61982C0177
OPINION OF MR ADVOCATE GENERAL REISCHL
DELIVERED ON 30 JUNE 1983 (
1
)
Mr President,
Members of the Court,
Article 30 of the Netherlands Wet op de Accijns van Tabaksfabrikaten [Law on the Excise Duty on Tobacco Products] of 1964 provides that it shall be an offence to sell, offer for sale or supply tobacco products to persons other than resellers at prices lower than those appearing on the excise label. According to the official explanatory statement, the purpose of that provisions is to prevent any deviation from the minimum prices from affecting conditions of competition in the retail trade, in other words to protect specialized retailers.
The accused in the main proceedings, Kaveka de Meern BV, a self-service wholesale business, and its general manager are charged with contravening that provision. It was found that in November 1977 Kaveka offered for sale cigars, cigarettes and pipe tobacco at prices lower than those marked on the excise labels to persons other than resellers. Although only holders of a special pass are allowed into its stores, this may be obtained not only by resellers but also by persons who, like bulk buyers, use the goods which they purchase for business or trade purposes. Furthermore, Kaveka never checks whether purchases are made for the purpose of resale.
In their defence against the charge, which the Arrondissementsrechtbank in Utrecht does not doubt is in principle well founded, the accused relied inter alia on Community law. They take the view that Article 30 of the Netherlands Law of 1964 is not compatible with Article 30 of the EEC Treaty or with Article 85 thereof which they maintain must be read in conjunction with Article 5. They point out first that the concepts of “affecting trade between Member States” in the sense of Article 85 of the EEC Treaty and “restrictions” on trade in the sense of Article 30 of the Treaty largely coincide in case-law. Secondly they point out that Article 30 of the Netherlands Law, which they contend establishes collective resale price maintenance even for importers and fixes statutory minimum sale prices, clearly restricts trade between Member States for the purposes of the criteria laid down in case-law and does not therefore accord with Article 30 of the EEC Treaty.
In view of those arguments the Netherlands court dealing with the case first ordered an investigation into the Netherlands market in tobacco products by the Economic Control Department of the Ministry of Economic Affairs which stated in its report of 30 September 1981 that the excise-label prices were fixed by the domestic manufacturer and the importer who were bound by the relevant price regulations when determining the retail price. Under the Law it was indeed possible, the report stated, for the same product to be marketed by several importers at different prices. However, it had to be borne in mind that importers were either given exclusive sales rights or belonged to multinational undertakings and that it was in general significant, that most manufacturers and importers were parties to agreements on competition under private law. Finally, the report also pointed out that price elasticity in the demand for cigarettes was low and brand loyalty high which meant that price differences had little effect on the market.
The Arrondissementsrechtbank further took the view that in order to decide the cases before it it still needed an interpretation of the provisions of Community law upon which the accused relied. By judgments of 1 June 1982 it therefore stayed the proceedings and in both cases submitted the following identical questions for a preliminary ruling:
“1.
In several decisions on Article 30 of the EEC Treaty the Court of Justice has declared that any commercial provision adopted by the Member States which is capable of hindering intra-Community trade, directly or indirectly, actually or potentially, is to be considered a measure having an effect equivalent to quantitative restrictions. This formulation appears to come very close to what the Court has said with regard to the concept of ‘agreements... which may affect trade between Member States’within the meaning of Article 85 (1) of the EEC Treaty in Cases 56 and 58/64 (Consten and Grundig ν Commission [1966] ECR 299) and in Case 56/65 (Société Technique Minière ν Maschinenbau Ulm [1966] ECR 235), although the term used in those cases is ‘may affect’ trade between Member States whereas, for example, in the Dassonville judgment the term ‘hinder’is used. In a case where the national court has to judge whether a legal provision of a Member State which applies without distinction to imported and domestic products is a measure having equivalent effect within the meaning of Article 30 of the EEC Treaty, must it in its judgment take into account the case-law of the Court of Justice concerning Article 85 of the EEC Treaty and more particularly the interpretation given by the Court to the expression ‘may affect trade between Member States’, from which it is clear that the criteria bringing the case within the prohibition of Article 85 (1) are satisfied if it is established that a commercial provision is likely to deflect trade from its natural course, or must the national court give a more independent meaning to Article 30 of the EEC Treaty to the effect that such a legal provision only constitutes a restriction on trade and thus a measure having equivalent effect within the meaning of Article 30 if the court is able to find on the basis of the factual circumstances that the importation of goods from other Member States may be restricted by that legal provision?
