines at the end of that year . 19 It did not necessarily follow from the increase in those quantities of wine that adulterated wine had come on to the market . As the Commission has pointed out, the large size of the harvest in 1983, mistaken estimates of consumption and inaccuracies in declarations of stocks played a significant part . 20 Finally, the applicants submit that the Commission ought the day after the press conference on 27 August 1985 to have taken steps to withdraw wines adulterated with diethylene glycol from the market, inform consumers of the scandal of adulterated wines and increase checking by the competent national authorities in their supervision of the Community system of distillation . 21 It must first of all be observed that the Commission has no power to withdraw adulterated from the market, that being a matter for the national authorities . 22 The Commission is under no obligation to publish the identity of traders who may be involved in scandals . The information system established to detect fraud and irregularities in the wine sector and to avert dangers which might arise from the use of consumable products leaves it to the national authorities to take steps to inform the consumer . 23 Furthermore, on 16 August 1985 the competent United Kingdom authorities gave the authorities of the other Member States information on Italian wine adulterated with diethylene glycol . When the Commission gave its press conference it was aware only of very slight traces of diethylene glycol in some Italian wines . It could therefore legitimately take the view that a reserved approach was preferable to the disclosure of the identity of the companies involved in trade in those wines, which would have led to adverse publicity even more damaging to sales of Italian wine . It must also be borne in mind that when on 26 March 1986 the applicants requested the Commission to disclose the names of the companies concerned Italian wine adulterated with methanol had already been the cause of several deaths . The Commission immediately passed on the information in relation to Italian wine adulterated with methanol which it received in March 1986 from the Italian authorities to the other Member States . 24 Finally, it must be held that even after the appearance in 1985 of Italian wine containing traces of diethylene glycol, the Commission had insufficient facts at its disposal to require a review of the Italian monitoring measures in relation to the distillation system . It should be added that inspection pursuant to Article 9 of Regulation No 729/70 of the Council of 21 April 1970 on the financing of the common agricultural policy ( Official Journal, English Special Edition 1970 ( I ), p . 218 ) would have related to the financing of distillation by the European Agricultural Guidance and Guarantee Fund and not, as the applicants argue, to the sale of wine on the market . 25 It follows from all the above considerations that the applicants have not succeeded in establishing unlawful conduct on the part of the Commission after the discovery of the scandal of Italian wines containing methanol . In consequence there is no need to determine whether the other conditions necessary in order to establish liability on the part of the Community are satisfied . 26 Accordingly the application must be dismissed as unfounded . Costs 27 Under Article 69 ( 2 ) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs . Since the applicants have failed in their submissions, they must be ordered to pay the costs . Mr Francesconi must bear the costs incurred in connection with his application to intervene in Case 66/88, which was rejected by order of 15 March 1989 . On those grounds, THE COURT ( Second Chamber ) hereby : ( 1 ) Dismisses the application; ( 2 ) Orders the applicants to pay the costs and orders Mr Francesconi to pay the costs incurred in connection with his application to intervene . © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII