Officier Van Justitie v. Van de Haar and Kaveka de Meern B.V. (Cases 177-178/82) Before the Court of Justice of the European Communities (1st Chamber) ECJ (1st Chamber) (Presiding, Koopmans P.C.; O'Keeffe and Bosco JJ.) Herr Gerhard Reischl Advocate General. 5 April 1984 Reference from the Netherlands by the Arrondissementsrechtbank (District Court), Utrecht, under Article 177 EEC. Imports. Inter-State trade. De minimis. Since Articles 30 and 85 EEC pursue different aims (elimination of national [public] measures capable of hindering inter-State trade and maintenance of effective competition between [private] undertakings, respectively) the 'de minimis' rule applicable to Article 85 does not apply to Article 30. A court called upon to consider whether national legislation is compatible with Article 30 must decide if it is capable of hindering, directly or indirectly, actually or potentially, intra-Community trade; that may be so even if the hindrance is slight and even if it is possible for imported products to be marketed in other ways. [14] Imports. Minimum prices. Excise labels. Tobacco. In order to decide whether a national law which, for retail sale of tobacco products, imposes a fixed price freely chosen by the manufacturer or importer, together with the appropriate excise label, constitutes a quantitative restriction, the national court must seek whether, having regard to the fiscal restraints on trade in that product, such a system of imposed prices is in itself likely to hinder, directly or indirectly, actually or potentially, trade between member-States. [22] Restrictive practices. State measures. Legislation. Direct effect. While member-States may not enact legislation to enable private undertakings to escape the constraints imposed by Article 85 EEC, that Article belongs to the

rules on competition applying to undertakings and is thus intended to govern the conduct of private undertakings in the Common Market. Public legislation imposing fixed prices set by manufacturers or importers may not therefore be directly attacked by individuals *567 before national courts as being incompatible with Articles 5(2) and 85 EEC read together. [24] The Court interpreted Articles 30 and 85 EEC in the context of Dutch legislation requiring tobacco products to be sold retail bearing an ad valorem excise label and at a fixed price determined by the manufacturer or importer to the effect that Article 30 applies even if the effect on inter-State trade is minimal, that for the prohibition in Article 30 to apply the system of imposed prices must itself be likely to hinder trade between member-States, which is a matter for the national courts, and that the legislation cannot itself be directly impugned by individuals as being anticompetitive under Articles 85 and 5 EEC in combination. Representation Adriaan Bos, Deputy Legal Adviser at the Foreign Ministry, for the Dutch Government as amicus curiae. A. F. de Savornin Lohman, of the Rotterdam Bar, for the accused. Bastiaan van der Esch, Principal Legal Adviser to the Commission, for the E.C. Commission as amicus curiae. The following cases were referred to by the Court in its judgment: 1. Etablissements Consten SA and Grundig-Verkaufs-GmbH v. E.C. Commission (56 & 58/64), 13 July 1966: [1966] E.C.R. 299, [1966] C.M.L.R. 418. Gaz:56/64 2. La Technique Miniere v. Maschinenbau Ulm GmbH (56/65), 30 June 1966: [1966] E.C.R. 235, [1966] C.M.L.R. 357. Gaz:56/65 3. Openbaar Ministerie v. Van Tiggele (82/77), 24 January 1978: [1978] E.C.R. 25, [1978] 2 C.M.L.R. 528. Gaz:82/77 4. GB-INNO-BM NV v. Vereniging Van de Kleinhandelaars In Tabak (Atab) (13/77), 16 November 1977: [1977] E.C.R. 2115, [1978] 1 C.M.L.R. 283. Gaz:13/77 The following further cases were referred to by the Advocate General: 5. Nederlandse Vereniging voor de Fruit en Groentenimpor-Thandel 'Frubo' v. E.C. Commission (71/74), 15 May 1975: [1975] E.C.R. 563, [1975] 2 C.M.L.R. 123. Gaz:71/74 6. Heintz Van Landewyck Sàrl, Federation Belgo-Luxembourgeoise des Industries du Tabac Asbl (FEDETAB) v. E.C. Commission (209-215 & 218/78), 29 October 1980: [1980] E.C.R. 3125, [1981] 3 C.M.L.R. 134. Gaz:209/78 7. Riseria Luigi Geddo v. Ente Nazionale Risi (2/73), 12 July 1973: [1973] E.C.R. 865, [1974] 1 C.M.L.R. 13. Gaz:2/73 8. Officier Van Justitie v. Van Haaster (190/73), 30 October 1974: [1974] E.C.R. 1123, [1974] 2 C.M.L.R. 521. Gaz:190/73 *568 9. Procureur du Roi v. Dassonville (8/74), 11 July 1974: [1974] E.C.R. 837,

