Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein

Introduction

This topic is about the free movement of goods, which is one of the four fundamental freedoms set out by the European treaties to facilitate and promote the EU as a common market, now internal market. The other freedoms referred to are the free movement of persons, services and capital. With the free movement of goods, the aim was to ensure goods could move freely throughout the European Union. This meant that where the EU had not provided common rules to apply across the Member States existing national regulations in relation to goods needed to ensure they were in keeping with the overall European aim of free movement.

Outline of issue raised by case

In the case of Cassis de Dijon the ECJ was asked to make a preliminary ruling on the interpretation of Articles 30 and 37 of the EEC Treaty when applied to the German Law on the Monopoly in Spirits, specifically Article 100 (3) which fixed a minimum alcohol content for products to meet before they could be marketed in their country. The issue was whether that fixed German national rule could be said to, firstly, be considered a measure which amounted to a quantitative restriction on imports as prohibited by Article 30 EEC (now Article 34 TEU) and secondly, whether such fixing came within the concept of discrimination regarding the conditions under which goods are procured and marketed as set out under Article 37 EEC (now Article 37 TEU).

Facts

Rewe-Zentral AG was a company that requested authorisation from Bundesmonopolverwaltung für Branntwein (a German administration for spirits), to import from France a liqueur called ‘Cassis de Dijon’, containing a volume of 15 to 20% alcohol, into the German market. The response was that authorisation was not required, however they advised that the product ‘Cassis de Dijon’ could not be marketed in Germany as there was a national rule which required fruit liqueur to have at least 25% alcohol content. The company, Rewe-Zentral then brought proceedings against that decision in the national courts and the national courts referred to the European Court of Justice for further guidance. The questions asked were for an interpretation of Articles 30 and 37 of the EEC Treaty to assess whether the national provision was compatible with Community law.

Decision / Outcome

There were no common rules applicable to the production and marketing of alcohol and therefore the Member States were free to regulate the matters in their own territory. Differences between national laws may be accepted where they are considered necessary to satisfy mandatory requirements relating to the effectiveness of fiscal supervision, the protection of public health, fairness of commercial transactions and the defence of the consumer. The German government attempted to put forward such justifications, however they were not accepted in the circumstances and it was found that fixing minimum alcohol content constituted an obstacle to trade which was incompatible with Article 30 EEC.

The Court ruled that the concept of measures having an effect equivalent to quantitative restrictions on imports contained in Article 30 EEC is to be understood to mean that fixing a minimum alcoholic content for beverages by the legislation of a Member State falls within the prohibition when the importation of a product, which is lawfully produced and marketed in another Member State is concerned.

They also concluded that the matter did not constitute discrimination as set out in Article 37 EEC because the same rule was applied equally to both national and foreign products and this was not a matter which concerned exercise by a public monopoly of its specific function. Therefore the question of interpreting the national law in light of Article 37 EEC was not relevant.

Implications

The case of Cassis de Dijon is regarded as a leading case in the area of free movement of goods. The Court had developed an innovative way of reconciling national differences and making them compatible with EU law by developing the principle of mutual recognition. In this way the French standard of 15 to 20% alcohol content needed to be accepted as equivalent to the German standard of 25%. However, the Member State is able to put forward a justification for any difference by demonstrating that a mandatory requirement applies, this is known as the Cassis de Dijon rule of reason which together with the principle of mutual recognition described.

This approach was a contrast to the earlier decision in Dassonville where the Court had said that all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially intra-Union trade are to be considered as measures having an effect equivalent to quantitative restrictions. The Dassonville approach meant that traders started to challenge every national law that stopped them in any way and therefore the Court started to face difficulties in having to continually analyse the many different types and styles of national legislation. Therefore Cassis de Dijon was a crucial development and it was a decision which aimed to strike the right balance between achieving the free movement of goods whilst also giving Member States sufficient flexibility to ensure their national interests were factored in.

However, the case needed to be ring fenced to the area of products and this occurred in the case of Keck which was to do with selling arrangements. The legal basis for this was questioned by academics although the outcome was welcomed by many states. It should be noted that although the justifications put forward by Germany in this case were not accepted by the Court, in subsequent cases other Member States have been successfully in applying mandatory requirements to enable a difference in national rules to prevail, for example in Minister of Justice v Kramer environmental protection and conservation of the resources of the sea were accepted as interests worthy of protection.

Conclusion

Overall, it can be said that this decision provided the necessary legal tool to ensure free trade in goods in the Community continued. In the area of free movement of goods therefore there can be positive harmonisation on topics to ensure there is legislation to ensure positive integration, alternatively, case law can be used, as happened here to use negative integration by overriding national legislation which hindered a common approach.

Bibliography

Books

Foster, N EU Law (4th edn OUP, Oxford 2013)

Hargreaves, S and Homewood, M EU Law Concentrate (3rd edn OUP, Oxford 2013)

Kaczorowska, A European Union Law (Routledge 2008)

Cases cited

Dassonville Case 8/74, [1974] ECR 837

Keck Joined Cases C-267 and 268/91 [1993] ECR I-6097

Minister of Justice v Kramer [1976] ECR 1279

Journals

Barnard, C Competence Review: the internal market (HM Government of Balance Competence Review, 2014) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/226863/bis-13-1064-competence-review-internal-market.pdf (Accessed 12 July 2015)

Legislation cited

Article 30 EEC Treaty

Article 37 EEC Treaty

Article 100 (3) German Law on the Monopoly in Spirits

Footnotes

Paragraph 3 and 4 of Judgment

Paragraph 5 of Judgment

Paragraph 5 and 6 of Judgment

Paragraph 13 and 14 of Judgment

Paragraph 15 of Judgment

Paragraph 7 of Judgment

Sylvia Hargreaves and Matthew Homewood, M EU Law Concentrate (3rd edn OUP, Oxford 2013) p. 103

Case 8/74, [1974] ECR 837

Joined Cases C-267 and 268/91 Keck and Mithouard [1993] ECR I-6097

[1976] ECR 1279

Nigel Foster, EU Law (4th edn OUP, Oxford 2013)  p .265

Alina Kaczorowska, European Union Law (Routledge 2008) p.537