Criminal proceedings against Harry Franzén.
Date: 1997-10-23
34 As is clear from the reasoning in the order for reference and the observations submitted to the Court, the questions raised by the national court concern not only the domestic provisions relating to the existence and operation of the monopoly but also, more generally, the provisions which, although not governing the operation of the monopoly, nevertheless have a direct bearing upon it, as is the case with the rules relating to production and wholesale licences.
35 Having regard to the case-law of the Court, it is necessary to examine the rules relating to the existence and operation of the monopoly with reference to Article 37 of the Treaty, which is specifically applicable to the exercise, by a domestic commercial monopoly, of its exclusive rights (judgments in Case 91/75 Hauptzollamt Göttingen v Miritz [1976] ECR 217, paragraph 5; Case 120/78 REWE-Zentral AG v Bundesmonopolverwaltung für Branntwein (`Cassis de Dijon') [1979] ECR 649, paragraph 7; and Case 91/78 Hansen v Hauptzollamt Flensburg [1979] ECR 935, paragraphs 9 and 10).
36 On the other hand, the effect on intra-Community trade of the other provisions of the domestic legislation which are separable from the operation of the monopoly although they have a bearing upon it, must be examined with reference to Article 30 of the Treaty (see, to this effect, the judgments in Miritz, cited above, paragraph 5, Cassis de Dijon, cited above, paragraph 7, and Case 86/78 Peureux v Services Fiscaux de la Haute-Saône et du Territoire de Belfort [1979] ECR 897, paragraph 35).
The rules relating to the existence and operation of the monopoly
37 It is clear not only from the wording of Article 37 but also from the position which it occupies in the general scheme of the Treaty that the article is designed to ensure compliance with the fundamental principle that goods should be able to move freely throughout the common market, in particular by requiring quantitative restrictions and measures having equivalent effect in trade between Member States to be abolished, and thereby to ensure maintenance of normal conditions of competition between the economies of Member States in the event that a given product is subject, in one or other of those States, to a national monopoly of a commercial character (judgments in Case 59/75 Pubblico Ministero v Manghera and Others [1976] ECR 91, paragraph 9; Hansen, cited above, paragraph 8; Case 78/82 Commission v Italy [1983] ECR 1955, paragraph 11; Case C-347/88 Commission v Greece [1990] ECR I-4747, paragraph 42; and Case C-387/93 Banchero [1995] ECR I-4663, paragraph 27, hereinafter `Banchero II').
38 However, the Court has repeatedly stated that Article 37 does not require national monopolies having a commercial character to be abolished 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 (see the judgments cited above: Manghera, paragraph 5; Hansen, paragraph 8; Commission v Italy, paragraph 11 and Banchero II, paragraph 27).
39 The purpose of Article 37 of the Treaty is to reconcile the possibility for Member States to maintain certain monopolies of a commercial character as instruments for the pursuit of public interest aims with the requirements of the establishment and functioning of the common market.  It aims at the elimination of obstacles to the free movement of goods, save, however, for restrictions on trade which are inherent in the existence of the monopolies in question.
40 Thus, Article 37 requires that the organization and operation of the monopoly be arranged so as to exclude any discrimination between nationals of Member States as regards conditions of supply and outlets, so that trade in goods from other Member States is not put at a disadvantage, in law or in fact, in relation to that in domestic goods and that competition between the economies of the Member States is not distorted (see, to this effect, the judgment in Commission v Italy, cited above, paragraph 11).
44 It must first be pointed out in this regard that the agreement made between the State and Systembolaget requires the latter to select the products which it markets on the basis of their quality, lack of adverse effects on human health, consumer demand and business or ethical considerations, that is to say on the basis of criteria independent of the origin of the products.
51 Fifth, traders are entitled to be told the reasons for decisions taken by the monopoly regarding the selection of beverages and their maintenance in the `basic' assortment and may challenge such decisions before a board offering every guarantee of independence.
54 It is true that a monopoly such as Systembolaget has only a limited number of `shops'.  However, it does not appear from the information provided to the Court that the number of sales outlets are limited to the point of compromising consumers' procurement of supplies of domestic or imported alcoholic beverages.