[1974] 2 C.M.L.R. 436. Gaz:8/74 10. Procureur General v. Buys (5/79), 18 October 1979: [1979] E.C.R. 3203, [1980] 2 C.M.L.R. 493. Gaz:5/79 11. Openbaar Ministerie v. Danis (16-20/79), 6 November 1979: [1979] E.C.R. 3327, [1980] 3 C.M.L.R. 492. Gaz:16/79 12. Oosthoek's Uitgeversmaatschappij BV (286/81), 15 December 1982: [1982] E.C.R. 4575, [1983] 3 C.M.L.R. 428. Gaz:286/81 13. Re Import Duties on Mutton: Germany v. EEC Commission (52 & 55/65), 16 June 1966: [1966] E.C.R. 159, [1967] C.M.L.R. 22. Gaz:52/65 The following additional case was referred to in argument: 14. Dansk Supermarked A/s v. Imerco A/S (58/80), 22 January 1981: [1981] E.C.R. 181, [1981] 3 C.M.L.R. 590. Gaz:58/80 TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE Facts The main proceedings before the national court are criminal proceedings which were brought before the Arrondissementsrechtbank, Utrecht, by the Public Prosecutor of that town against Kaveka de Meern BV, a company whose business is the wholesale of foodstuffs, and its former general manager, Jan van de Haar. The accused are charged with infringing the prohibition contained in section 30 of the Wet op de Accijns van Tabaksfabrikaten (Act on the Excise Duty on Tobacco Products, hereinafter referred to as 'the Tobacco Excise Act') 1964. The part of that section relevant in this case is the first sentence, which reads as follows: It shall be an offence to sell, offer for sale or supply tobacco products to persons other than re-sellers at a price lower than that appearing on the excise label. The accused are charged with, inter alia, offering for sale a number of tobacco products at prices lower than those appearing on the excise labels to persons of whom some may not be re-sellers. The customers of Kaveka, which is engaged in particular in the wholesale of tobacco products (cigars, cigarettes and pipe tobacco), are re-sellers and persons who use the products which they buy *569 from Kaveka for business or trade purposes. The last category of persons includes bulk buyers who are not re-sellers. It appears that Kaveka's business practice is not to check at the cash desk whether the customer is a re-seller of the tobacco products which he has in his trolley. The company consciously takes the risk that the buyer will not use the goods purchased by him for business or trade purposes. Kaveka operates a system of entrance cards and these may be obtained by businesses and institutions such as old people's homes. The defence advanced by the accused is that the alleged offences are not

punishable since section 30 of the Tobacco Excise Act is contrary to Articles 5, 30 and 85 of the EEC Treaty. They contend that the abuse of a dominant position entailed by the compulsory price system may affect trade between memberStates and impede imports. In addition, the fact that the excise duty is subject to an absolute minimum leads to the formation of an absolute minimum sale price, which is contrary to Article 30 of the Treaty. Considering that the issue before it concerned the interpretation of Community law, the Arrondissementsrechtbank decided, by judgments of 1 June 1982, to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty: 1. In several decisions on Article 30 of the EEC Treaty the Court of Justice has declared that any commercial provision adopted by the member-States which is capable of hindering intra-Community trade, directly or indirectly, actually or potentially, is to be considered a measure having an effect equivalent to quantitative restrictions. This formulation appears to come very close to what the Court has said with regard to the concept of 'agreements ... which may affect trade between member-States' within the meaning of Article 85(1) of the EEC Treaty in Cases 56 and 58/64 (Consten and Grundig v. EEC Commission [FN1]) and in Case 56/65 (Societe Technique Miniere v. Maschinenbau Ulm [FN2]), although the term used in those cases is 'may affect' trade between memberStates whereas, for example, in the Dassonville judgment [FN3] the term 'hinder' is used. In a case where the national court has to judge whether a legal provision of a member-State which applies without distinction to imported and domestic products is a measure having equivalent effect within the meaning of Article 30 of the EEC Treaty, must it in its judgment take into account the case law of the Court of Justice concerning Article 85 of the EEC Treaty and more particularly the interpretation given by the Court to the expression ' may affect trade between member-States', from which it is clear that the criteria bringing the case within the prohibition of Article 85(1) are satisfied if it is established that a commercial provision is likely to deflect trade from its natural course, or must the national court give a more independent meaning to Article 30 of the EEC Treaty to the effect that such a legal provision only constitutes a *570 restriction on trade and thus a measure having equivalent effect within the meaning of Article 30 if the court is able to find on the basis of the factual circumstances that the importation of goods from other member-States may be restricted by that legal provision? FN1 [1966] E.C.R. 299, [1966] C.M.L.R. 418. FN2 [1966] E.C.R. 235, [1966] C.M.L.R. 357. FN3 [1974] E.C.R. 837, [1974] 2 C.M.L.R. 436. 2. Must a legal provision of a member-State which applies without distinction to domestic and imported products also be regarded as a measure having equivalent effect within the meaning of Article 30 of the EEC Treaty where it is clear that that provision restricts imports into a member-State only to a very small

