Judgment;Abstract — ECLI:EU:C:2019:1125
Date: 2019-12-19
Language of the case: Italian
Court formation: Fourth Chamber
Subject matter: Right of establishment
Procedure: Reference for a preliminary ruling
Origin: Italy

Summary  C-465/18 — 1 
Case C-465/18 
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 July 2018 
Referring court:  
Consiglio di Stato (Italy) 
Date of the decision to refer:  
31 May 2018 
Appellants:  
AV 
BU 
Respondent:  
Comune di Bernareggio 
Intervener:  
CT 
  
Subject-matter of the main proceedings 
Appeal brought by the provisionally successful tenderers in a tendering procedure 
relating to the sale of a municipal pharmacy challenging the decision definitively 
awarding the contract to a pharmacist who is an employee of the pharmacy in 
question and who enjoys an unconditional statutory right of pre-emption. 
Subject-matter of and legal background to the request for a preliminary 
ruling 
The compatibility with European Union law and, in particular, with the principles 
of freedom of establishment, of non-discrimination, of the protection of 
competition and of equal treatment between economic operators, and with the 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-465/18 
 
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freedom to conduct a business and the freedom to pursue an occupation, of a law 
which, in the event of a tendering procedure relating to the sale of a municipal 
pharmacy to a private sector pharmacist, confers a right of pre-emption on 
pharmacists who are employees of the pharmacy in question, that is to say, an 
unconditional right to take precedence, in the award of the contract, over 
participating tenderers, without any obligation to participate in the tendering 
procedure, availing themselves of the terms proposed by the tenderer which has 
submitted the best offer and which, but for the exercise of the right of pre-
emption, would have been definitively awarded the contract. 
Article 267 TFEU 
Question referred for a preliminary ruling 
Do the principles of freedom of establishment, non-discrimination, equal 
treatment, the protection of competition and freedom of movement for workers, 
referred to in Articles 45, 49 to 56 and 106 TFEU and in Articles 15 and 16 of the 
Charter of Fundamental Rights of the European Union, and the requirements of 
proportionality and reasonableness inherent in those principles, preclude a 
provision of national law, such as Article 12(2) of Law No 362/1991, which, in 
the event of the transfer of ownership of a municipal pharmacy, confers a right of 
pre-emption on the employees of the pharmacy in question? 
Provisions of EU law relied on 
TFEU: Articles 45, 49 to 56, 106 and 168(7) 
Charter of Fundamental Rights of the European Union: Articles 15 and 16 
Directive 2005/36/EC of the European Parliament and of the Council of 
7 September 2005 on the recognition of professional qualifications, as amended 
by Directive 2013/55/EU 
Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws 
of the Member States relating to the safeguarding of employees’ rights in the 
event of transfers of undertakings, businesses or parts of undertakings or 
businesses 
Provisions of national law relied on 
Legge 2 aprile 1968, n. 475, Norme concernenti il servizio farmaceutico (Law 
No 475 of 2 April 1968 laying down provisions applicable to the provision of 
pharmaceutical services) 
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‒ Article 9: ‘Ownership of pharmacies which become vacant and of new 
pharmacies established following the review of the pianta organica (territorial 
grid) may be taken up as to 50% by the municipality …’; 
‒ Article 12: ‘... 2. A transfer may be made only to a registered pharmacist or to a 
pharmacist who has been found to have the requisite qualifications in a previous 
competition.’ 
Legge 8 novembre 1991, n. 362, Norme di riordino del settore farmaceutico (Law 
No 362 of 8 November 1991 relating to a reorganisation of the pharmaceutical 
sector) 
‒ Article 4: ‘1. The transfer of vacant pharmacies or newly established pharmacies 
that may be operated by private individuals shall be decided by means of a 
competition ... 2. Nationals of the Member States of the European Economic 
Community … whose names appear in the registers of professional pharmacists 
shall be eligible for participation in competitions as referred to in paragraph 1 …’. 
‒ Article 12(2): ‘In the event of a transfer of ownership of a municipal pharmacy, 
the employees thereof shall have a right of pre-emption …’. 
The Civil Code  
‒ Article 2112: ‘On the transfer of an undertaking, the employment relationship 
shall continue with the transferee and employees shall retain all rights under that 
relationship. … The transfer of the undertaking shall not in itself constitute 
grounds for dismissal. Employees whose working conditions are substantially 
altered in the three months following the transfer of an undertaking shall be 
entitled to take redundancy …’.  
The Constitution of the Italian Republic 
‒ Article 41, which enshrines the freedom to conduct a business 
‒ Article 32, which enshrines the right to health 
Succinct presentation of the facts and the procedure in the main proceedings 
1 By notice published on 31 January 2014, the Municipality of Bernareggio 
launched a tendering procedure for the sale of a municipal pharmacy, the sale to 
be determined by the highest offer price, starting from a basic contract value of 
EUR 580 000.00. 
2 In the invitation to tender, it was stipulated that the sale of the pharmacy to the 
provisionally successful tenderer was conditional on the non-exercise, by any of 
the pharmacists employed under contracts of indefinite duration by the body 
entrusted with the operation of municipal pharmacies, of the right of pre-emption 
provided for by Article 12(2) of Law No 362/1991. 
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3 On 11 March 2014, the municipality declared that the contract was to be 
provisionally awarded to AV and BU, the owners of a pharmacy located in 
another town, which had submitted the most economically advantageous tender.  
4 However, on completion of the tendering procedure, precedence was given to the 
tender submitted by CT, CT being a pharmacist employed by the body entrusted 
with the operation of the municipality’s pharmacies who, without having 
participated in the tendering procedure, had by letter of 27 March 2014 exercised 
his statutory right of pre-emption and had consequently obtained the final award. 
5 The final award to CT was challenged before the Tribunale amministrativo 
regionale (Regional Administrative Court) by AV and BU, which argued, amongst 
other things, that the right of pre-emption was inconsistent with EU law. 
6 The Regional Administrative Court having dismissed their claim, they brought an 
appeal before the referring court (the Consiglio di Stato), on the same grounds as 
those on which they had based their action at first instance. 
Principal arguments of the parties to the main proceedings 
7 AV and BU base their arguments on the premiss that the sale of municipal 
pharmacies to private individuals must, under national law, be effected by means 
of an open selection procedure and that it is therefore subject to the principles of 
free competition and equal treatment laid down in EU law. 
8 In a context such as this, the statutory right of pre-emption of employees of 
municipal pharmacies entails a significant advantage for those employees, in that 
they are able to beat the competitors in a tendering procedure without even 
participating in the procedure, adopting as their own the tender which, at the end 
of the competition, proved to be the best, and that they may do so simply by 
exercising their unconditional right to conclude the contract. This removes the 
incentive for tenderers to endeavour to submit tenders that are the most 
advantageous possible for the public authority and it thereby robs the competition 
of any effectiveness. 
9 The right of pre-emption at issue is not justified on any grounds relating to the 
public interest which could take precedence over the principles of competition and 
equal treatment. 
10 In particular, it cannot be justified by reference to the right to work of employees 
of municipal pharmacies, since Article 2112 of the Civil Code, which is derived 
from EU law (Directive 2001/23/EC in particular), guarantees the continuance of 
the employment relationship and the safeguarding of all of the rights of the 
employees of the business being transferred. Moreover, again in accordance with 
Article 2112 of the Civil Code, the transfer of a business to a third party does not 
constitute sufficient grounds for dismissal, and workers are ensured the option of 
terminating their employment contracts freely. 
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11 In addition, if the purpose of the right of pre-emption is to ensure that the 
experience gained by employees in the provision of pharmaceutical services is 
preserved, that end could be achieved by other means (such as a stipulation in the 
invitation to tender that an appropriate number of points will be awarded on the 
basis of experience), without making such a sacrifice in terms of competition and 
equal treatment. 
Succinct presentation of the reasons for the reference 
12 The referring court entirely agrees with the arguments put forward by the 
appellants AV and BU, in addition to which it sets out the following 
considerations. 
13 As a preliminary point, the operation of pharmacies is a cornerstone of the right to 
health, which the State must guarantee. As such, it constitutes both the 
performance of a public service and the exercise of the freedom to conduct a 
business. 
14 The fact that it is a public service means that it is necessary to ensure that all 
citizens may have access to and use pharmacies, and thus that pharmacies are 
distributed uniformly throughout the country. The fact that it is a business activity 
means that measures must be adopted which ensure that the service operates as 
efficiently as possible and as economically as possible, and that it is subject to EU 
legislation in the field (judgment of 19 May 2009, Joined Cases C-171/07 and 
C-172/07). 
15 Under Italian law, pharmacies may be owned by a municipality or by private 
pharmacists. The rules governing the relationship between the Italian national 
health service and pharmacies, both public and private, are laid down by 
agreements of three years’ duration, in accordance with national agreements. 