2.
Must a legal provision of a Member State which applies without distinction to domestic and imported products also be regarded as a measure having equivalent effect within the meaning of Article 30 of the EEC Treaty where it is clear that that provision restricts imports into a Member State only to a very small degree and other possibilities remain for the marketing of products from other Member States?
3.
Must the national court in its inquiry into the restrictive effects on trade of a legal provision which applies without distinction to the importation of products from other Member States and the marketing of domestic products have regard solely to the effects of that legal provision or must it also take account of the fact that other restraints on trade exist on the relevant market as a result of the tax laws of the Member States and the differences between them?
4.
Does it make any difference to the reply to be given to the previous question if in the opinion of the national court the relevant legal provision has, taken by itself, no restrictive effect at all on trade?
5.
If, as a result of a legal provision of a Member State, a system of vertical price-fixing exists to which all the traders concerned are bound and departure from which constitutes an offence, can an individual who has infringed such a provision rely before the national courts upon the incompatibility of that national provisions with Article 5 (2), in conjunction with Article 85, of the EEC Treaty?”
My views on those questions, which apparently arise in similar proceedings brought against 17 other undertakings and persons, are as follows :
1.
The first question seeks to establish whether in examining with reference to Article 30 of the EEC Treaty national rules applying to domestic and imported products alike consideration must also be given to the case-law on Article 85 of the Treaty, in particular as regards the expression “may affect trade between Member States”, or whether Article 30 has its own independent meaning and comes into operation only if it is found that a system of rules is liable to restrict imports.
The accused in the main proceedings argue that it is unlikely that the Court construes Articles 30 and 85 of the EEC Treaty differently when applying the test of whether trade may be affected.
At first the Commission agreed. After pointing out that the aim of both provisions is to secure the free movement of goods and a unified market, in other words that the provisions are complementary, it advocated that where comparable adverse effects exist the provisions should be construed consistently, leaving, no room for lacunae, and, as regards the test of whether trade may be affected, applying the same criteria in both cases. At the hearing, however, it moved away from that view slightly: it then stated only that where State measures and agreements between undertakings relate to the same economic circumstances their effects must be analysed in the same way; but that the legal assessment was different and that the provisions in question had their own internal logic and must therefore be construed independently.
This view was also taken by the Netherlands Government. It clearly advocates that Articles 30 and 85 of the EEC Treaty should be construed independently of one another.
There is no doubt in my mind, either, that the question submitted to the Court can be answered only in the latter sense.
Admittedly an argument in favour of the opposite view may be derived from the judgment in Case 13/77 INNO ν ATAB, (
2
) which dealt with a similar provision of Belgian law, inasmuch as that judgment emphasized that a national measure which has the effect of facilitating the abuse of a dominant position capable of affecting trade between Member States will generally be incompatible with Articles 30 and 34 (paragraph 35). It should not be overlooked, however, that in another part of the judgment a definition is given in relation to Article 30 of the Treaty according to which the single market system excludes any national system of regulation hindering, directly or indirectly, actually or potentially, trade within the Community. Nor should it be overlooked that immediately afterwards it is stated with reference to Article 86 that the important point is whether trade between Member States is affected, which indicates the use of different criteria (“entraver”, “affecter”) (paragraphs 28 and 29).
Different formulations are to be found throughout the Court's case-law. For example, in the judgment in the Grundig and Consten case (
3
) it was held with reference to the test of whether trade may be affected, laid down in Article 85, that the important point is whether an agreement is capable of constituting a threat, either direct or indirect, actual or potential, to freedom of trade between Member States in a manner which might harm the attainment of the objectives of a single market between Member States ([1966] ECR 299, at p. 341). In the judgment in Case 56/65 (
4
) it was similarly held that it must be possible to see whether the realization of a single market between Member States might be impeded and whether an agreement might have an influence, direct or indirect, actual or potential, on the pattern of trade between Member States, which is in fact the case where the market between Member States is partitioned ([1966] ECR 235 at p. 249).