degree and other possibilities remain for the marketing of products from other member-States? 3. Must the national court in its inquiry into the restrictive effects on trade of a legal provision which applies without distinction to the importation of products from other member-States and the marketing of domestic products have regard solely to the effects of that legal provision or must it also take account of the fact that other restraints on trade exist on the relevant market as a result of the tax laws of the member-States and the differences between them? 4. Does it make any difference to the reply to be given to the previous question if in the opinion of the national court the relevant legal provision has, taken by itself, no restrictive effect at all on trade? 5. If, as a result of a legal provision of a member-State, a system of vertical pricefixing exists to which all the traders concerned are bound and departure from which constitutes an offence, can an individual who has infringed such a provision rely before the national courts upon the incompatibility of that national provision with Article 5(2), in conjunction with Article 85, of the EEC Treaty?" Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. After establishing that no member-State or institution involved in the proceedings had requested that the case should be decided in plenary session, the Court assigned the cases, by order of 23 February 1983, to the First Chamber pursuant to Article 95(1) and (2) of the Rules of Procedure. By order of the Court (First Chamber) of 10 March 1983 the cases were joined for the purposes of the procedure and judgment. Opinion of the Advocate General (Herr Gerhard Reischl) Section 30 of the Dutch Wet op de Accijns van Tabaksfabrikaten (Tobacco Excise Act) 1964 provides that it shall be an offence to sell, offer for sale or supply tobacco products to persons other than re-sellers at prices lower than those appearing on the excise label. According to the official explanatory statement, the purpose of that provision is to prevent any deviation from the minimum prices from affecting conditions of competition in the retail trade, in other words to protect specialised retailers. The accused in the main proceedings, Kaveka De Meern BV, a self-service wholesale business, and its general manager are charged *571 with contravening that provision. It was found that in November 1977 Kaveka offered for sale cigars, cigarettes and pipe tobacco at prices lower than those marked on the excise labels to persons other than re-sellers. Although only holders of a special pass are allowed into its stores, this may be obtained not only by resellers but also by persons who, like bulk buyers, use the goods which they purchase for business or trade purposes. Furthermore, Kaveka never checks whether purchases are made for the purpose of resale. In their defence against the charge, which the Arrondissementsrechtbank in Utrecht does not doubt is in principle well founded, the accused relied inter alia on Community law. They take the view that section 30 of the Dutch Act of 1964 is not compatible with Article 30 of the EEC Treaty or with Article 85 which they

maintain must be read in conjunction with Article 5. They point out first that the concepts of 'affecting trade between member-States' in the sense of Article 85 of the EEC Treaty and 'restrictions' on trade in the sense of Article 30 of the Treaty largely coincide in case law. Secondly, they point out that section 30 of the Dutch Act, which they contend establishes collective re-sale price maintenance even for importers and fixes statutory minimum sale prices, clearly restricts trade between member-States for the purposes of the criteria laid down in case law and does not therefore accord with Article 30 of the EEC Treaty. In view of those arguments the Dutch court dealing with the case first ordered an investigation into the Dutch market in tobacco products by the Economic Control Department of the Ministry for Economic Affairs which stated in its report of 30 September 1981 that the excise label prices were fixed by the domestic manufacturer and the importer who were bound by the relevant price regulations when determining the retail price. Under the Act it was indeed possible, the report stated, for the same product to be marketed by several importers at different prices. However, it had to be borne in mind that importers were either given exclusive sales rights or belonged to multinational undertakings and that it was in general significant that most manufacturers and importers were parties to agreements on competition under private law. Finally, the report also pointed out that price elasticity in the demand for cigarettes was low and brand loyalty high which meant that price differences had little effect on the market. The Arrondissementsrechtbank further took the view that in order to decide the cases before it it still needed an interpretation of the provisions of Community law upon which the accused relied. By judgments of 1 June 1982 it therefore stayed the proceedings and in both cases submitted the following identical questions for a preliminary ruling: [The Advocate General repeated the questions, and continued:] *572 My views on those questions, which apparently arise in similar proceedings brought against 17 other undertakings and persons, are as follows: 1 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 Dutch 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 v. A.T.A.B., [FN4] which dealt with a similar provision of Belgian law, inasmuch as that judgment emphasised 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 *573 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). FN4 [1977] E.C.R. 2115, [1978] 1 C.M.L.R. 283. Different formulations are to be found throughout the Court's case law. For example, in the judgment in the grundig and consten case [FN5] 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. [FN6] In the judgment in Case 56/65 [FN7] it was similarly held that it must be possible to see whether the realisation 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. [FN8] FN5 [1966] E.C.R. 299, [1966] C.M.L.R. 418. FN6 At p. 341 (E.C.R.), At p. 472 (C.M.L.R.). FN7 [1966] E.C.R. 235, [1966] C.M.L.R. 357 (La Technique Miniere v. Maschinenbau Ulm GmbH).

