61989C0287

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Mr President,

Members of the Court,

1. In Belgium the levying of excise duty on cigarettes is ensured by means of tax stamps which are compulsorily affixed to the packets, and which state the price, inclusive of taxes, at which those packets are sold by retail. The importer or manufacturer, who pays the tax on ordering the stamps from the tax authorities, must indicate a selling price coming within the framework of a scale fixed by Decree of the Minister of Finance.

2. It is that system which is at the origin of the present action. Bene BV, which wished to import into Belgium cigarettes at a price lower than the lowest price set out in the scale, was refused stamps bearing the price at which it wished to sell its products. After repeated attempts, it finally lodged a complaint with the Commission.

3. The Commission has brought an action against the Kingdom of Belgium for failure to fulfil its obligations, with a view to obtaining a declaration that the authorities of that country have infringed Article 30 of the EEC Treaty.

4. The Commission contends that, by their action, the authorities of the defendant Government subject cigarettes in practice to a minimum retail selling price. The Court has consistently held (1) that, if such measures, which are applicable without distinction to national products and to imported products, are not in themselves contrary to Article 30 of the Treaty, they become so in so far as they prevent the lower cost price of imported products from being reflected in the selling price to the consumer.

5. The Commission takes the view that that is very clearly so in the instant case. I fully share that view. With regard, in particular, to the manufactured tobacco sector, the Court has held that the national system of price structures must allow "a possible competitive advantage to be obtained as a result of the lower production costs of imported products compared to domestic products" (2) and that the fixing of those prices by the national authorities may well "restrict the freedom of importation of tobacco originating in other Member States" and is, therefore, contrary to Article 30. (3)

6. I do not consider it necessary, therefore, to devote lengthy argument to this case, the more so since I am of the opinion that the applicant refutes, in a perfectly convincing manner, the arguments put forward by the defendant. Accordingly, I shall confine myself to dealing with two of them, referring, for the remainder, to the position taken by the Commission.

7. First of all, I shall examine the argument which the Belgian Government derives from Council Directive 72/464/EEC of 19 December 1972 on taxes other than turnover taxes which affect the consumption of manufactured tobacco (Official Journal, English Special Edition 1972 (31 December) L 303, p. 1), in the version as amended by Council Directives 77/805/EEC of 19 December 1977 (Official Journal L 338, p. 22) and 86/246/EEC of 16 June 1986 (Official Journal L 164, p. 26).

8. That directive, issued on the basis of Articles 99 and 100 of the Treaty, is intended to harmonize taxes other than VAT affecting the consumption of manufactured tobacco in conditions allowing at the same time healthy competition and the free movement of the products within the Community to be ensured.

9. Since the Commission does not allege any infringement of that directive, it seems at first sight unnecessary to discuss the subject. The defendant, however, explicitly argues in its rejoinder that it cannot have infringed Article 30 of the Treaty, since it has acted in accordance with Article 5 of the directive, which is drafted as follows:

"1. Manufacturers and importers shall be free to determine the maximum retail selling price for each of their products. This provision may not, however, hinder implementation of the national systems of legislation regarding the control of price levels or the observance of imposed prices.

2. However, in order to facilitate the levying of the excise duty, the Member States may, for each group of manufactured tobacco, fix a scale of retail selling prices on condition that each scale has sufficient scope and variety to correspond in fact with the variety of Community products. Each scale shall be valid for all the products belonging to the group of manufactured tobacco which it concerns, without distinction on the basis of quality, presentation, the origin of the products or of the materials used, the characteristics of the undertaking or of any other criterion."

10. Citing paragraph 2 of Article 5, the Belgian Government asserts that its scale has sufficient scope to satisfy normal demand. Indeed, with the exception of the case mentioned by the Commission, no problem has ever arisen.

11. That argument cannot be upheld, for it follows from the aforementioned provision that each scale must "correspond in fact with the variety of Community products". The present action is caused precisely by the fact that the Belgian scale does not contain, towards the bottom end, sufficient levels to accommodate the products actually offered by Bene.

12. Furthermore, it must be emphasized that paragraph 2 of Article 5 must clearly be read subject to paragraph 1, which fixes the general principle according to which importers shall be free to determine the maximum retail selling price for each of their products. The system of scales refers only to "facilitat[ing] the levying of the excise duty". The Belgian authorities have thus committed an error of law by considering that it was possible, on the basis of paragraph 2, to derogate from paragraph 1.

13. Finally, I would be compelled to reject that argument in so far as it amounts to asserting that Article 5 of the directive constitutes a derogation from Article 30 of the Treaty. It is obvious that a provision in a directive may neither be substituted for a provision of the Treaty nor be interpreted as authorizing a pricing system contrary to the criteria laid down by the case law of the Court concerning that provision.

14. As, in any case, I consider that Belgium has not observed Article 5 of the directive, I invite you also to find that there has been an infringement of that provision, for it is not to rule outside the scope of the application merely to declare that a given practice contravenes at the same time a provision of the Treaty and a provision of a directive.

15. The defendant contends, moreover, that its rules are necessary to maintain healthy competition on the market, and asserts that it refused the stamps because the undertaking concerned did not prove that its prices complied with the legislation on commercial practices. It is referring here, no doubt, to the "fairness of commercial transactions" which the Court (4) considered in the "Cassis de Dijon" case as a mandatory requirement capable of justifying restrictions on the free movement of goods.

16. It must be emphasized, however, that when a Member State imposes a restriction on the free movement of goods, it is for that Member State to prove that that restriction is justified by one of the mandatory requirements laid down by case law. The Belgian authorities merely state that Bene' s cost prices, as communicated to the Court, were much lower than those which other cigarette producers forwarded to the authorities. Even supposing that to be true, it does not suffice to prove that the firm in question is selling at a loss or that it is adopting other practices of unfair competition.

17. In conclusion, I invite you to declare that, by refusing to supply an importer of manufactured tobacco with tax stamps at prices lower than the lowest price provided for in the scale decreed by the Minister of Finance, the Kingdom of Belgium has failed to fulfil its obligations under Article 30 of the EEC Treaty and Article 5 of Council Directive 72/464/EEC of 19 December 1972 on taxes other than turnover taxes which affect the consumption of manufactured tobacco. Consequently, the defendant must also be ordered to pay the costs.

(*) Original language: French.

(1) See, for example, judgment in Case 82/77 van Tiggele [1978] ECR 25.

(2) See, for example, judgment in Cases 177 and 178/82 Kaveka [1984] ECR 1797, paragraph 21.

(3) See judgment in Case 90/82 Commission v France [1983] ECR 2011, paragraph 27.

(4) See judgment in Case 120/78 Rewe [1979] ECR 649.