C-152/78

composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges,

Advocate General: G. Reischl Registrar: A. Van Houtte

gives the following

COMMISSION v FRANCE

JUDGMENT

Facts

Group 2 (Order No 60-1253 of 29 Article L 17(1) (Order No 59-107 of November 1960): undistilled fermented 7 January 1959): beverages namely wine, beer, cider, perry and mead, to which are added natural sweet wines coming under the tax No person shall engage in advertising of arrangements applying to wine as well as any kind in respect of beverages the blackcurrant liqueurs and fermented fruit manufacture and sale of which are or vegetable juices containing 1 to 3° of prohibited or of beverages comprised in alcohol; the fifth group.

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of which are not prohibited shall be By letters of 18 September and 4 permitted if it indicates exclusively the November 1975 the Commission name and composition of the product, requested the French Government to the name and address of the manu- state its views on the compatibility of the facturer, his agents and stockists. disputed rules with Article 30 et seq. of the EEC Treaty. The Commission itself The type of bottling and labelling may thinks that the provisions of Articles L 17 be reproduced only if it bears exclusively and L 18 of the Code on the retail sale the name and the composition of the of beverages and on measures against product, the name and address of the alcoholism are capable of impeding, manufacturer, his agents and stockists. directly or indirectly, actually or potentially, imports of alcoholic beverages into France from other No person shall engage in advertising of Member States and that, unless they are any kind in respect of matters other than

By a letter of 14 June 1976 the In its Recommendation No 70/125 of 22 Commission requested the French December 1969 on the adjustment of the Republic pursuant to the first paragraph State monopoly of a commercial of Article 169 of the EEC Treaty to character in alcohol (Official Journal, submit its observations to it on the English Special Edition (Second Series) breach of 'the Treaty with which it was VI, p. 27) the Commission drew the charged. The Commission contended in attention of the French Republic to the that letter that although the rules in fact that the national rules on the question did not make any formal advertising of alcoholic drinks placed a distinction in regard to the origin of the handicap on certain spirits and spirituous products they still prescribed more beverages traditionally considered as the stringent treatment for certain beverages, produce of other Member States and the most of which were produced in other Commission invited it to remove the Member States, whereas that difference discrimination which existed in that in treatment did not appear to be regard. justified on objective grounds.

II — W r i t t e n p r o c e d u r e IV — S u b m i s s i o n s and a r g u m e n t s of the p a r t i e s in the c o u r s e of the w r i t t e n p r o c e d u r e The Commission did not receive any subsequent communication from the French Government and by an The Commission does not deny that in application lodged on 6 July 1978 it the absence of any Community rules therefore brought an action pursuant to Member States retain the power to the second paragraph of Article 169 of introduce trade rules in order to achieve the EEC Treaty in respect of the alleged an object affecting matters left to them failure of the French Republic to fulfil its by the Treaty. However, such rules, obligations under Article 30 of the EEC applying to national products and Treaty in regard to the advertising of products imported from other Member alcoholic beverages. States alike, may not make imports either impossible or more difficult or onerous in comparison with the marketing of The written procedure followed the national products unless that is necessary normal course. to achieve the legitimate object intended and so long as that object cannot be On hearing the report of the Judge- achieved by other means which impose Rapporteur and the views of the less of an obstacle on trade. More

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specifically, Member States retain the cherry liqueurs, the alcohol content of power to protect public health by means which may not exceed 18°, are classified of measures intended to combat in the third group on which there are alcoholism and the regulation of advertising restrictions. Those two advertising with regard to the harm- liqueur categories contain sugar in fulness of alcoholic beverages is amongst equivalent quantities and are both subject the means available to the French to the same habits of consumption; Government to achieve legitimate however, without any apparent jus- objectives. However, by Article 36 of the tification liqueurs of less than 18° are EEC Treaty such measures must not treated more stringently than liqueurs of "constitute a means of arbitrary discrimi- more than 18°. nation or a disguised restriction on trade between Member States".

(b) Thus, liqueurs of more than 18° which are sweetened with sugar, glucose Spirits obtained from tubers, such as or honey, such as Cointreau, Grand aquavit or geneva and grain spirits, such Marnier or Grande Chartreuse, which as whisky, gin and schnapps, belong to are national products, belong to the the fifth group which is subject to a total fourth group on which there is no prohibition on advertising, whilst rum specific advertising restriction, whilst and alcoholic beverages obtained from strawberry, raspberry, blackcurrant and the distillation of wines, such as

COMMISSION v FRANCE

The fact that aniseed-based aperitifs are (e) It might be objected against the classified in the fifth category is attri- scientific arguments put forward by the butable to the presence of the constituent French Government on the different anethol which is considered by the levels of harmfulness of the products French Government to be particularly concerned that in certain Member States harmful; the classification in that the time at which alcohol is taken and

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That classification in fact arbitrarily equates the definition of aperitifs with (f) The fact that per head France is the that of drinks taken on an empty largest consumer of alcohol in the world stomach. It is difficult, for example, to may be due in particular to the glaring think of a drink such as whisky as being ineffectiveness of its rules on the consumed on an empty stomach whilst, advertising of alcoholic beverages; of all even before meals, it is in fact consumed alcoholic beverages consumed in France diluted with three parts of water and in 1975 those beverages on which there taken with foods which traditionally are no advertising restrictions at all accompany aperitifs; furthermore it is totalled more than 90% the great customarily followed immediately by a majority of which is made up of meal and thus reaches the digestive domestic products; on the other hand, organs together with drinks taken during those beverages for which advertising is or at the end of a meal. When whisky is ` prohibited account for only 8% of diluted to quarter strength the amount of national consumption and include grain alcohol absorbed in the bloodstream is spirits, like whisky, virtually all of which reduced by half and is then about the are imported. same as in the case of wine.