FN8 At p. 249 (E.C.R.), At p. 375 (C.M.L.R.). Similarly, it was held in Case 71/74 [FN9] 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. [FN10] Finally, the judgment in the fedetab case [FN11] 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 [FN12] that the provision covers all measures which amount to a total or partial restraint of imports as well as other encumbrance 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, *574 the judgments in Case 190/73 Van Haaster [FN13] and Case 8/74 Dassonville [FN14]). FN9 [1975] E.C.R. 563, [1975] 2 C.M.L.R. 123 (Frubo v. E.C. Commission). FN10 At paras. [37]-[38]. FN11 [1980] E.C.R. 3125, [1981] 3 C.M.L.R. 134. FN12 [1973] E.C.R. 865, [1974] 1 C.M.L.R. 13 (Riseria Luigi Geddo v. Ente Nazionale Risi). FN13 [1974] E.C.R. 1123, [1974] 2 C.M.L.R. 521. FN14 [1974] E.C.R. 837, [1974] 2 C.M.L.R. 436. 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 [FN15]), 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. FN15 [1978] E.C.R. 25, [1978] 2 C.M.L.R. 528 (Openbaar Ministerie v. Van Tiggele). 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 v. A.T.A.B.. [FN16] 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 Buys [FN17] and Cases 16-20/79 danis [FN18]) but simply of the *575 exclusion of price competition at the retail level, reference may also be made to the judgment in Case 286/81 Oosthoek [FN19] in which it was held that national rules restricting sales promotion schemes are a barrier to imports and may restrict their volume. FN16 [1977] E.C.R. 2115, [1978] 1 C.M.L.R. 283. FN17 [1979] E.C.R. 3203, [1980] 2 C.M.L.R. 493. FN18 [1979] E.C.R. 3327, [1980] 3 C.M.L.R. 492. FN19 [1982] E.C.R. 4575, [1983] 3 C.M.L.R. 428. 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

characterised 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 specialised 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 specialised retailers) on which the Dutch Act is based. As far as fiscal control requirements are concerned, however, it has already been made clear in the judgment in INNO v. A.T.A.B.. 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). 2 In its second question the national court then asks whether it is of importance for the application of Article 30 of the EEC Treaty that imports are restricted only to a very small degree. The reason for that question is that the accused parties in the main proceedings argue that, as far as the question whether trade may be affected is concerned, the same criteria apply in the case of Article 30 and that of Article 85 except that, according to the Court's case law, Article 85 has application only if there is an appreciable effect on trade (see the fedetab judgment). *576 Like the Commission I think that this question must be answered in the negative. On this point reference may be made to the Court's case law on the prohibition of charges having an effect equivalent to customs duties, according to which, because exceptions to the prohibition must be construed narrowly, the prohibition applies even where there is only a small discriminatory effect equivalent to that of a customs duty (Joined Cases 52 and 55/65 [FN20]) and covers any pecuniary charge affecting goods by reason of their crossing the frontier (Case 2/73 paragraph 5). It thus becomes possible to recognise a criterion which has application throughout Title I of the Treaty ('Free movement of goods'). This view is supported not only by the very broad definition contained in the case law on Article 30. It is also relevant that in the judgment in Case 190/73 Van Haaster, which related to national measures restricting production, the Court emphasised that the purpose of the prohibition of customs duties or charges having equivalent effect and of quantitative restrictions or measures having equivalent effect is to eliminate all obstacles to the freedom of intra-Community trade (paragraph 9). FN20 [1966] E.C.R. 159 At 170, [1967] C.M.L.R. 22 At 43 (Re Import Duties on