62 As far as product promotion is concerned, the agreement made between the Swedish State and Systembolaget requires the latter to adopt marketing and advertising measures which are impartial and independent of the origin of the products and to endeavour to make known new beverages to consumers whilst taking account of the restrictions in the Law on Alcohol.
67 As explained above, in view of the arguments which have been exchanged before both the national court and this Court, the questions referred for a preliminary ruling must be understood as also relating to the provisions of the domestic legislation which, although not, strictly speaking, regulating the functioning of the monopoly, nevertheless have a direct bearing upon it.  Those provisions must be examined with reference to Article 30 of the Treaty.
69 According to the established case-law of the Court, all trading rules which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade constitute measures having an effect equivalent to quantitative restrictions (judgment in Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837, paragraph 5).
70 In a national system such as that in question in the main proceedings, only holders of production licences or wholesale licences are allowed to import alcoholic beverages, that is to say traders who fulfil the restrictive conditions to which issue of those licences is subject.  According to the information provided to the Court during the proceedings, the traders in question must provide sufficient personal and financial guarantees to carry on the activities in question, concerning in particular their professional knowledge, their financial capacity and possession of storage capacity sufficient to meet the needs of their activities.  Furthermore, the submission of an application is subject to payment of a high fixed charge (SKR 25 000), which is not reimbursed if the application is rejected.  Finally, in order to keep his licence, a trader must pay an annual supervision fee, which is also high (between SKR 10 000 and SKR 323 750 for the basic amounts, depending on the kinds of beverage and the quantities produced or marketed).
71 The licensing system constitutes an obstacle to the importation of alcoholic beverages from other Member States in that it imposes additional costs on such beverages, such as intermediary costs, payment of charges and fees for the grant of a licence, and costs arising from the obligation to maintain storage capacity in Sweden.
75 It is indeed so that measures contrary to Article 30 may be justified on the basis of Article 36 of the Treaty.  All the same, according to established case-law (Cassis de Dijon, cited above; Case C-470/93 Verein gegen Unwesen in Handel und Gewebe Köln v Mars [1995] ECR I-1923, paragraph 15; Case C-368/95 Familiapress [1997] ECR I-0000, paragraph 19; and Joined Cases C-34/95, C-35/95 and C-36/95 De Agostini and TV-Shop [1997] ECR I-0000, paragraph 45), the domestic provisions in question must be proportionate to the aim pursued and not attainable by measures less restrictive of intra-Community trade.
76 Although the protection of human health against the harmful effects of alcohol, on which the Swedish Government relies, is indisputably one of the grounds which may justify derogation from Article 30 of the Treaty (see, to this effect, the judgment in Joined Cases C-1/90 and C-176/90 Aragonesa de Publicidad Exterior and Publivía v Departamento de Sanidad y Seguridad Social de la Generalitat de Cataluña [1991] ECR I-4151, paragraph 13), the Swedish Government has not established that the licensing system set up by the Law on Alcohol, in particular as regards the conditions relating to storage capacity and the high fees and charges which licence-holders are required to pay, was proportionate to the public health aim pursued or that this aim could not have been attained by measures less restrictive of intra-Community trade.
77 It must therefore be held that Articles 30 and 36 of the Treaty preclude domestic provisions allowing only traders holding a production licence or a wholesale licence to import alcoholic beverages on conditions such as those laid down by Swedish legislation.
Breach of Article 52 of the EC Treaty and of the public procurement directives
79 In this regard, it must be reiterated that, under the division of jurisdiction provided for by Article 177 of the Treaty in preliminary ruling proceedings, it is for the national court alone to determine the subject-matter of the questions which it wishes to refer to the Court.  The Court cannot, at the request of one party to the main proceedings, examine questions which have not been submitted to it by the national court.  If, in view of the course of the proceedings, the national court were to consider it necessary to obtain further interpretations of Community law, it would be for it to make a fresh reference to the Court (Case 311/84 CBEM v CLT and IPB [1985] ECR 3261, paragraph 10; Case C-337/88 SAFA v Amministrazione della Finanze dello Stato [1990] ECR I-1, paragraph 20; and Case C-196/89 Nespoli and Crippa [1990] ECR I-3647, paragraph 23).