Similarly, it was held in Case 71/74 (
5
) that a clause which restricts the freedom to import is liable to interfere with the natural movement of trade in other directions and thus to affect trade between Member States ([1975] ECR 563, paragraphs 37 and 38 at p. 584). Finally, the judgment in the Fedetab case (
6
) also mentions in relation to Article 85 the likelihood that certain restrictions on competition may deflect trade from the course which it would otherwise have followed (paragraph 172) and the need to ascertain whether there is an influence, direct or indirect, actual or potential, on the pattern of trade between Member States which might impede the creation of a single market between Member States (paragraph 170). On the other hand, as regards the import restrictions with which Article 30 is concerned, it was at first held in Case 2/73 (
7
) that the provision covers all measures which amount to a total or partial restraint of imports as well as other encumbrances having the same effect (paragraph 7) but now the test constantly applied by the Court is whether a Member State's rules are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade (see, for example, the judgments in Case 190/73 van Haaster (
8
) and Case 8/74 Dassonville (
9
)).
We must also remember the important principle of interpretation that the function of a provision and the context in which it is set should both be taken into account. When this is done the conclusion is inescapable that the provisions of the Treaty with which we are here concerned have different aims, that of Article 85 being to maintain sound competition and that of Article 30 to remove the other quantitative restrictions on imports. On the other hand we must also remember that, although exceptions do exist in both cases (Articles 85 (3) and 36), they are clearly concerned with quite different types of cases.
Finally, the Court's case-law on national price-control measures, especially the fixing by the State of minimum prices or profit margins applying without distinction to both domestic and imported products, that is, throughout the territory of a Member State (see Case 82/77 (
10
)), is also relevant. If the criteria referred to in Article 85 were considered to apply to such measures, it could hardly be said that trade was not affected as it certainly could not be denied that an equivalent comprehensive agreement between undertakings had such an effect. It is significant, however, that in such cases the Court has held that, as far as Article 30 of the EEC Treaty is concerned, the measures do not in general involve any restriction on importing; and that the situation is different only in exceptional cases, namely where prices are fixed at a level which puts imported products at a disadvantage.
It must therefore be stated that the case-law on Article 85 is not of decisive significance for the purpose of the application of Article 30 of the EEC Treaty and that a national court which has to examine a system of rules with reference to the former provision can in principle only be referred to the constantly used formulae I have cited. Besides those formulae, reference may also be made to passages in the judgment in INNO ν A TAB (
11
) concerning a similar system of fixed prices applying in Belgium in which it was held that if prices are freely chosen by the manufacturer or importer and prescribed by national legislation, generally the effects must be described as being exclusively internal, but the possibility cannot be excluded that in certain cases such a system may be capable of affecting intra-Community trade (paragraphs 53 and 54). Moreover, as the present case is not one of price-control measures of the kind dealt with in the relevant case-law (see, for example, the judgments in Case 5/79 Buy (
12
) and Joined Cases 16 to 20/79 Danis (
13
)) but simply of the exclusion of price competition at the retail level, reference may also be made to the judgment in Case 286/81 Oosthoek (
14
) in which it was held that national rules restricting sales promotion schemes are a barrier to imports and may restrict their volume.
However, there is no need to examine in detail here the point discussed during the proceedings whether in fact, because price competition between traders who are themselves importers or find importers offering lower prices is practically insignificant, to concede genuine price competition between tobacco retailers might lead to an increase in demand for imported products and thus to an increase in imports, or whether this is unlikely because for ordinary retailers the margin is too low, even on imported products, for demand on a market characterized by brand loyalty and stagnation to be influenced by specific price reductions and because bigger, across-the-board reductions, such as might be made by department stores for example, would only shift sales to such traders to the disadvantage of the specialized retailers, without, however, having much effect on trade between Member States. In the final analysis it is a matter for the national court which has made the reference to examine the validity of such arguments.
