3.

The question of reverse discrimination The two national courts both ask an identical question, namely: ‘Is a legislative provision of a Member State which prohibits a retailer established in that State from selling a particular product to a consumer below a certain minimum price contrary to the prohibition of discrimination on grounds of nationality laid down in Article 7 of the EEC Treaty, where that prohibition applies (in all circumstances) to the national product, but not to the imported product?’ Edah maintains that the legislation at issue constitutes reverse discrimination to the detriment of Netherlands producers and that the pricing rules are therefore contrary to Article 7. The Nederlandse Bakkerij Stichting, the Netherlands Government and the Commission deny that that is the case. In my opinion too the legislation at issue does not constitute a breach of the principle prohibiting any discrimination on grounds of nationality contained in Article 7 of the Treaty, for two reasons: (a) The different rules for imported products and domestically produced products ‘are applicable not on the basis of the nationality of traders, but on the basis of their location’ (see the Court's judgments in Case 31/78 Bussone v Italian Ministry of Agriculture, [1978] ECR 2429, at p. 2445; Case 155/80 Oebel[1981] ECR 1993, at p. 2007). As the Court has stated on several occasions, in such cases there is no breach of the principle contained in Article 7. In this case a foreign baker established in the Netherlands must comply with the minimum price in just the same way as a baker of Netherlands nationality, and a Netherlands bread producer established in Germany who exports his bread to the Netherlands enjoys the more favourable treatment applied to imported products by the Netherlands legislation. (b) Secondly, Article 7 does not preclude Member States from laying down legislation affecting the competitiveness of the traders who are subject to it, provided that that legislation makes no distinction between them on grounds of nationality either directly or indirectly (see paragraph 8 of the decision in Oebel, cited above). The Netherlands Government would have been free to adopt solely the system of minimum prices applicable to domestically produced bread without laying down any rules at all as regards imported products. As far as Community law is concerned, the considerable competitive advantage which it would thereby have conferred on imported products would not have constituted unlawful discrimination to the detriment of its own nationals. A fortiori, the rules on imports subsequently introduced, which limit the competitive advantage enjoyed by imported products, do not constitute unlawful discrimination under Community law. The Member States remain free to introduce legislation imposing restrictions on their own producers even where less stringent provisions are applicable in the other Member States. At paragraph 9 in the decision in Oebel, the Court stated that ‘it cannot be held contrary to the principle of nondiscrimination to apply national legislation merely because other Member States allegedly apply less strict rules’. As the Court stated in Van Dam, ( 5 ) a fisheries case, ‘it cannot be held contrary to the principle of nondiscrimination to apply national legislation, the compatibility of which with Community law is moreover not contested, because other Member States allegedly apply less strict rules’ (at paragraph 10). The same principle was affirmed in Smit, ( 6 ) a transport case, at paragraph 27. Finally, at paragraph 23 of the decision in Jongeneel Kaas, ( 7 ) the Court states: ‘A Member State may legitimately pursue a policy based on quality in order to promote sales even if that policy exposes its producers to the risk of price competition from the producers of other Member States who are not bound by the same standards of quality’. I might also cite the Court's judgment in Peureux, ( 8 ) the operative part of which states: ‘Whether or not a domestic product — in particular certain potable spirits — is subject to a commercial monopoly, neither Article 37 nor Article 95 of the EEC Treaty prohibits a Member State from imposing on that domestic product internal taxation in excess of that imposed on similar products imported from other Member States’. It may be asked, however, whether the reverse discrimination in this case is unlawful because it does not arise from the difference between Netherlands legislation and the legislation of other Member States but from Netherlands legislation alone. In Smit, cited above, the Court stated: ‘The aim of Article 7 of the Treaty is to eliminate any discrimination on the ground of nationality resulting from the legislation or administrative practices of a given Member State rather than any disparity in the way in which undertakings of different Member States are treated as a result of differences between the legislation of the Member States, in the absence of a common transport policy’ (paragraph 27; emphasis added). In my view, however, even in that case the argument referred to at (a) above remains valid: there cannot be discrimination within the meaning of Article 7 if the difference of treatment is based, not on the nationality of the persons concerned, but on the location of the undertakings. On the other hand it is for the Netherlands courts to examine whether the legislation at issue is contrary to the principles of the Netherlands legal system. For the sake of completeness I would also point out that in my view the fact that the two sets of rules are contained in the legislation of a single Member State does not nevertheless mean this is one of those cases where it may be objected that there is no ‘factor linking them with any of the situations governed by Community law’. ( 9 ) I say this because the defendant in the main actions criticizes not only the provision in the Netherlands legislation dealing with products produced and sold in the Netherlands but the difference between that aspect of the Netherlands legislation and the rules which it lays down for imported products. Importation is unquestionably one of the ‘situations governed by Community law’. Another argument which is unacceptable in my view is that Article 7 of the EEC Treaty is not directly applicable. The judgments of the Court would appear to show the contrary. ( 10 ) I therefore propose that the Court reply in the negative to the second question submitted by the national courts only for the reasons given above at (a) and (b). Allow me, however, to make one final remark. Reverse discrimination is clearly impossible in the long run within a true common market, which must of necessity be based on the principle of equal treatment. Such discrimination must be eliminated by means of the harmonization of legislation. In the meantime it must be ensured that Article 30 is not interpreted in such a way as to confront a Member State with the dilemma of either practising reverse discrimination or abandoning the attempt to give practical effect to an objective which is legitimate in the general interest.