Commission of the European Communities v Hellenic Republic.
Date: 2000-10-19
18 It must be borne in mind, as a preliminary point, that it is clear from the third and seventh recitals in its preamble that Directive 95/59 was adopted as part of a policy designed to harmonise the structures of excise duty on manufactured tobacco, to ensure that competition in the different categories of manufactured tobacco belonging to the same group was not distorted, and thereby to open up the national markets of the Member States.
19 To that end, the first paragraph of Article 8 of Directive 95/59 provides that cigarettes manufactured in the Community and those imported from non-member countries are to be subject to a proportional excise duty in each Member State calculated on the maximum retail selling price, including customs duties, and also to a specific excise duty calculated per unit of the product.
20 The first paragraph of Article 9 of that directive provides that manufacturers or, where appropriate, their representatives or authorised agents in the Community and importers of tobacco from non-member countries are to be free to determine the maximum retail selling price for each of their products, the aim being to ensure effective competition between them.
21 However, the setting of a minimum selling price by public authorities inevitably has the effect of limiting the freedom of producers and importers to determine their maximum retail selling prices since, in any event, such prices cannot be any lower than the compulsory minimum price.
25 In that regard, it must first be observed that it is clear from Case 90/82 Commission v France [1983] ECR 2011, paragraph 22, that the expression control of the price levels cannot be interpreted as reserving to the Member States a discretion to lay down anything other than national legislation of a general nature intended to check the increase in prices.
26 It is also clear from Case 13/77 GB-Inno-BM [1977] ECR 2155, paragraph 64, that, in relation to the machinery for the taxation of tobacco, the expression observance of imposed prices must be understood as referring to a price which, once determined by the manufacturer or the importer and approved by the public authorities, is binding as a maximum price and must be observed as such at every stage of the distribution chain until it is sold to the consumer. That price-fixing machinery performs the function of ensuring that the integrity of tax revenue is not undermined by the exceeding of imposed prices.
30 It must be observed that Article 36 of the Treaty enables the Member States to apply national provisions that restrict intra-Community trade in order to protect the health and life of humans. However, measures based on Article 36 of the Treaty cannot be justified unless they are necessary in order to attain the objective pursued by that article and that objective is not capable of being attained by measures which are less restrictive of intra-Community trade (see, in particular, Case 72/83 Campus Oil and Others v Minister for Industry and Energy and Others [1984] ECR 2727, paragraph 37; Case 216/84 Commission v France [1988] ECR 793, paragraph 7; and Case C-347/88 Commission v Greece [1990] ECR I-4747, paragraph 58).
31 In this case it must be observed that the objective of protecting public health may be adequately attained by increased taxation of manufactured tobacco products, which would safeguard the principle of free formation of prices.