Should the national court then decide that trade is indeed affected, then it should be added in conclusion that justification on the grounds entering into consideration in the case of Article 36 alone is not possible. Clearly those grounds do not include the considerations underlying the policy towards small and medium-scale businesses (protection of specialized retailers) on which the Netherlands Law is based. As far as fiscal control requirements are concerned, however, it has already been made clear in the judgment in INNO v ΛΤΑΒ (
15
) that such factors are relevant only in relation to a prohibition of selling products at prices above those marked on the excise labels whereas a prohibition of selling products at prices below those marked on the excise labels is not necessarily based on fiscal reasons (paragraphs 17 and 18).
2.
In its second question the national court then asks whether it is of importance for the application of Article 30 of the EEC Treaty that imports are restricted only to a very small degree.
The reason for that question is that the accused parties in the main proceedings argue that, as far as the question whether trade may be affected is concerned, the same criteria apply in the case of Article 30 and that of Article 85 except that, according to the Court's case-law, Article 85 has application only if there is an appreciable effect on trade (see the Fedetab judgment (
16
)).
Like the Commission I think that this question must be answered in the negative. On this point reference may be made to the Court's case-law on the prohibition of charges having an effect equivalent to customs duties, according to which, because exceptions to the prohibition must be construed narrowly, the prohibition applies even where there is only a small discriminatory effect equivalent to that of a customs duty (Joined Cases 52 and 55/65, (
17
) [1966] ECR at p. 170) and covers any pecuniary charge affecting goods by reason of their crossing the frontier (Case 2/73 (
18
) [1973] ECR at p. 879, paragraph 5). It thus becomes possible to recognize a criterion which has application throughout Title I of the Treaty (“Free movement of goods”). This view is supported not only by the very broad definition contained in the case-law on Article 30. It is also relevant that in the judgment in Case 190/73 van Haaster, (
19
) which related to national measures restricting production, the Court emphasized that the purpose of the prohibition of customs duties or charges having equivalent effect and of quantitative restrictions or measures having equivalent effect is to eliminate all obstacles to the freedom of intra-Community trade ([1974] ECR 1133, paragraph 9).
Moreover, another reason why a different test in relation to whether trade is affected would appear justified as regards Article 85 is not hard to find. Considerations relating to the contractual freedom of undertakings, which are after all those to whom the provisions of Article 85 apply, and to problems of the administration by the Commission of procedures for the investigation of restrictive practices, a field in which the Commission has important duties, are clearly important here. Such aspects are naturally of no consequence in the case of injunctions directed to the Member States which, according to the manner in which they are drafted, have direct effect.
3.
The third question seeks a clarification of the problem whether only the effects of the rules under investigation are relevant or whether regard must also be had to the fact that other restraints of trade exist on the relevant market as a result of the various tax laws of the Member States.
Here again reference may be made to the judgment in INNO ν ATAB. (
20
) In that judgment, as the Court will remember, it was stated that it is for each Member State to choose its own method of fiscal control over manufactured tobacco on sale in its territory and that because of the need to satisfy the demands of the rigorous and often complicated controls, which moreover differ from one Member State to another, the import and export of manufactured tobacco come up against inevitable obstacles (paragraphs 14 and 15). The Court also stated that when a system of fixed retail prices is examined in the light of Article 30 it must be established whether, account being taken of the fiscal obstacles affecting the sector of the products in question, such a system of fixed prices is in itself likely to hinder imports between Member States (paragraph 56).
From those passages the Commission deduces that in an inquiry such as that to be made in the main proceedings only obstacles compatible with the Treaty must be taken into account and not, on the other hand, all other possible obstacles. This does not seem convincing to me, however. I think, and in my Opinion in INNO v ATAB (
19
) I made this point (on which the Court has not hitherto clearly expressed any views) that all the obstacles to trade in tobacco products must indeed be established and only then must the question be put whether, assuming that all the measures which are incompatible with the Treaty did not exist, the system of fixed prices may still be said to affect trade. In doing this particular consideration must also be given, with regard to the tobacco market, to agreements between undertakings, for example granting an importer exclusive distribution rights, and to the administrative practice of not issuing different tax labels for one and the same brand of cigarettes which, in the Commission's opinion, is contrary to Article 5 of Directive 72/464/EEC (Official Journal, English Special Edition 1972, (L 303 31. 12. 1972, p. 1). It is in fact conceivable that if products may be imported by different importers each pursuing their own pricing policy or an importer may charge different prices for a single brand using different excise labels which must be affixed by the manufacturer, sufficient latitude exists for price competition in respect of a brand. It is also conceivable that in this way arrangements may be made for demand for certain products, especially imported products, to be increased, thus producing that effect on the volume of trade the lack of which in the absence of any price competition the Commission notes at the retail stage. The result might very well be, however, that the provisions requiring the prices on the excise-label to be charged have in themselves no effect on trade between Member States.
