Abstract;Judgment — ECLI:EU:C:2024:886
Date: 2024-10-17
Language of the case: Italian
Court formation: First Chamber
Subject matter: Competition;Agreements, decisions and concerted practices;Right of establishment;Internal market - Principles;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: Italy

Summary C-16/23 – 1 
Case C-16/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
16 January 2023 
Referring court:  
Tribunale Amministrativo Regionale della Liguria (Italy) 
Date of the decision to refer:  
22 December 2022 
Appellant:  
FA.RO. di YK & C. Sas 
Respondent:  
Agenzia delle Dogane e dei Monopoli 
  
Subject matter of the main proceedings 
Appeal brought before the Tribunale Amministrativo Regionale della Liguria 
(Regional Administrative Court, Liguria) by the company FA.RO. di YK & C. 
s.a.s., the ‘appellant’), seeking the annulment (i) of memorandum No 6401/RU of 
31 March 2022 of the Agenzia delle Dogane e dei Monopoli (Customs and 
Monopolies Agency, ‘the Agency’), outlining the six-month plan for establishing 
new ordinary tobacco retail stores in Liguria, published on 6 April 2022, and (ii) 
of any other associated legal document. 
Subject matter and legal basis of the request 
Compatibility of Article 2 of Decreto Ministeriale n. 38/2013 (Ministerial Decree 
No 38/2013), as amended by Decreto Ministeriale n. 51 del 2021 (Ministerial 
Decree No 51 of 2021), and of Article 24(42) of decreto-legge 6 luglio 2011, n. 98 
(Decree-Law No 98 of 6 July 2011), converted into 1egge 15 luglio 2011, n. 111 
(Law No 111 of 15 July 2011), as amended by Article 4 of legge 3 maggio 2019, 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-16/23 
 
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n. 37 (Law No 37 of 3 May 2019), with Article 15(2) and (3) of Directive 
2006/123/EC and Articles 49, 56 and 106(2) TFEU. 
Questions referred for a preliminary ruling  
‘1. Must Article 15 of Directive 2006/123/EC of the European Parliament and of 
the Council of 12 December 2006 on services in the internal market and 
Articles 49, 56 and 106(2) TFEU be interpreted as precluding national legislation, 
such as that at issue in the main proceedings, which imposes restrictions on the 
authorisation of tobacco product outlets according to a minimum geographical 
distance between providers and according to the resident population? 
2. Must Article 15 of Directive 2006/123/EC of the European Parliament and of 
the Council of 12 December 2006 on services in the internal market and 
Articles 49, 56 and 106(2) TFEU be interpreted as precluding national legislation, 
such as that at issue in the main proceedings, which makes the authorisation of 
tobacco product outlets subject to compliance with pre-established criteria relating 
to the minimum geographical distance between suppliers and to the resident 
population, without allowing the competent public authority to assess other 
objective factual circumstances that demonstrate, even where the above-
mentioned conditions are not satisfied[,] a need for a service in the case at issue?’ 
Provisions of European Union law relied on 
Article 15(2) and (3) of Directive 2006/123/EC of the European Parliament and of 
the Council of 12 December 2006 on services in the internal market 
Directive 2014/40/EU – in particular, recital 59 thereof 
Articles 49, 56 and 106(2) TFEU 
Provisions of national law relied on 
Legge 22 dicembre 1957, n. 1293 (Law No 1293 of 22 December 1957) (in 
particular, Article 16 et seq. and Article 21(1)) 
Article 24(42) of Decree-Law No 98 of 6 July 2011, converted into Law No 111 
of 15 July 2011, as amended by Article 4 of Law No 37 of 3 May 2019 – in 
particular, point (b) thereof 
Decreto del Ministro dell’Economia e delle Finanze 21 febbraio 2013, n. 38 
(Decree No 38 of the Minister for the Economy and Finance of 21 February 
2013), as amended by decreto del Ministro dell’Economia e delle Finanze 12 
febbraio 2021, n. 51 (Decree No 51 of the Minister for the Economy and Finance 
of 12 February 2021) – in particular, Articles 2 and 3 thereof 
FA.RO. DI YK & C. 
 