16 Italian law provides that ownership of pharmacies which become vacant and of 
new pharmacies is to be determined by competitive tendering and that 
municipalities are entitled to reserve up to 50% of them to themselves. The sale of 
municipal pharmacies, such as that which is the subject of the main proceedings, 
must also be effected by means of competitive tendering. 
17 The rule which provides for the opening up to competition, by means of a 
tendering procedure, which is connected with the entrepreneurial nature of activity 
as a pharmacist, may be subject to restrictions that are justified by public-interest 
requirements of a higher order. In this connection, the Court of Justice has 
confirmed that ‘overriding reasons in the public interest’ may justify certain 
restrictions on the freedom to provide services, albeit that measures implemented 
by the Member States which appear to pursue public-interest objectives but which 
are actually aimed at protecting the economic interests of a class of operators are 
contrary to EU law principles (judgments of 29 November 2007, Case C-393/05, 
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of 19 May 2009, Case C-531/06, of 24 March 2011, Case C-400/08, and of 
16 February 2012, Joined Cases C-72/10 and C-77/10). 
18 Against that background, the referring court examines the right of pre-emption at 
issue, which is laid down by law for the benefit of the employees of municipal 
pharmacies in the event of their sale to private operators. What is meant by a ‘pre-
emption’ is a right, acquired by law (a ‘statutory right of pre-emption’, as in the 
present case) or by private-law act, to be given preference over others, on the 
same terms as are offered by those others, in the conclusion of a given agreement. 
A statutory right of pre-emption confers a preferential right as regards the 
conclusion of an agreement on a given class of operators, although it must always 
be in pursuance, if only in an indirect fashion, of interests of a more general 
nature. 
19 The Court has held that the option of entrusting the operation of pharmacies to 
individuals with proven qualifications falls within the discretion of the Member 
States and that national provisions which introduce restrictions on the operation of 
pharmacies because of the special nature of the goods dispensed in them are not 
inconsistent with freedom of establishment or freedom to provide services. 
However, the cases which it was examining concerned restrictions that were 
justified by professional qualification requirements and the need to ensure the 
proper provision of the service in question (judgments of 10 March 2009, Case 
C-169/07, and of 19 May 2009, Joined Cases C-171/07 and C-172/07). 
20 In the event of the sale of a municipal pharmacy, the right of pre-emption which 
employees enjoy arises, according to national case-law, from the need to ensure 
that pharmacies are well run, inasmuch as it is a way of capitalising on the 
experience already gained by such employees (Consiglio di Stato, Fifth Chamber, 
5 October 2005, No 5329). 
21 Nevertheless, the referring court entertains doubts as to whether the right of pre-
emption is in fact justified by the existence of any genuinely significant overriding 
public interest. 
22 In so far as concerns the position of the employees of the pharmacy and the 
intended continuation of their employment relationships, on the one hand, and the 
capitalising on their professional experience, on the other, the referring court 
refers to the observations made by the appellants (see paragraphs 10 and 11 
above) and suggests that, from this perspective, the right of pre-emption appears 
to be excessive, given the objectives pursued. 
23 In any event, the referring court has doubts about the reasonableness and 
proportionality, with regard to the social objectives pursued, of a right of pre-
emption which is based solely on the fact of being an employee of a municipal 
pharmacy that is being sold. Indeed:  
(a) in a professional context in which a high level of qualification is required and 
in which pharmacies may be transferred only to pharmacists whose names appear 
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in the register of pharmacists who have the requisite qualifications to operate a 
pharmacy or who have at least two years’ professional experience, there are no 
valid reasons for ascribing greater value to the experience gained in any particular 
pharmacy; 
(b) the right of pre-emption under consideration confers an unconditional 
preference on the employee, with no account being taken of whether or not the 
pharmacy in question has actually been well run; 
(c) in order to enjoy the right of pre-emption it is sufficient to have worked as an 
‘employee’ of the pharmacy, which does not necessarily coincide with being the 
person responsible for the pharmacy’s operation. 
24 In the referring court’s view, it is therefore questionable whether the right of pre-
emption achieves a reasonable balance between the requirements of a free market, 
freedom to provide services and protecting the right to health. A provision such as 
that under consideration could be regarded as a protectionist policy which confers 
an unjustified advantage on a certain group of citizens over other Italian nationals 
and indeed nationals of other Member States. 