Mutton: Germany v. E.C. Commission). Moreover, another reason why a different test in relation to whether trade is affected would appear justified as regards Article 85 is not hard to find. Considerations relating to the contractual freedom of undertakings, which are after all those to whom the provisions of Article 85 apply, and to problems of the administration by the Commission of procedures for the investigation of restrictive practices, a field in which the Commission has important duties, are clearly important here. Such aspects are naturally of no consequence in the case of injunctions directed to the member-States which, according to the manner in which they are drafted, have direct effect. 3 The third question seeks a clarification of the problem whether only the effects of the rules under investigation are relevant or whether regard must also be had to the fact that other restraints of trade exist on the relevant market as a result of the various tax laws of the member-States. Here again reference may be made to the judgment in INNO v. A.T.A.B.. In that judgment, as the Court will remember, it was stated that it is for each memberState to choose its own method of fiscal control over manufactured tobacco on sale in its territory and that because of the need to satisfy the demands of the rigorous and often complicated controls, which moreover differ from one member-State to another, the import and export of manufactured *577 tobacco come up against inevitable obstacles (paragraphs 14 and 15). The Court also stated that when a system of fixed retail prices is examined in the light of Article 30 it must be established whether, account being taken of the fiscal obstacles affecting the sector of the products in question, such a system of fixed prices is in itself likely to hinder imports between member-States (paragraph 56). From those passages the Commission deduces that in an inquiry such as that to be made in the main proceedings only obstacles compatible with the Treaty must be taken into account and not, on the other hand, all other possible obstacles. This does not seem convincing to me, however. I think, and in my Opinion in INNO v. A.T.A.B. I made this point (on which the Court has not hitherto clearly expressed any views) that all the obstacles to trade in tobacco products must indeed be established and only then must the question be put whether, assuming that all the measures which are incompatible with the Treaty did not exist, the system of fixed prices may still be said to affect trade. In doing this particular consideration must also be given, with regard to the tobacco market, to agreements between undertakings, for example granting an importer exclusive distribution rights, and to the administrative practice of not issuing different tax labels for one and the same brand of cigarettes which, in the Commission's opinion, is contrary to Article 5 of Directive 72/464. [FN21] It is in fact conceivable that if products may be imported by different importers each pursuing its own pricing policy or an importer may charge different prices for a single brand using different excise labels which must be affixed by the manufacturer, sufficient latitude exists for price competition in respect of a brand. It is also conceivable

that in this way arrangements may be made for demand for certain products, especially imported products, to be increased, thus producing that effect on the volume of trade the lack of which in the absence of any price competition the Commission notes at the retail stage. The result might very well be, however, that the provisions requiring the prices on the excise label to be charged have in themselves no effect on trade between member-States. FN21 [1972] O.J. Spec.Ed. 31 December L303/1. 4 The next question is then whether the third question must be answered differently if, in the opinion of the national court, the provision under investigation has, taken by itself, no restrictive effect on trade. I must admit that, considering the entire context of the questions, the point of this question escapes me. In any case I feel that no further comments are necessary following my remarks on the third *578 question. It seems to me particularly inappropriate to suggest, as was done during the proceedings, that the national court's opinion, which is clear from the way in which the fourth question is formulated, might possibly be wrong and that after an objective inquiry is made with the help of experts a different view might be arrived at. In the first place, it is undoubtedly a matter for the national court to make the necessary decision, applying the tests indicated by the Court of Justice. If one of the parties to the proceedings considers it wrong, that party is quite at liberty to take the matter to a higher court and seek to have the decision in question changed by the appropriate means. 5 Finally, in view of the fifth question, we must also examine whether an individual who infringes a provision introducing a system of resale price maintenance applying to all parties to a transaction may claim before the national court that the provision is incompatible with Article 5, read in conjunction with Article 85, of the EEC Treaty. That question arises from the argument suggested by the accused in the main proceedings that, if Article 85 does not allow undertakings to create a comprehensive system of resale price-maintenance in a member-State, it cannot be regarded as acceptable, either, for the same effect, amounting, as it were, to a compulsory restrictive practice, to be produced by national legislation. The first point to be remembered here is that in its decisions on Article 5 the Court has held that the Article imposes a general obligation on member-States, the specific content of which depends, in each particular case, on the provisions of the Treaty or on the rules which may be deduced from its general framework as the case may be (decision in Case 2/73 at paragraph 4). The Court has also held that, although Article 86 is directed at undertakings, the second paragraph of Article 5 of the Treaty imposes a duty not to adopt or maintain in force any measure which might deprive Article 86 of its effectiveness; member-States are

