4.

In this respect we must not lose sight of a fundamental aspect: apart from its revenue rôle to which I shall return it is clear that the French monopoly in alcohol “has rules which are designed to make it easier to dispose of agricultural products” within the meaning of Article 37 (4). Within the limits of certain quotas it continues to be obliged to buy agricultural ethyl alcohol, to ensure its disposal and price in order to guarantee a certain standard of living to the producers. On 22 December 1969 the Commission considered “that it would be impossible to separate the final adjustment of the monopoly from the establishment of the common organization provided for ethyl alcohol of agricultural origin”. In reply to a written parliamentary question the Commission stated again on 28 April 1971 that “the final adjustment of the French and German monopolies in alcohol depends on the establishment of a common organization of the markets in ethyl alcohol of agricultural origin”. I entirely share this point of view. There is no need to remind the Court that the common organization in question has still not seen the light of day and that the French system for alcohol has certainly not yet been adjusted so as no longer to have the character of a State agricultural organization with support measures for export which it has. As evidence we need nothing more than the decisions of the Commission authorizing the levying of a duty intended to compensate for the disadvantage in competition suffered by the similar products of other Member States by reason of the national rules having an effect to a national organization of the market as constituted by the French monopoly. In Commission Regulation No 1407/78 of 26 June 1978 the Commission states that “the difference between prices on the French market and those on the markets of [Germany, Belgium, Luxembourg and the Netherlands] results in particular from the pricing system applied by the French authorities, which consists in selling agricultural alcohol for export at an average price markedly lower than that at which the same alcohol is sold for consumption on the domestic market; whereas, however, as a result of recent changes in French policy this price system does not apply to alcohol left on the producers request at their free disposal”. It then recites that ‘the Council has not given a ruling under Article 42 of the Treaty on the applicability to ethyl alcohol of agricultural origin … of the provisions of the treaty relating to State aids’, which at best will be effectively done only in the body of the regulation on the common organization of the markets for this product and that ‘if France maintains its aid for exports of alcohol the ensuing difficulties can be alleviated only by fixing, under Article 46 of the Treaty, a charge on French exports, in order to restore market equilibrium’. I also think that the price difference which the Commission mentions results from the French system for alcohol as a whole, a system which according to the Commission ought to have been ‘neutral’ since 1 January 1970, 1 April 1974 or 29 July 1977. With all due respect however to the Commission and its argument I do not think that to authorize the levying of a compensatory charge constitutes a sufficient remed for this situation. If it were correct, as the Commission maintains, that the obstacles or discrimination constituted by the French system for alcohol have been directly contrary to the provisions of Articles 30 to 34 and 95 of the Treaty since 1 January 1970, 1 April 1974 or 29 July 1977, Article 46 would no longer have applied since one of these three dates. Such at least until now has been the opinion of the leading commentators. The Court in its judgment of 20 April 1978 in Commissionaires Réunis ruled that Articles 45 and 46‘expressly concern the case of the provisional maintenance during the transitional period of national organizations of the market pending the substitution of common organizations.’ On the other hand recourse to Article 46 comes perfectly within the provision of the second subparagraph of Article 37 (3) which provides: ‘If a product is subject to a State monopoly of a commercial character in only one or some Member States, the Commission may authorize the other Member States to apply protective measures until the adjustment provided for in paragraph 1 has been effected.’ This seems to me evidence that it has not been effected. May I also add the following observations: Article 33 of the proposal for a regulation on alcohol submitted by the Commission to the Council on 7 December 1976 prohibits as regards alcohol of agricultural origin production and marketing monopolies and as regards alcohol of non-agricultural origin, marketing monopolies in view of the fact that alcohol of non-agricultural origin is produced by competing firms. If the adjustment provided for by Article 37 of the Treaty had been effected, there would be little purpose in such a provision. Finally by its resolution of 28 December 1972 the Council has stressed that in its opinion the measures intended to ensure the effective grant, in accordance with the provisions of Protocol No 19 annexed to the Act of Accession, of export refunds on spiritous beverages obtained from cereals should be adopted simultaneously with the future regulation on the alcohol sector. The fact that this has not been adopted does not mean that the protocol has lost all relevance. I therefore think that Article 37 as a whole is still applicable and that in particular it is still necessary in applying the rules contained in Article 37 (4) ‘to ensure equivalent safeguards for the employment and standard of living of the producers concerned, account being taken of the adjustments that will be possible and the specialization that will be needed with the passage of time’, which is the same wording as that used in Article 43 (3) (a) for the replacement of a national market organization by a common organization. This seems to me the only way of escaping from the complex difficulties which are raised, in respect of the provisions of the Treaty on the conditions under which aid granted by the States (Articles 92 to 94) may be regarded as having been notified in sufficient time to the Commission and in respect of the tax provisions (Articles 95 to 99) by making the systems of aid for alcohol established in France and the Federal Republic of Germany a matter of budgetary or fiscal measures to mitigate the absence of a common organization of the markets while respecting the letter of the provisions prohibiting quantitative restrictions. The Court indeed ruled in the judgment of 3 February 1976 in the Manghera case ([1976] 1 ECR 91, at p. 100): ‘the obligation laid down in paragraph (1) [of Article 37] aims at ensuring compliance with the fundamental rule of the free movement of goods throughout the common market, in particular by the abolition of quantitative restrictions and measures having equivalent effect between Member States’ (paragraph 9); ‘This objective would not be attained if, in a Member State where a commercial monopoly exists, the free movement of goods from other Member States similar to those with which the national monopoly is concerned were not ensured’ (paragraph 10). Nevertheless there was no ‘agricultural organization of the market’ in that case. As Mr Advocate General Warner said in his opinion ([1976]1 ECR 91, at p. 106) ‘there is no suggestion that the Italian tobacco monopoly exists, or has ever existed, to any extend for the benefit of Italian tobacco farmers’. On the other hand this agricultural component is of fundamental importance in the present case. Some days later in the judgment of 17 February 1976 in the Reive case ([1976] 1 ECR 181, at p. 197) it was held that ‘the prohibition on all discrimination in this field [that is to say in the conditions under which goods produced or put into circulation by nationals of the various Member States are procured and marketed] … after the expiry of the transitional period constitutes an obligation to attain a precise result, the fulfilment of which had to be made easier by, but not made dependent on, the progressive nature of the adjustment provided for’ (paragraph 24). In the judgment the same day in the Miritz case ([1976] 1 ECR 217 at p. 229) it was held: ‘Without requiring the abolition of the said monopolies, this provision prescribes in mandatory terms that they must be adjusted in such a way as to ensure that when the transitional period has ended such discrimination shall cease to exist’. Then the terms of paragraph 9 of the judgment in the Manghera case were adopted, customs duties and charges having equivalent effect being substituted for quantitative restrictions and measures having equivalent effect. These findings have been made in connexion with the German monopoly on alcohol which certainly contains an agricultural element (in particular alcohol from potatoes). Does this apply to a monopoly such as the French monopoly in alcohol where the agricultural element appears to me much more important (alcohol from beet, wine deliveries)? It was accepted in the judgment of 10 October 1978 in the Hansen case (paragraph 16) that ‘at the present stage of its development and in the absence of any unification or harmonization of the relevant provisions, Community law does not prohibit Member States from granting tax advantages, in the form of exemption from or reduction of duties, to certain types of spirits or to certain classes of producers’. This seems to me to reintroduce by means of Article 95 the adjustments provided for by Article 37 (4) and I query the wisdom of so doing. To summarize my observations at this stage, I take the view that we are led to consider the prohibition of discrimination or measures having an equivalent effect to quantitative restrictions on the basis of the specific provisions of the treaty relating to monopolies, that is to say on the basis of Article 37 taken as a whole. In applying Article 37 (2) to a measure, even a new one, taken in the context of a system of monopoly acting as equivalent to that of a national organization of the agricultural market, the condition set out in Article 37 (4) must be respected.