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1 In particular, the legal framework may be outlined as set out below. 
2 Under Article 16 et seq. of Law No 1293 of 1957, monopoly goods, including 
manufactured tobacco products, are marketed through ordinary and special ‘retail 
stores’ and through ‘temporary licences’. 
Ordinary retail stores are establishments specifically dedicated to the sale of 
tobacco products and other monopoly goods, located on the public highway and 
licensed to individuals for a maximum of nine years (these are ordinary 
tobacconists’ shops). 
Special retail stores are established to meet specific needs of the service in 
specific places (railway stations and sea terminals, airports, motorway services, 
shopping centres, and so forth), by means of a licence usually granted to private 
parties, by private negotiation, for a period not exceeding nine years. 
Lastly, the administration may grant authorisation to sell monopoly goods in 
public establishments through a temporary additional licence (‘temporary 
licence’); in that event, holders obtain their supplies from the nearest ordinary 
retail store. 
Temporary licences must be justified by the need to provide the service in places 
and at times where ordinary retail stores cannot provide it. A temporary licence 
cannot be issued where a vending machine selling manufactured tobacco products 
is installed at the nearest retail store at a distance that is less than the pre-
established limits. 
3 The decision to establish an ordinary retail store is a matter for the Agency’s 
regional offices. Under Article 21(1) of Law No 1293 of 1957, they must exercise 
that power having regard to the ‘interest in the service’ criterion/guideline. 
However, the administration currently has very limited discretion, in so far as it is 
constrained ‘upstream’ by the legislation introduced under Article 24(42) of 
Decree-Law No 98 of 2011, converted into Law No 111 of 2011, and Article 4 of 
Law No 37 of 2019. 
Specifically, by means of Article 24(42) the legislature made the Minister for the 
Economy and Finance responsible for issuing an appropriate decree laying down 
rules for the establishment of retail stores selling monopoly goods and the issue of 
temporary licences ‘in order to balance, in compliance with the protection of 
competition, the requirement to ensure that users have access to a sales network 
widely distributed across the territory and the overriding public interest of health 
protection, consisting in preventing and controlling any supply of tobacco to the 
public that is not justified by the actual demand for tobacco’. 
In particular, Article 24(42)(b) of Decree-Law No 98 of 2011, as amended by 
Article 4 of Law No 37 of 2019, provided that ordinary retail stores may be 
established ‘only if certain conditions are met, namely a distance of not less than 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-16/23 
 
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200 metres and, in respect of population, a ratio of one retail store for every 1 500 
residents’. 
Pursuant to the above-mentioned Article 24(42), Ministerial Decree No 38 of 
2013 was adopted, laying down, inter alia, the minimum criteria designed to 
prevent an excessive concentration of tobacconists’ shops and hence an excess 
supply of products for smoking. Following the amendments introduced by 
Ministerial Decree No 51 of 2021, Article 2 of Ministerial Decree No 38 of 2013 
lays down the following parameters: 
1. minimum distance from the nearest retail store: 
(a) 300 metres in municipalities with 30 000 residents or fewer; 
(b) 250 metres in municipalities with between 30 001 and 100 000 residents; 
(c) 200 metres in municipalities with more than 100 000 residents; 
2. ratio of one retail store for every 1 500 residents in the municipality; it is 
possible to derogate from this ratio only for municipalities with fewer than 1 500 
residents. 
The parameter relating to the ratio between retail stores and resident population 
was introduced by Law No 37 of 2019 and by Ministerial Decree No 51 of 2021, 
replacing the minimum productivity requirement laid down by the original texts of 
Decree-Law No 98 of 2011 and Ministerial Decree No 38 of 2013. Indeed, the 
previous requirement had been criticised by the European Commission in EU-
Pilot Case 8002/15/GROW as contrary to Article 14(1)(5) of Directive 
2006/123/EC (which prohibits making the authorisation of a service activity 
subject, inter alia, to the assessment of the profitability of the undertaking). 
Lastly, Article 3 of Ministerial Decree No 38 of 2013 provides the Agency with 
other criteria, namely: 
- the need to take particular account of areas characterised by new housing or 
commercial developments, and so forth, that might make it clear that there is an 
interest in the service; 
- the need for the sales network for manufactured tobacco products to be in 
line with interest in the service and organised in such a way as to ensure the 
efficiency and effectiveness of controls by the administration, in order to protect 
minors, public order and public safety, public health and the revenue from tax on 
monopoly goods. 
Ordinary retail stores are established by means of a plan drawn up for that purpose 
that is adopted every six months by the relevant regional office of the Agency, 
following the conduct of a procedure providing, inter alia, for prior publication of 
FA.RO. DI YK & C. 
 