under the duty not to enact measures enabling private undertakings to escape the constraints imposed on them by Articles 85 to 94 of the Treaty (paragraphs 31 to 33 of the decision in INNO v. A.T.A.B.). It is clear, however, that the view taken by the accused parties cannot be justified in this way; it is therefore not possible to accept that in a case such as this State measures must be judged by direct reference to Article 85 of the EEC Treaty. Apart from the statements in the decision in INNO v. A.T.A.B., this view is borne out not only by the fact that the case law on national price rules under examination with reference to Article 30 of the EEC Treaty would otherwise lose its meaning; reference may also be made to the judgment in Case 5/79, concerning national price-freezing *579 provisions, in which it was clearly held that, since there was no agreement between undertakings, the provisions of Article 85 could not be applied to such provisions adopted by the State. 6 The questions raised by the Arrondissementsrechtbank Utrecht may accordingly be answered as follows: (a) As far as concerns the question whether trade between member-States is restricted, Article 30 of the EEC Treaty has its own independent meaning. With regard to the effects mentioned, reference must not therefore be made to the case law on Article 85. On the contrary, Article 30 comes into play only where it is found that national measures are capable of hindering imports between member-States, directly or indirectly, actually or potentially. (b) Article 30 has application even if imports are hindered to only a slight extent by national measures. (c) When a provision such as that under investigation in the main proceedings is examined it is also necessary to consider whether still other barriers to trade exist on the relevant market. In particular, it must be determined whether, after other measures incompatible with the Common Market have been eliminated, it may still be assumed that the rules in question have adverse effects on trade between member-States. (d) A national provision amounting to a resale price maintenance system binding all the parties to a transaction must be judged only with reference to Article 30 and not to Article 85, read in conjunction with Article 5, of the EEC Treaty if there is no agreement between undertakings. JUDGMENT [1] By judgments of 1 June 1982, which were received at the Court on 14 July 1982, the Arrondissementsrechtbank, Utrecht, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a series of questions on the interpretation of Articles 5, 30 and 85 of the EEC Treaty. [2] Those questions arose in the context of criminal proceedings brought by the Officier van Justitie, Utrecht, against Kaveka de Meern BV, a company whose business is, in particular, the wholesale of tobacco products, and against its former general manager, Jan van de Haar.

[3] The first sentence of section 30 of the Wet op de Accijns van Tabaksfabrikaten (Act on the excise duty on tobacco products, hereinafter referred to as 'the Tobacco Excise Act') 1964 provides as follows: *580 It shall be an offence to sell, offer for sale or supply tobacco products to persons other than re-sellers at a price lower than that appearing on the excise label. [4] The accused are charged, inter alia, with having infringed the aforementioned provision by offering for sale tobacco products to persons other than re-sellers at prices lower than those appearing on the excise labels. [5] It appears from the documents before the Court that Kaveka's customers are re-sellers and persons who use the tobacco products which they buy for their own needs in the framework of their business or trade. Kaveka's business practice is not to check at the cash desk whether the customer is a re-seller of the tobacco products which he has in his trolley. The company consciously takes the risk that the buyer will not use the goods purchased by him for business or trade purposes. Kaveka operates a system of entrance cards under which businesses and institutions such as old peoples' homes can buy tobacco products from them. [6] The accused contended before the national judge that the alleged offences are not punishable since section 30 of the Tobacco Excise Act is contrary to Articles 5, 30 and 85 of the EEC Treaty. They contend that the abuse of a dominant position entailed by the compulsory price system may affect trade between member-States and impede imports. In addition, the fact that the excise duty is subject to an absolute minimum leads to the formation of an absolute minimum selling price, which is contrary to Article 30 of the Treaty. [7] The questions submitted by the Arrondissementsrechtbank, Utrecht, are as follows: 1. In several decisions on Article 30 of the EEC Treaty the Court of Justice has declared that any commercial provision adopted by the member-States which is capable of hindering intra-Community trade, directly or indirectly, actually or potentially, is to be considered a measure having an effect equivalent to quantitative restrictions. This formulation appears to come very close to what the Court has said with regard to the concept of 'agreements ... which may affect trade between member-States' within the meaning of Article 85(1) of the EEC Treaty in Cases 56 and 58/64 (Consten and Grundig v. EEC Commission [FN22]) and in Case 56/65 (Societe Technique Miniere v. Maschinenbau Ulm [FN23]), although the term used in those cases is 'may affect' trade between member-States whereas, for example, in the Dassonville judgment the term 'hinder' is used. In a case where the national court has to judge whether a legal provision of a member-State which applies without distinction to imported and domestic products is a measure having equivalent effect within the meaning of Article 30 of the EEC Treaty, must it in its judgment take into account the case law of the Court of Justice concerning Article 85 of the EEC Treaty and more particularly the interpretation given by the Court to the *581 expression 'may affect trade between member-States', from which it is clear that the criteria bringing the case within the prohibition of Article 85(1) are satisfied if it is established that a commercial provision is likely to deflect trade from its natural

