On 21 April 2016, Advocate-General Nils Wahl (the “AG”) handed down his opinion in response to a request for a preliminary ruling addressed to the Court of Justice of the European Union (the “ECJ”) by the Brussels Court of Appeal (the “Court of Appeal”) regarding the compatibility with European law of the Belgian rules requiring retailers to respect minimum prices for manufactured tobacco (Case C-221/15, Openbaar Ministerie v. Établissements Fr. Colruyt NV).
The reference was made in criminal proceedings against Colruyt. The supermarket chain had sold tobacco products at a unit price below the price indicated on the revenue stamp affixed by the manufacturer or importer and had applied several types of discounts to tobacco products. However, Belgian rules governing tobacco prohibit the advertising and sponsoring of tobacco products, including any communication or act which is directly or indirectly aimed at promoting sales. This rule is understood also to prohibit the application of retail prices for tobacco products which are lower than the price featuring on the revenue stamp. Following a finding of infringement at first instance, Colruyt appealed to the Court of Appeal, which decided to stay the proceedings and refer a preliminary question to the ECJ (See, VBB on Belgian Business Law, Volume 2015, No. 8, p. 9, available at www.vbb.com).
The Court of Appeal asked the ECJ to assess the national measure under three sets of rules: (i) Article 15(1) of Directive 2011/64/EU of 21 June 2011 on the structure and rates of excise duties applied to manufactured tobacco (the “Directive”); (ii) the principle of free movement of goods laid down in Article 34 of the Treaty on the Functioning of the European Union (“TFEU”); and (iii) the competition rules, in particular Article 101 TFEU, read in conjunction with Article 4(3) of the Treaty on the European Union (principle of sincere cooperation).
In his opinion, the AG found that national rules such as those at hand do not infringe any of the above rules. First, as regards Article 15(1) of the Directive, the AG held that the Directive does not prevent EU Member States from restricting the retailers’ freedom to determine prices. EU Member States only have to respect the pricing autonomy of tobacco producers and importers. Second, according to the AG, the price restrictions do not restrict the free movement of goods between EU Member States as they (i) constitute pure selling arrangements which do not affect the characteristics that tobacco products must have in order to be marketed in Belgium; and (ii) are evenly applied to all traders, as well as to the marketing of domestic products and that of products from other EU Member States. Third, for legislative measures to give rise to an infringement of the competition rules, evidence is needed that such rules require or encourage the conclusion of anticompetitive agreements or reinforce their effect. There may also be a violation of the competition rules if a EU Member State deprives its own rules of the character of legislation by delegating to private economic operators the responsibility for taking decisions affecting the economic sphere. The AG was of the opinion that none of these circumstances applied to the case at hand.
The AG thus confirms the analysis under EU law of the court of first instance, which imposed a fine of EUR 270,000 on Colruyt for having offered unlawful price reductions on tobacco products (See, VBB on Belgian Business Law, Volume 2015, No. 8, p. 9, available at www.vbb.com). The judgment of the ECJ should be expected later this year. If the ECJ follows the AG’s opinion, Colruyt’s appeal will likely be dismissed and the judgment of the court of first instance will thus be confirmed.
