STA, 9 September 2020 - Slovenia has lost another case targeting its neighbour as the General Court of the EU dismissed its appeal to annul the European Commission's delegated regulation that allows Croatian wine producers to use Teran, the name of a red wine protected by Slovenia, on their wine labels. The decision was met with frustration and blame game at home.
Under the derogation granted to Croatia in 2017, the designation Teran may be used to refer to a wine grape variety on the labels of wines produced in Croatia, but only for the designation of origin Hrvatska Istra and on condition that Hrvatska Istra and Teran appear in the same visual field and that the font size of the name Teran is smaller than that of the words Hrvatska Istra.
Slovenia had Teran, a red wine traditionally produced from the Refosk grape grown in the region of Kras, recognised as a protected designation of origin (PDO) in 2006.
In challenging the regulation, Slovenia raised its retroactive effect, alleging infringement of the second subparagraph of Article 100 (3) of Regulation No 1308/2013, which is the legal basis of the contested regulation, and infringement of the principles of legal certainty and the protection of legitimate expectations.
The third paragraph of Article 100 reads: "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."
The second subparagraph says: "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."
The court found that the Commission had indeed applied the subparagraph concerned retroactively - it took effect on 1 January 2014 - but said the regulation pursued an objective in the public interest, which made it necessary for it to be given retroactive effect.
It said the objective pursued by the contested regulation was "to protect legal labelling practices existing in Croatia on 30 June 2013" when the country joined the EU, and "resolve the conflict between those practices and the protection of the Slovenian PDO Teran".
The court also held that Slovenia failed to prove the Commission failed to have regard to the principles of legal certainty, the respect for acquired rights and the protection of legitimate expectations by giving retroactive effect to the contested regulation.
The court fully upheld the Commission's arguments that Teran was also a grape variety in Croatia so the exception was possible under EU rules to use the name without affecting Slovenian Teran wine producers, who preserve exclusive PDO rights.
The row over Teran goes back to spring 2013 when Slovenia removed Croatian wine carrying Teran labels from its store shelves. Croatia protested, calling for a joint cross-border protection of Teran, which Slovenia said was not possible because of different agroclimatic conditions in which the grapes are grown and wine produced.
Despite the ruling, the row may not be over yet, as General Court judgements may be appealed at the Court of Justice of the EU. Slovenia has two months to appeal, but it is not clear yet whether it will, with those responsible saying they would first need to examine the judgement before deciding on further steps.
Wine growers from Kras who produce Teran believe the government should appeal and will seek a meeting with PM Janez Janša to explain to him how they are affected by the judgement.
Agriculture Minister Aleksandra Pivec said the judgement would cause damage to Slovenian Teran producers with concerns that Croatian Teran could flood the Slovenian market, but also said the judgement needed to be respected.
Slovenian officials were quick to engage in a blame gave over who is responsible for the outcome, the second such after Slovenia lost its case against Croatia over its failure to implement the border arbitration award.
Foreign Minister Anže Logar criticised the Slovenian diplomatic service for "falling asleep", failing to react promptly on time in the preliminary procedure.
Announcing a debate in parliament on the matter and an examination of all activities pertaining to it, Logar raised the issue of "responsibility of those who opted for the legal action we lost".
"Let's remember another suit that we've lost. Lost suits certainly do not testify to active and confident foreign policy action that would improve the position, influence and reputation of foreign policy, rather the opposite," he said.
However, Dejan Židan, who served as agriculture minister at the time of crucial developments between 2010 and 2018, and who championed the idea to challenge the derogation in court, dismissed the allegation against him saying he was "proud" of action to protect Teran.
Returning the ball to the incumbent government, the Social Democrat said the government of the time had little chance to communicate within the European People's Party that key decision-makers came from, asserting that had Germany or Italy been in Slovenia's place the Commission "would never have adopted such a delegated regulation".
Similar frustration was expressed by Teran growers and experts involved in the case, who argued that Slovenia's arguments were sound, but the problem was politics and a lack of unity in Slovenia.
Regretting the development, parliamentary parties argued that experts should decide whether Slovenia should appeal against the General Court's decision. Many were critical of Židan, as well as a lack of unity among Slovenian political representatives.
Meanwhile, the Commission responded by saying that both Slovenian and Croatian wine producers can continue producing and selling their wines.
"The delegated regulation allows Croatian wine producers that had traditionally produced wine with Teran grape variety to continue labelling the wine with this name. However, it also introduces three conditions restricting the scope of the derogation and avoiding any sort of confusion between this wine and the Slovenian PDO wine Teran, reads a release from the Commission.