course, or must the national court give a more independent meaning to Article 30 of the EEC Treaty to the effect that such a legal provision only constitutes a restriction on trade and thus a measure having equivalent effect within the meaning of Article 30 if the court is able to find on the basis of the factual circumstances that the importation of goods from other member-States may be restricted by that legal provision? FN22 [1966] E.C.R. 299, [1966] C.M.L.R. 418. FN23 [1966] E.C.R. 235, [1966] C.M.L.R. 357. 2. Must a legal provision of a member-State which applies without distinction to domestic and imported products also be regarded as a measure having equivalent effect within the meaning of Article 30 of the EEC Treaty where it is clear that that provision restricts imports into a member-State only to a very small degree and other possibilities remain for the marketing of products from other member-States? 3. Must the national court in its inquiry into the restrictive effects on trade of a legal provision which applies without distinction to the importation of products from other member-States and the marketing of domestic products have regard solely to the effects of that legal provision or must it also take account of the fact that other restraints on trade exist on the relevant market as a result of the tax laws of the member-States and the differences between them? 4. Does it make any difference to the reply to be given to the previous question if in the opinion of the national court the relevant legal provision has, taken by itself, no restrictive effect at all on trade? 5. If, as a result of a legal provision of a member-State, a system of vertical price-fixing exists to which all the traders concerned are bound and departure from which constitutes an offence, can an individual who has infringed such a provision rely before the national courts upon the incompatibility of that national provision with Article 5(2), in conjunction with Article 85, of the EEC Treaty?' The first and second questions [8] In the first question the national court asks whether, for the purpose of assessing, in the light of Article 30 of the Treaty, rules applicable both to imported and to domestic products, the criteria developed by the Court of Justice regarding Article 85, in particular with regard to the concept of effect on trade between member-States, should also be taken into account, or whether Article 30 is to be interpreted independently, only coming into consideration when it is established that the rules in question are of such a nature as to restrict imports. The second question seeks to ascertain, more particularly, whether such rules are even to be considered a measure having equivalent effect within the meaning of Article 30 of the Treaty where it is clear that they restrict imports only to a very small degree and other possibilities remain for the marketing of imported products.

*582 [9] The accused in the main proceedings and, to a certain extent, the Commission contend that Articles 30 and 85 of the Treaty cannot be interpreted differently with regard to the concept of effect on trade between member-States. The Dutch Government, on the other hand, argues that Articles 30 and 85 should be interpreted independently of each other. [10] At the hearing, however, the Commission qualified the view it had expressed in its written observations, and pointed out that, while the effects of national measures or agreements between undertakings which relate to the same economic facts must be analysed in the same way, the legal consequences may be different because the provisions at issue have their own internal logic and must be interpreted independently of each other. [11] It is important to bear in mind the context in which those two provisions of the Treaty are situated. Article 85 of the Treaty belongs to the rules on competition which are addressed to undertakings and associations of undertakings and which are intended to maintain effective competition in the Common Market. As the Court has held in previous judgments, that provision only comes into consideration with regard to agreements, decisions or practices restricting competition which appreciably affect intra-Community trade. [12] Article 30, on the other hand, belongs to the rules which seek to ensure the free movement of goods and, to that end, to eliminate measures taken by member-States which might in any way impede such free movement. Thus the Court has held that a national provision which is capable of hindering intraCommunity trade, directly or indirectly, actually or potentially, must be regarded as a measure having an effect equivalent to a quantitative restriction. [13] It must be emphasised in that connection that Article 30 of the Treaty does not distinguish between measures having an effect equivalent to quantitative restrictions according to the degree to which trade between member-States is affected. If a national measure is capable of hindering imports it must be regarded as a measure having an effect equivalent to a quantitative restriction, even though the hindrance is slight and even though it is possible for imported products to be marketed in other ways. [14] The reply to the first and second questions must therefore be that Article 30 of the Treaty, which seeks to eliminate national measures capable of hindering trade between member-States, pursues an aim different from that of Article 85, which seeks to maintain effective competition between undertakings. A court called upon to consider whether national legislation is compatible with Article 30 of the Treaty must decide whether the measure in question is capable of hindering, directly or indirectly, actually or potentially, intra-Community trade. That may be the case even *583 though the hindrance is slight and even though it is possible for imported products to be marketed in other ways. Third and fourth questions [15] These questions concern the compatibility with Article 30 of the Treaty of a national legislative provision such as section 30 of the Dutch Tobacco Excise Act, in so far as it imposes, in the case of sales to the consumer, a selling price

