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).