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a draft provisional plan and for the submission of observations by interested 
parties.  
For the allocation of newly established ordinary retail stores the legislation sets 
out the following arrangements: in municipalities with up to 30 000 residents, the 
administration launches a competition solely for particular categories of persons 
(refugees who previously held a similar licence in their territories of origin, war 
invalids, persons treated as such); in municipalities with a population of more than 
30 000 residents and in the main towns of their province, licences are awarded by 
means of a public tendering procedure open to all candidates. 
Succinct presentation of the facts and procedure in the main proceedings 
4 The applicant has for many years been the owner of a temporary licence for the 
retail sale of tobacco products at the ‘Bar Rino’ commercial establishment. 
5 The Agency initiated the procedure for the removal of the above-mentioned 
temporary licence, since the main tobacconist – to which the applicant’s 
temporary licence is linked – located less than 300 metres away, installed a 
cigarette vending machine in May 2021. Under the legislation in force, this 
prevents the temporary licence from being maintained. 
6 YK, the legal representative of FA.RO., then notified the administration of the 
need to establish a new ordinary retail store at the ‘Bar Rino’, setting out a series 
of facts indicating that large numbers of consumers were present. 
7 However, the Agency closed the applicant’s notification because it found that the 
requirements relating to distance and the ratio between retail stores and residents 
of the current legislation had not been met.  
8 By its appeal before the Regional Administrative Court of Liguria, the appellant 
challenged the draft plan and the subsequent final plan, as regards the second half 
of 2022, for the establishment of new ordinary retail stores for monopoly goods in 
Liguria, in so far as it did not provide for a new sales outlet at the appellant’s 
commercial establishment. 
The essential arguments of the parties in the main proceedings 
9 The appellant submits that the administration should not have automatically 
applied the parameters laid down by the national legislation, but should have 
examined the necessity and proportionality of the restrictions on free access to the 
market in services.  
10 According to the appellant, the establishment of a new retail store at the ‘Bar 
Rino’ would not result in over-supply in relation to demand because, as the area in 
question is a tourist destination, the number of actual users of the service would be 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-16/23 
 
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much greater than the number of residents, owing to the enormous influx of 
tourists at weekends and during the tourist season. 
11 The Agency requested that the appeal be dismissed. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
12 The referring court considers that Directive 2006/123/EC, which establishes 
general provisions facilitating the exercise of the freedom of establishment for 
service providers as referred to in Article 49 TFEU, as well as the free movement 
of services referred to in Article 56 TFEU (Article 1(1) of Directive 
2006/123/EC), is applicable. 
13 Although Directive 2006/123/EC does not deal with the abolition of monopolies 
providing services (Article 1(3) of Directive 2006/123/EC), Article 106(2) TFEU 
provides that undertakings having the character of a revenue-producing monopoly 
are to be subject to the rules contained in the Treaties, in particular to the rules on 
competition, in so far as the application of such rules does not obstruct the 
performance, in law or in fact, of the particular tasks assigned to them. 
14 In addition, the applicability of Directive 2006/123/EC was affirmed by the 
European Commission, both in the letter of 5 October 2015 opening the above-
mentioned EU Pilot case 8002/15/GROW and in the notification of negative 
closure of the pre-litigation procedure. 
15 The referring court does not call into question the legality of the authorisation 
system provided for in Article 9 of Directive 2006/123/EC for the sale to the 
public of monopoly goods, and, in particular, tobacco products. The Italian 
legislature’s decision not to liberalise services for the marketing of tobacco 
products does not appear to be open to criticism, since the authorisation system is 
justified by overriding reasons of public interest. National case-law takes the 
approach that tobacco retail stores are not to be equated with ordinary 
undertakings engaged in economic activities that may be fully liberalised. This is 
because, on the one hand, they stem from a public monopoly aimed at generating 
tax revenue, and, on the other hand, they work together to provide a service 
involving sensitive interests of the community: there is, therefore, a need to ensure 
that the sales network is properly structured, enabling the administration to 
exercise effective control in order to protect public finances and human health (see 
also judgment of the Court of Justice of 14 December 1995, C-387/93, Banchero, 
which, albeit prior to the ‘Services’ Directive, held that the provisions of the EEC 
Treaty do not preclude national legislation, such as that in force in Italy, which 
reserves the retail sale of manufactured tobacco products to distributors who have 
been authorised by the State). 
16 Article 15(2) of Directive 2006/123/EC allows Member States to make access to a 
service activity or the exercise thereof subject to certain requirements, including 
(a) quantitative or territorial restrictions, in particular in the form of limits fixed 
FA.RO. DI YK & C. 
 