25 At the same time, the preference accorded by law to the employees of a municipal 
pharmacy amounts to a restriction of the freedom of establishment, one which 
discriminates against other parties hoping to be awarded the contract both from 
the same Member State and from other Member States. The Court of Justice has 
recognised that assessing the professional experience gained by citizens in the 
European Union differently and unreasonably, for the purposes of participation in 
competitions, constitutes an infringement of EU law, and of Article 45 TFEU in 
particular (judgment of 12 May 2005, Case C-278/03). 
26 Moreover, one may question the reasonableness and proportionality of the 
curtailment of the full expression of the principles of the protection of competition 
and of equal treatment among economic operators thus brought about, and of the 
restriction of the freedom to conduct a business and the freedom to pursue an 
occupation. That is particularly true if one considers that, in the pharmaceutical 
sector, the law recognises competition as a factor in determining access to 
ownership of pharmacies and, more generally, as a potential means of improving 
the quality of the service provided to users. 
27 Account must also be taken of the fact that the provision under consideration 
hinders the access by potential operators to a market that is already subject to 
quotas, one where the number of pharmacies is limited by a national plan for their 
distribution and where the opening of new pharmacies is subject to their being 
assigned on completion of an open competition and the subsequent issue of an 
authorisation to the successful tenderer. 
28 In addition, it does not even seem that the aim of the pre-emption under 
consideration is to protect health, inasmuch as it does not appear to be necessary 
to the attainment of the objective of ensuring that the provision of medicinal 
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products to the public is reliable and of good quality (on the subject of whether 
measures are necessary for attaining a public-interest objective, see the judgments 
of the Court of Justice of 10 March 2009, Case C-169/07, paragraph 44, and of 
19 May 2009, Joined Cases C-171/07 and C-172/07, paragraph 25). 
29 It is true that every Member State has the power to determine the degree of 
protection which it intends to afford public health and the way in which that 
degree of protection is to be achieved, and that, since that degree of protection 
may vary from one Member State to another, a margin of discretion must be 
allowed (judgment of the Court of Justice of 11 September 2008, Case C-141/07, 
paragraph 51). However, no Member State should go so far as to allow that 
discretion to render provisions of EU law nugatory, particularly those which relate 
to the fundamental freedoms governed by Articles 49 to 56 TFEU and 15 and 16 
of the Charter of Fundamental Rights. Moreover, the Member States’ discretion 
must be guided by objective, non-discriminatory criteria. 
30 Finally, in so far as concerns the relevance of the question referred to the Court for 
a preliminary ruling, the referring court observes that it is decisive for the 
purposes of the decision to be given in the main proceedings. Indeed, if the 
national provision which confers on pharmacy employees a right of pre-emption 
in the event of the sale of a pharmacy is found not to be consistent with EU law, 
the referring court will have to uphold the related ground of appeal and 
consequently annul the invitation to tender and the decision awarding the contract 
to CT and recognise the right of the appellants AV and BU to be awarded the 
contract to purchase the pharmacy. If the reverse is true, the referring court will 
have to confirm the tender documents and the award of the contract to purchase 
the pharmacy to CT. 
31 In addition, the referring court draws attention to the cross-border implications of 
the question referred, both because it touches upon fundamental rights which 
every EU citizen enjoys and because it concerns a common professional field in 
which all EU citizens who fulfil the necessary requirements and possess the 
requisite professional qualifications may compete. 
32 Competitions relating to pharmacies as referred to in Law No 362/1991, including 
that for the sale under consideration, are open to all EU citizens whose names 
appear in the registers of professional pharmacists. On this point, it should be 
borne in mind that, under Directive 36/2005/EC (transposed in Italy by Legislative 
Decree No 206/2007), the pharmaceutical profession is covered by ‘automatic 
recognition’, following the prior harmonisation of training courses in the Member 
States, and that, as a result of the amendments introduced by Directive 
2013/55/EU, the recognition procedure has been further simplified by means of 
the introduction of a European Professional Identity Card. 
33 Thus, in accordance with the case-law of the Court of Justice, national legislation 
such as that in issue here, which applies without distinction to Italian nationals and 
to nationals of other Member States, must be consistent with the provisions 
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relating to the fundamental freedoms established by the Treaty where it applies to 
situations connected with trade between the Member States and may therefore 
produce effects that are not limited to the Member State in question (it being far 
from inconceivable that nationals of other Member States will be interested in 
opening or taking over an Italian pharmacy) (judgments of 13 February 2014, 
Case C-367/12, of 1 June 2010, Joined Cases C-570/07 and C-571/07, 
paragraph 40 and the case-law cited, and of 5 December 2013, Joined Cases 
C-159/12 to C-161/12, paragraphs 25 and 26).