fixed by the manufacturers or importers. The national court wishes to ascertain, in particular, whether the issue of compatibility must be resolved in the light of the effects of such a provision taken in isolation or whether account should be taken of the existence of other hindrances to trade caused by the differing fiscal legislation of the member-States, even though the provision at issue is not in itself deemed to have any restrictive effect on trade. [16] The national court states that in order to ensure the levying of excise duties on tobacco products a system of excise labels is operated. Retail sales of tobacco products must be made at the price appearing on the excise label. The price is freely determined by the importer or by the domestic manufacturer. The importer is free to determine his prices without reference to the foreign manufacturer. The assortment of excise labels offers many possibilities and in practice permission to alter the price on the label is always granted on request. Excise labels are obtainable by any person, subject to the conditions laid down by revenue law, the principal requirement being one of registration. [17] The Tobacco Excise Act permits a foreign producer to market the same tobacco product in the Netherlands at different prices. However, it does not appear that in practice the same brand has been imported by more than one firm. [18] The prohibition laid down in section 30 of the Tobacco Excise Act applies without distinction to domestic and imported products. Competitive pricing in respect of a particular product at the retail stage is therefore impossible. Competition is, however, possible at the intermediate stage as a result of various reductions and discounts. Furthermore, competition is also possible by means of advertising and promotions. The introduction of new brands is increasingly based on quality and taste. [19] In its judgment of 24 January 1978 (Case 82/77, Openbaar Ministerie v. Van Tiggele [FN24]), the Court held that, whilst national price control rules applicable without distinction to domestic products and imported products cannot in general produce an effect equivalent to quantitative restrictions within the meaning of Article 30 of the Treaty, they may do so in certain specific cases. Thus imports may be impeded when, for example, a national authority fixes prices or profit margins at such a level that imported *584 products are placed at a disadvantage in relation to identical domestic products, either because they cannot profitably be marketed in the conditions laid down or because the competitive advantage conferred by lower cost prices is cancelled out. FN24 [1978] E.C.R. 25, [1978] 2 C.M.L.R. 528. [20] As regards the fixing of prices and the taxation of tobacco products, the Court held, in its judgment of 16 November 1977 (Case 13/77, INNO v. A.T.A.B. [FN25]), that in the present state of Community it is for each member-State to choose its own method of fiscal control over tobacco products on sale in its territory and that a system whereby the prices are freely chosen by the manufacturer or the importer as the case may be and imposed on the consumer by a national legislative measure, and whereby no distinction is made between domestic products and imported products, generally has exclusively internal

effects. FN25 [1977] E.C.R. 2115, [1978] 1 C.M.L.R. 883. [21] However, as the Court pointed out in the same judgment, the possibility cannot be excluded that in certain cases such a system may be capable of affecting intra-Community trade. If therefore imports and exports of tobacco products are subject to obstacles due to the different methods of fiscal control used by the member-States to ensure collection of the taxes on those products, it is necessary to decide whether such a system of fixed prices imposed on the consumer for reasons of fiscal control is or is not of itself of such a nature as to allow imported products to be profitably marketed or to allow a possible competitive advantage to be obtained as a result of the lower production costs of imported products compared to domestic products. [22] Consequently, in order to decide whether legislation of a member-State which, as regards the sale of tobacco products to the consumer, imposes a fixed price freely chosen by the manufacturer or importer constitutes a measure having an effect equivalent to a quantitative restriction, the national court must investigate whether, having regard to the fiscal restraints on trade in the products concerned, such a system of imposed prices is in itself likely to hinder, directly or indirectly, actually or potentially, trade between member-States. Fifth question [23] In its fifth question the national court asks whether a private individual may rely, before a national court, on the incompatibility of a national provision with the provisions of Article 5(2) and Article 85 of the Treaty read together. [24] Whilst it is true that member-States may not enact measures enabling private undertakings to escape the constraints imposed by Article 85 of the Treaty, the provisions of that Article belong to the rules on competition ' applying to undertakings' and are thus intended to govern the conduct of private undertakings in the *585 Common Market. They are therefore not relevant to the question whether legislation such as that involved in the cases before the national court is compatible with Community law. Costs [25] The costs incurred by the Commission of the European Communities, which submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the prosecutions pending before the national court, the decision as to costs is a matter for that court. Order On those grounds, THE COURT (First Chamber), in answer to the questions

referred to it by the Arrondissementsrechtbank, Utrecht, by judgments of 1 June 1982, HEREBY RULES: 1. Article 30 of the EEC Treaty, which seeks to eliminate national measures capable of hindering trade between member-States, pursues an aim different from that of Article 85, which seeks to maintain effective competition between undertakings. A court called upon to consider whether national legislation is compatible with Article 30 of the Treaty must decide whether the measure in question is capable of hindering, directly or indirectly, actually or potentially, intraCommunity trade. That may be the case even though the hindrance is slight and even though it is possible for imported products to be marketed in other ways. 2. In order to decide whether legislation of a member-State which, as regards the sale of tobacco products to the consumer, imposes a fixed price freely chosen by the manufacturer or importer constitutes a measure having an effect equivalent to a quantitative restriction, the national court must investigate whether, having regard to the fiscal restraints on trade in the products concerned, such a system of imposed prices is in itself likely to hinder, directly or indirectly, actually or potentially, trade between member-States. 3. The provisions of Article 85 of the EEC Treaty are not relevant to the question whether legislation such as that involved in the cases before the national court is compatible with Community law. (c) Sweet & Maxwell Limited [1985] 2 C.M.L.R. 566 END OF DOCUMENT