Criminal proceedings against Giorgio Domingo Banchero.
Date: 1995-12-14
15 The Court has consistently held that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court (see, inter alia, the judgment in Case C-30/93 AC-ATEL Electronics Vertriebs v Hauptzollamt Muenchen-Mitte [1994] ECR I-2305, paragraph 18).
17 Article 5 requires Member States to carry out their obligations under Community law in good faith. It is, however, settled case-law that this provision cannot be applied independently when the situation concerned is governed by a specific provision of the Treaty, as in the present case (see the judgment in Joined Cases C-78/90 to C-83/90 Compagnie Commerciale de l' Ouest and Others v Receveur Principal des Douanes de La Pallice-Port [1992] ECR I-1847, paragraph 19). For that reason, in so far as they relate to a series of provisions of the Treaty, including Article 5, the questions submitted require to be examined in regard to Article 5 only in relation to the specific provisions which call for an answer from the Court and, in particular, given the information contained in the case-file, Articles 90 and 86.
26 As is evident from its wording, the second subparagraph of Article 37(1), which is a provision specific to State monopolies of a commercial character, applies to situations in which the national authorities are in a position to control, direct or appreciably influence trade between Member States through a body established for that purpose or a delegated monopoly (judgments in Case 30/87 Bodson v Pompes Funèbres des Régions Libérées [1988] ECR 2479, paragraph 13, and in Case C-393/92 Municipality of Almelo and Others v Energiebedrijf IJsselmij [1994] ECR I-1477, paragraph 29).
27 As the Court has held in its judgments in, inter alia, Case 59/75 Pubblico Ministero v Manghera and Others [1976] ECR 91, Case 91/78 Hansen v Hauptzollamt Flensburg [1979] ECR 935 and Case 78/82 Commission v Italy [1983] ECR 1955, Article 37 of the Treaty does not require the abolition of national monopolies having a commercial character outright but requires them to be adjusted in such a way as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States. It is clear not only from the wording of Article 37 but also from its position in the general scheme of the Treaty that the article is designed to ensure 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 in trade between Member States, and thereby to maintain normal conditions of competition between the economies of Member States where a given product is subject, in one or other of those States, to a national monopoly of a commercial character.
29 Next, Article 37 is irrelevant with regard to national provisions which do not concern the exercise by a public monopoly of its exclusive right but apply in a general manner to the production and marketing of goods, whether or not they are covered by the monopoly in question (judgment in Case 120/78 Rewe-Zentral v Bundesmonopolverwaltung fuer Branntwein [1979] ECR 649 ("the Cassis de Dijon case"), point 7). In the precise case of a distribution system such as that which the questions submitted in the present instance concern, the position could be different only if the provisions in question allowed the national authorities to intervene in the procurement choices of retailers.
30 It must be pointed out in this regard that the Italian legislation reserves the exclusive right of retail sale of manufactured tobacco products to individuals to whom the Amministrazione Autonoma dei Monopoli di Stato (Autonomous Administration of State Monopolies, hereinafter "the AAMS") has issued a concession or authorization. On this point, it does not appear from the information before the Court that the Italian legislation allows the national authorities to intervene, through the AAMS, in the operation of tobacco outlets so as to control or influence the procurement choices of retailers, to ensure an outlet for the monopoly' s tobacco products (see, in contrast, Case C-347/88 Commission v Greece [1990] ECR I-4747, paragraphs 43 and 44), or to encourage or discourage certain types of imports from other Member States. Indeed, in its reply to a question put by the Court, the Italian Government stated that procurement choices were a matter entirely for retailers to determine on the basis of market demands.
33 The Court has consistently held that all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions (judgment in Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837, paragraph 5).
34 However, as the Court ruled in its judgment in Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I-6097, paragraph 16, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment, so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States.
37 Furthermore, the obligation on all traders to have their products distributed by authorized retailers applies without distinction as to the origin of the products in question and does not affect the marketing of goods from other Member States differently from that of domestic products.
39 It does not, however, appear from the information before the Court that authorizations to operate outlets are limited to the extent of jeopardizing a satisfactory supply of domestic and imported tobacco products to consumers. The Italian Government has stated, in reply to a question put by the Court, that the legislation in question seeks to ensure an optimum geographical spread of retailers, particularly in view of considerations relating to territorial planning and the proximity of outlets to customer concentrations.
44 It follows from all of the foregoing that national legislation, such as that in force in Italy, which reserves the retail sale of manufactured tobacco products, irrespective of their origin, to authorized distributors but does not thereby bar access to the national market for products from other Member States or does not impede such access more than it impedes access for domestic products within the distribution network, does not fall within the scope of Article 30 of the Treaty.
The third question
51 Nevertheless, the mere creation of a dominant position by the granting of an exclusive right within the meaning of Article 90(1) is not as such incompatible with Article 86 of the Treaty. A Member State will contravene the prohibitions contained in those two provisions only if, in merely exercising the exclusive right granted to it, the undertaking in question cannot avoid abusing its dominant position (see the judgments in Case C-179/90 Merci Convenzionali Porto di Genova v Siderurgica Gabrielli [1991] ECR I-5889, paragraph 17, and in Case C-323/93 Société Civile Agricole du Centre d' Insémination de la Crespelle v Coopérative d' Élevage et d' Insémination Artificielle du Département de la Mayenne [1994] ECR I-5077, paragraph 18).
53 Moreover, it does not follow from the information before the Court that the system of wholesale distribution of tobacco products put in place by that legislation, in so far as it allows only the AAMS to issue authorizations to operate outlets, results in a situation which prejudices consumers, within the meaning of heading (b) of the second paragraph of Article 86 of the Treaty. In any event, it cannot be argued, particularly in view of the points already set out in paragraph 39 of this judgment, that this system is manifestly unable to satisfy consumer demand (see, a contrario, the judgment in Case C-41/90 Hoefner and Elser v Macrotron [1991] ECR I-1979, paragraph 31).
55 A fortiori, it cannot be argued that the Italian legislation establishes, in favour of authorized retailers, a contiguous series of territorially limited monopolies creating over the national territory a dominant position within the meaning of Article 86 of the Treaty (on this point, see paragraph 17 of the judgment in Centre d' Insémination de la Crespelle, cited above).
58 While, in principle, criminal legislation and rules of criminal procedure are matters which remain within the Member States' area of competence, the Court has consistently held that Community law sets certain limits in relation to the control measures which it permits the Member States to maintain in connection with the free movement of goods and persons. Administrative measures or penalties must not go beyond what is strictly necessary, and the control procedures must not be framed in such a way as to restrict the freedom required by the Treaty and must not be accompanied by a penalty which is so disproportionate to the gravity of the infringement that it becomes an obstacle to the exercise of that freedom (judgment in Case 203/80 Casati [1981] ECR 2595, paragraph 27; see also the judgments in Case 157/79 Regina v Pieck [1980] ECR 2171, paragraph 19, and in Case 299/86 Drexl [1988] ECR 1213, paragraph 18).