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according to population or a minimum geographical distance between providers. 
Paragraph 3 of Article 15 provides that such restrictions – which infringe 
fundamental freedoms – are legitimate if, in addition to not being discriminatory, 
they are necessary, that is to say, justified by an overriding reason relating to the 
public interest, and proportionate, that is to say, they are suitable for ensuring the 
attainment of the objective pursued without going beyond what is necessary to 
attain it and if they cannot be replaced by less restrictive measures that would 
attain the same result. 
17 The distance and population criteria laid down in the current Italian legislation 
constitute territorial and quantitative restrictions of the type referred to in 
Article 15(2)(a) of Directive 2006/123/EC. 
18 They are restrictions affecting the fundamental rights and freedoms guaranteed by 
Articles 49, 56 and 106(2) TFEU, as is also apparent from Directive 2014/40/EU. 
Although that directive does not contain rules on the establishment of national 
sales outlets, recital 59 thereof sets out the general principle that the rules on 
tobacco products must ‘not only guarantee a high level of health and consumer 
protection, but also protect all other fundamental rights and [be] proportionate 
with respect to the smooth functioning of the internal market’. 
19 According to the referring court, the outcome of the dispute depends on whether 
the parameters of distance and the ratio between retail stores and resident 
population, laid down by the national rules for the issue of permits, are compatible 
with Article 15(3) of Directive 2006/123/EC, from the point of view of both 
necessity and proportionality. 
20 As regards necessity, the overriding reason which led the legislature to impose 
restrictions is the protection of human health from the risks arising from tobacco 
products, as is apparent from the wording of Article 24(42) of Decree-Law 
No 98/2011 and as the Agency stated in its response to the European Commission 
in Case EU-Pilot 8002/15/GROW, in which the WHO Framework Convention on 
Tobacco Control is referred to. 
21 According to the referring court, it is questionable whether the current restrictions 
are necessary to protect collective health, as, for various reasons, they do not 
really appear likely to discourage the consumption of tobacco products. 
22 First of all, the increasing number of vending machines (which may be installed 
by the owners of authorised retail stores) means that, in the current situation, 
cigarettes are in fact always available to consumers at any time of day or night. In 
addition, in order for the reduction in sales outlets in an area to have a deterrent 
effect, the minimum distances between tobacconists would have to be measured in 
kilometres, not metres. 
23 The referring court points out that the measures recommended for reducing the 
supply and demand for tobacco in the World Health Organisation’s Framework 
Convention on Tobacco Control do not include setting restrictions affecting 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-16/23 
 
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sellers. On the other hand, that convention points to other tools as being useful and 
effective in curbing tobacco consumption. In terms of reducing demand, these 
include fiscal measures, banning smoking in a wide range of places, 
communicating information to the public on the toxic ingredients of tobacco 
products, and so forth. Supply reduction steps include measures to combat illegal 
trade, the prohibition of sale to minors, the prohibition on selling cigarettes singly 
or in small packets, and so forth.  
24 As regards proportionality, the restrictions laid down by the Italian legislation, 
even if considered necessary, could prove excessive in relation to what is 
necessary to attain the objective of health protection through a balanced 
equilibrium between supply and demand, on account of their rigidity (minimum 
distance) and the link to data taken purely from the registry records (resident 
population). 
25 According to the referring court, in order to comply with the principle of 
proportionality, the Agency should be able to take into consideration possible 
objective circumstances indicating that even in cases where the distance and 
population limits are not met in an area, establishing a new ordinary retail store 
would meet a need for services and therefore would not specifically lead to an 
over-supply: that is precisely the situation in the present case, where there would 
actually be many more service users than is apparent from the registry data, since 
the municipality has a high level of tourism. 
26 Thus, according to the referring court, the appellant’s application for the 
establishment of a new sales outlet for manufactured tobacco products was 
rejected by the Agency on the ground that it failed to comply with the parameters 
laid down in abstracto by the rules. In that court’s view, the Agency did not assess 
the evidence provided by the appellant specifically showing how marketing such 
products in its establishment would not stimulate demand but would, on the 
contrary, meet an existing and significant demand for service.