WRITTEN QUESTION E-2615/97 by Jean-Thomas Nordmann (ELDR) to the Commission (1 September 1997)

Subject: Establishment of a large retail centre

Has the Commission examined the compatibility with Articles 5, 52 and 59 of the Treaties of the French law of 5 July 1996 on the conditions for the establishment of a large retail centre (ensemble commercial)? What conclusions has it drawn?

Answer given by Mr Monti on behalf of the Commission (18 November 1997)

The Honourable Member's question concerning a French law of 5 July 1996 on the conditions for the establishment of a large retail centre would seem to refer to Law No 96-603 of 5 July 1996 on the development and promotion of the distributive and craft trades, the so-called 'Raffarin Law'.

That Law introduced licensing arrangements for the creation, extension and use of shop or retail centre sales areas, where those areas exceed 300 square metres. The licence is issued by a departmental commercial facilities board ('commission départementale d'équipement commercial') (CDEC) prior to the building permit being granted. This board is made up of three locally elected officials (the mayor of the local authority in which the site is located, the mayor of the most heavily populated local authority in the administrative district, and the chairman of the public inter-authority cooperation body or, failing that, the general adviser for the area), the chairman of the chamber of commerce, the chairman of the chamber of trades, and a representative of the consumer associations.

The Raffarin Law is designed to extend the former Royer Law (Law No 73-1193), which laid down arrangements for stores with a sales area in excess of 1 000 square metres. The 1973 Royer Law was a reaction against the development of hypermarkets in France at the time and sought to protect existing small-scale businesses in urban areas. The Raffarin Law's reduction of the threshold below 1 000 square metres is intended now to cover the development of 'hard discounter' stores.

The Honourable Member has asked whether the Commission considers the Law to be compatible with Articles 5, 52 and 59 of the EC Treaty. As regards Article 5 of the Treaty, case-law established by the Court of Justice ((Case C-18/93 'Corsica Ferries' [1994] ECR I-1783. )) states that this Article is worded so generally that there can be no question of applying it autonomously when the situation concerned is governed by a specific provision of the Treaty. Articles 59 and 60 of the EC Treaty apply only subsidiarily, that is if the economic activity is not already covered by another internal market provision.

As the situation in question involves the creation or modification of an establishment from which an enterprise plans to sell goods, the question of whether or not the Raffarin Law is compatible with Community law shall be examined purely on the basis of Articles 30 and 52 of the EC Treaty. These Articles prohibit restrictions in a Member State according to the origin of goods (Article 30) and of a trader wishing to open a shop there (Article 52).

However, the Raffarin Law does not permit local authorities to impose discriminatory restrictions on the access of goods or enterprises from other Member States to the French market. As this is therefore a non-discriminatory law, the Commission has no grounds for considering that Articles 30 and 52 of the EC Treaty have been infringed.

With regard to Article 30, the Court of Justice has already ruled out its application in the Dip/Lidl case ((Joined Cases C-140/94, C-141/94 and C-142/94 Dip/Lidl [1995] ECRI-3257. )). That case involved the Italian Law No 426 of 11 June 1971 which introduced a system of administrative licensing by local authorities of retail establishments in Italy. As the legislation in France is comparable to that Italian Law, the Commission considers that the Court of Justice's conclusion also applies to the Raffarin Law.

With regard to Article 52, the Commission currently has no evidence of any infringement of that Article in the light of the Court of Justice's case-law. However, the Commission will closely monitor the future application of the Raffarin Law by the CDECs.