10 September, 2020

The designation “Teran” may be used on the labels of Croatian wines

On 9 September 2020, the General Court dismissed Slovenia’s action against the European Commission (“EC”) in case T-626/17. With its action Slovenia requested that the General Court annuls the Commission Delegated Regulation (EU) 2017/1353 of 19 May 2017 amending Regulation (EC) No 607/2009 as regards the wine grape varieties and their synonyms that may appear on wine labels (the “contested regulation”). Slovenia’s main arguments were that by adopting the contested regulation the Commission exceeded its powers, that the contested regulation interfered with acquired rights of Slovenia’s wine producers and that adoption of the mentioned regulation disproportionately interfered with their property rights.

The contested regulation was adopted on the basis of Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (“Regulation 1308/2013”).

Paragraph 3, Article 100 of Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (“Regulation 1308/2013”) stipulates: “Where the name of a wine grape variety contains or consists of a protected designation of origin or a protected geographical indication, that name shall not be used for the purposes of labelling agricultural products. In order to take into account existing labelling practices, the Commission shall be empowered to adopt delegated acts in accordance with Article 227 laying down exceptions from that rule.” On the basis of the afore-mentioned provision of Regulation 1308/2013, which applied from 1 January 2014 (meaning, after Croatia’s accession to the EU), the Commission adopted the contested regulation.

The General Court established that the Commission used the above-mentioned provision retroactively, but this has nevertheless not resulted in violation of European Union (“EU”) law. Before Regulation 1308/2013, a similar provision was included in its predecessor, which was in effect on the day of Croatia’s accession to the EU. None of the provisions stipulated any time limits for actions by the Commission. As before Croatia’s accession the Commission had no territorial jurisdiction and therefore could not adopt the contested regulation, the General Court decided that the Commission acted in accordance with the general scheme and the wording of the provisions concerned.

In relation to Slovenia’s claim that by giving retroactive effect to the contested regulation, the Commission breached the principles of legal certainty, the respect for acquired rights and the protection of legitimate expectations, the General Court recalled that the principle of legal certainty precludes retroactive effect being given to EU measures, except where the objective pursued by the contested measure requires it to be given retroactive effect and the legitimate expectations of the persons concerned are duly respected.

The General Court found that the contested regulation pursued an objective in the public interest as its purpose was to protect legal labelling practices existing in Croatia on 30 June 2013 and to resolve the conflict between those practices and the protection of the Slovenian protected designation of origin. Given the sensitive nature of the issue the Commission also legitimately attempted to find a negotiated solution between the two countries, but this was not successful. Additionally, the General Court held that the Commission did not give precise, unconditional and consistent assurances to Slovenian wine producers, which would entertain well-founded expectations that no derogation with retroactive effect would be granted to Croatia concerning the use of the name “Teran” on the labels of wines produced on its territory. According to the General Court, Slovenia had not established that the extent and details of the retroactive effect of the contested regulation had infringed the legitimate expectations of Slovenian wine producers.

The General Court dismissed the afore-mentioned and other arguments of the Slovenian side as unfounded.

With its dismissal of Slovenia’s action, the General Court therefore decided that the contested regulation was adopted in accordance with the EU law. By doing so, it also confirmed that the name “Teran”, which is a protected designation of origin of Slovenian wines, may be used to refer to a wine grape variety on the labels of wines produced in Croatia. However, in accordance with the EU law the afore-mentioned name may only be used for the designation of origin “Hrvatska Istra” and only if “Hrvatska Istra” and “Teran” appear in the same visual field and if the font size of the name ‘Teran’ is smaller.

Slovenia may bring an appeal on points of law against the General Court’s decision before the Court of Justice, so perhaps the story of the use of “Teran” is not yet finished.

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