4.
The next question is then whether the third question must be answered differently if, in the opinion of the national court, the provision under investigation has, taken by itself, no restrictive effect on trade.
I must admit that, considering the entire context of the questions, the point of this question escapes me. In any case I feel that no further comments are necessary following my remarks on the third question. It seems to me particularly inappropriate to suggest, as was done during the proceedings, that the national court's opinion, which is clear from the way in which the fourth question is formulated, might possibly be wrong and that after an objective inquiry is made with the help of experts a different view might be arrived at. In the first place, it is undoubtedly a matter for the national court to make the necessary decision, applying the tests indicated by the Court of Justice. If one of the parties to the proceedings considers it wrong, that party is quite at liberty to take the matter to a higher court and seek to have the decision in question changed by the appropriate means.
5.
Finally, in view of the fifth question, we must also examine whether an individual who infringes a provisie n introducing a system of resale price-maintenance applying to all parties to a transaction may claim before the national court that the provision is incompatible with Article 5, read in conjunction with Article 85, of the EEC Treaty.
That question arises from the argument suggested by the accused in the main proceedings that, if Article 85 does not allow undertakings to create a comprehensive system of resale price maintenance in a Member State, it cannot be regarded as acceptable, either, for the same effect, amounting, as it were, to a compulsory restrictive practice, to be produced by national legislation.
The first point to be remembered here is that in its decisions on Article 5 the Court has held that the article imposes a general obligation on Member States, the specific content of which depends, in each particular case, on the provisions of the Treaty or on the rules which may be deduced from its general framework as the case may be (decision in Case 2/73 (
21
) [1973] ECR 878, paragraph 4). The Court has also held that, although Article 86 is directed at undertakings, the second paragraph of Article 5 of the. Treaty imposes a duty not to adopt or maintain in force any measure which might deprive Article 86 of its effectiveness; Member States are under the duty not to enact measures enabling private undertakings to escape the constraints imposed on them by Articles 85 to 94 of the Treaty (paragraphs 31 to 33 of the decision INNO ν ATAB (
22
)).
It is clear, however, that the view taken by the accused parties cannot be justified in this way; it is therefore not possible to accept that in a case such as this State measures must be judged by direct reference to Article 85 of the EEC Treaty. Apart from the statements in the decision in INNO ν ATAB, (
22
) this view is borne out not only by the fact that the case-law on national price rules under examination with reference to Article 30 of the EEC Treaty, would otherwise lose its meaning; reference may also be made to the judgment in Case 5/79, (
23
) concerning national price-freezing provisions in which it was clearly held that, since there was no agreement between undertakings, the provisions of Article 85 could not be applied to such provisions adopted by the State.
6.
The questions raised by the Arrondissementsrechtbank Utrecht may accordingly be answered as follows :
(a)
As far as concerns the question whether trade between Member States is restricted, Article 30 of the EEC Treaty has its own independent meaning. With regard to the effects mentioned, reference must not therefore be made to the case-law on Article 85. On the contrary, Article 30 comes into play only where it is found that national measures are capable of hindering imports between Member States, directly or indirectly, actually or potentially.
(b)
Article 30 has application even if imports are hindered to only a slight extent by national measures.
(c)
When a provision such as that under investigation in the main proceedings is examined it is also necessary to consider whether still other barriers to trade exist on the relevant market. In particular, it must be determined whether, after other measures incompatible with the common market have been eliminated, it may still be assumed that the rules in question have adverse effects on trade between Member States.
(d)
A national provision amounting to a resale price-maintenance system binding all the parties to a transaction must be judged only with reference to Article 30 and not to Article 85, read in conjunction with Article 5, of the EEC Treaty if there is no agreement between undertakings.
(
1
)	Translated from the German.
