SUMMARY
A winegrower may use the term ‘wine-growing estate’ in the labelling of his wine, even if the process of grape cultivation and grape pressing took place on the wine-growing estate of another winemaker, at the condition that the pressing process occurs under the supervision and responsibility of the former winemaker.
THE DISPUTE
With decision No. C-354/22, issued on November 23, 2023, the Court of Justice of the European Union (hereinafter “CJEU”) interpreted the second subparagraph of Article 54(1) of Commission Delegated Regulation (EU) 2019/33 of 17 October 2018 supplementing Regulation (EU) No 1308/2013 (‘Delegated Regulation 2019/33’) stating that “Those terms [i.e. those listed in Annex VI] shall only be used if the grapevine product is made exclusively from grapes harvested in vineyards exploited by that holding and the winemaking is entirely carried out on that holding’.
The decision originates from a dispute between the Land Rheinland-Pfalz (“the Land”) and a German winegrower from Zell, in the Moselle region (“the applicant”). The applicant produced wine from grapes coming not only from its own vineyards but also from other leased vineyards located approximately 70 km away from his wine-growing estate, which were also covered by the same protected designation of origin or protected geographical indication.
According to the lease agreement, the lessor cultivated the vines leased to the applicant in accordance with the latter’s instructions and, in addition, leased out a winepress facility, which was available exclusively to the lessee – for a period of 24 hours – for the processing of the grapes coming from the vineyards under lease, in accordance with the oenological practices of the winemaker lessee. The wine obtained was poured into vats then moved to the holding of the applicant. After that, the winemaker labeled such wine using the terms ‘Weingut’ (vineyard estate) and ‘Gutsabfüllung’ (Estate bottling). These terms fall under Article 54(1) of Delegated Regulation2019/33, read in conjunction with Annex VI thereto.
Under those circumstances, the Land took the view that the applicant could not use the indication “Weingut” and “Gutsabfüllung” for wine produced in the manner described above, because of i) the lack of autonomy of a permanent establishment and ii) the circumstance that the applicant did not employ its own personnel for the purpose of the wine-pressing operation.
Therefore, the applicant brought an action before the Verwaltungsgericht Trier (an administrative court) seeking a declaration that he was entitled to use those two indications. In the first instance, the administrative court upheld the action. However, the Land appealed the decision to the higher administrative court, which dismissed the action of the winemaker, arguing that the indications ‘Weingut’ and ‘Gutsabfüllung’ may be used only if the winemaking is entirely carried out in a holding which constitutes a single operational unit with a permanent establishment which is permanently used by the owner of the eponymous wine-growing holding and on which staff work under its management.
Then, the winemaker appealed the decision to the Federal Administrative Court, which subsequently submitted a question for a preliminary ruling to the CJEU.
While the Court of Justice did not question that the harvesting of the leased vineyards was carried out by the same eponymous wine-growing holding (since the vineyards under lease were exploited in accordance with the applicant’s requirements), it focused on the relevance of the separate grape pressing operation.
Based on the factual situation described above, the CJEU ruled that the second subparagraph of Article 54(1) of Commission Delegated Regulation (EU) 2019/33 must be interpreted as meaning that the pressing of grapes from leased vineyards taking place in a facility leased by the eponymous wine-growing holding for a short period from another wine-growing holding does not preclude the winemaking from being regarded as having been entirely carried out on the eponymous wine-growing holding; this at the condition that the pressing facility is exclusively at the disposal of the eponymous wine-growing holding for the period necessary for the pressing operation and that holding assumes actual management, close and continuous supervision and responsibility for that operation.
The Court arrived to this conclusion basing on the following arguments: i) ‘holding’ means ‘all the units used for agricultural activities and managed by a farmer situated within the territory of the same Member State’, pursuant to Article 4(1)(b) of Regulation No 1307/2013, independently from its ownership; ii) the term “managed” does not imply that the farmer has unlimited power over the area in question when using it for agricultural purposes; iii) in order to ensure that customers are not misled as to the identity of the persons responsible for the winemaking process, it is sufficient to ensure that the holding assumes actual management, close and continuous supervision and responsibility for the operation.
In the same vein, CJEU stated that the pressing can performed by employees of another winemaker, at the condition the winemaker (leasing the facility) effectively leads the pressing process, maintains close and continuous supervision, and assumes responsibility for that operation.
TAKEAWAY
While the CJEU decision provides clarity on the possibilities to separate stages of the winemaking, it also requires winemakers’ attention as to legal and factual organization.
In fact, when using protected designations or indications for grapes partially harvested and processed in other holding’s vineyards, winemakers shall carefully review lease agreements to ensure that formal and actual management, supervision and responsibility for processing operations is vested with the lessee.
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