(
2
)	Judgment of 16. 11. 1977 in Case 13/77 GB-INNO-BM NV ν Vereniging van der Kleinhandelaars in Tabak (ATAB) [1977] ECR 2115.
(
3
)	Judgment of 13. 7. 1966 in Joined Cases 56 and 58/64 Etablissements Consten Sarl and Grundig-Verkaufs-GmbH ν Commission oļ the European Economie Community [1966] ECR 299.
(
4
)	Judgment of 30. 6. 1966 in Case 56/65 Sociélé Technique Minière ν Maschinenbau Ulm GmbH [19661 ECR 235.
(
5
)	Judgment of 15. 5. 1975 in Case 71/74 Nederlandse Vereniging voor Eruit en Groentenimporlbandel and Nederlandse Bond van Grossiers in Zuidvruchten en ander Geïmporteerd Friit “Erubo ” ν Commission of the European Communities [1975] ECR 563.
(
6
)	Judgment of 29. 10. 1980 in Joined Cases 209 to 215 and 218/78 Heinu van Landewylt Sàrl and Others ν Commission of the European Communities [1980] ECR 3125.
(
7
)	Judgment of 12. 7. 1973 in Case 2/73 Riseria Luigi Gettilo ν Ente Nazionale Risi [1973] ECR 865.
(
8
)	Judgment of 30. 10. 1974 in Case 190/73 Officer van Justitien J. W.J. van Haaster [1974] ECR 1123.
(
9
)	Judgment of 11. 7. 1974 in Case 8/74 Procureur du Roi ν Benoit and Gustave Dassonville [1974] ECR 837.
(
10
)	Judgment of 24. 1. 1978 in Case 82/77 Public Prosecutor of the Kingdom of the Netherlands ν Jacobus Philippus van Tïggele [1978] ECR 25.
(
11
)	Judgment of 16. 11. 1977 in Case 13/77 GB-INNO—BM NV v Vereniging van der Kleinhandelaars in Tabak (ATAB) [1977] ECR 2115.
(
12
)	Judgment of 18. 10. 1979 in Case 5/79 Procureur Général ν Hans Buys, Han Pesch, Yves Dullieux and Denkavit France Sari [1979] ECR 3203.
(
13
)	Judgment of 6. 11. 1979 in Joined Cases 16 to 20/79 Openbaar Ministerie ν Joseph Danis and Others [1979] ECR 3327.
(
14
)	Judgment of 15. 12. 1982 in Case 286/81 Openbaar Ministerie ν Oosthoek's Uitgeversmaatschappij [ECR] 4575.
(
15
)	Judgment of 16. 11. 1977 in Case 13/77 GB-INNO— BM NV ν Vereniging van der Kleinhandelsaars in Tabak (AΤΑΒ) [1977] ECR 2115.
(
16
)	Judgment of 29. 10. 1980 in Joined Cases 209 to 215 and 218/78 Heintz, van Landewyk Sarl and Others ν Commission oj the European Communities [19801 (ECR 3125.
(
17
)	Judgment of 16. 6. 1966 in Joined Cases 52 and 55/65 Federal Republic o/Germany ν Commission of the European Economic Community [1966] ECR 159.
(
18
)	Judgment of 12. 7. 1973 in Case 2/73 Riseria Luigi Gedda ν Ente Nazionale Risi [1973] ECK 865.
(
19
)	Judgment of 30. 10. 1974 ¡n Case 190/73 Officier van Justitie γ J. W.J. van Haaster [1974] ECR 1123.
(
20
)	Judgment of 16. 11. 1977 in Case 13/77 GB-INNO — BM NVv Vereniging van der Kleinhandelaars in Tabak (ATAB) [1977] ECR 2115.
(
21
)	Judgment of 12. 7. 1973 in Case 2/73 Riseria Luigi Gedda ν Ente Nazionale Risi [1973] ECR 865.
(
22
)	Judgment of 16. 11. 1977 in Case 13/77 GB-INNO-BM NV ν Vereniging van der Kleinhandelaars in Tabak (ATAB) [1977] ECR 2115.
(
23
)	Judgment of 18. 10. 1979 in Case 5/79 Procureur Général ν Hans Buys, Han Pesch, Yves Dullieux and Denkavit France Sàrl [1979] ECR 3203.