In actual fact the distinction between Therefore the rules complained of not aperitifs and drinks taken after meals is only prove inappropriate in regard to the really valid only in regard to alcoholic very criteria of harmfulness which are beverages which are drunk on an empty their basis, they also involve effects on stomach and not followed by a meal; yet trade which are disproportionate to their no alcoholic beverage answers to that level of effectiveness in achieving the

intended aim of curbing alcoholism. rules in question my appear in theory, by They therefore constitute a measure referring to national, often conflicting, having an effect equivalent to a customs which necessarily help to quantitative restriction on imports promote the consumption of national contrary to Article 30 of the EEC products, that approach takes the form Treaty. in practice of a pattern of discriminatory treatment between national products and imported products which is not objectively justified and which thereby constitutes arbitrary discrimination (g) The distinctions made by the within the meaning of the second French rules, which cannot be justified sentence of Article 36 of the EEC by the degree of harmfulness of the Treaty. drinks concerned, may moreover tend to promote certain trade patterns to the detriment of others, whilst putting products which are typically French at an The Government of the French Republic advantage. All that matters, in this insists that the national legislation respect, are the effects which the rules in contested by the Commission constitutes question have; motives are not on trial. a coherent entity that it has been formulated without any intention of discriminating against foreign produce and that is intended, as far as advertising is concerned, to protect public health (h) The growing number of imports and to curb alcoholism in France. The into France of certain products from scourge of alcoholism is particularly other Member States does not alter the disturbing in France which, per caput, is Commission's views on the matter. the heaviest consumer of alcohol in the world; the results of that state of affairs justify the French legislature in taking steps to cut back the consumption of alcohol. Under the Court's case-law the potential restrictive effect and not the real effect on trade should be taken into consideration for the purpose of applying the provisions of Article 30 as well as of The ability of a Member State to adopt Article 12. Besides, the possibility that if legislation restricting advertising in order rules such as those at issue in this case to contain the spread of alcoholism is not did not exist, the imports would be still in dispute; this is possible under the first greater cannot be ruled out. An sentence of Article 36 of the EEC equivalent effect is defined as being the Treaty. The issue in this case is whether effect which, but for the disputed the French legislation has been drafted in measure, would have resulted from a discriminatory way, as the Commission imports, assuming that those imports had contends, in such a way as to penalize been made. foreign products as against French products, and whether, as a result, it offends against the second sentence of Article 36. That is, however, not the case; foreign products are not treated (i) In the final analysis, however more stringently than national products attractive the approach adopted by the and alcoholic beverages are genuinely

classified according to the risk which (b) The actual fact that there is a clas- they consitute in regard to alcoholism. sification of different alcoholic beverages is not at issue in this case; the difference of opinion between the Commission and the French Republic arises from the (a) The classification of drinks into five concept of harmfulness, which is the categories does not entail treating only criterion related to objectives of foreign products more stringently. public health which is capable of justifying the splitting-up of the various beverages into different categories. The two categories of alcoholic beverages for which advertising is restricted, namely the third and fifth, include as many French products as The Commission wishes to confine its foreign products, if not more. assessment of harmfulness to the sole criterion of alcohol content, with some regard also to the content of sugar and It is true that third group includes wine- essential oils; that concept of harm- based aperitifs such as Byrrh, Ambas- fulness should be assessed according to sadeur, Cinzano and Martini; but it the national context and on a broader should be stressed that those drinks are basis than that adopted by the French produce. Moreover, the fruit Commission. liqueurs sold on the French market are in the main produced by French companies. The pure alcohol content of a drink is certainly an important criterion in As regards the alcoholic drinks in the assessing its harmfulness. However, in fifth group, the advertising of which is any given society, it is not possible to prohibited, the fact should not be adhere purely to alcohol content in order overlooked that, first, as far as geneva to assess the harmfulness of a product; spirits are concerned, more than half of account must also be taken of the whole such spirits, such as gin, consumed in of the pattern of consumption which France are produced in France and that helps to produce the effects of the drink there is some national production of on the body. whisky, admittedly limited but none the less real, and secondly and above all that the fifth group basically covers all aniseed-based aperitifs which are Apart from regional or social habits of consumed in France in incomparably consumption, taste itself may be a greater quantities than whisky or gin. All determining factor in regard to the the companies which manufacture volume and the pattern of consumption aniseed-based drinks are French of an alcoholic beverage. Taste is derived companies. from non-alcoholic, volatile compounds which, when combined, give the "flavour" of the distillate, that is to say, Those two examples demonstrate the the organoleptic qualities in which are superficiality of the complaints made by combined the taste, aroma and smell of the Commission when it indicates that the liquid consumed. The chemical the French legislation was drafted in composition of the products varies and order to protect French alcoholic those qualities lead to different beverages from foreign competition. behaviour as regards consumption; it

The patterns of consumption affect, first, (c) When presented in this way the time at which the drinks under the French legislation is consistent consideration are consumed; scientific throughout. As they correspond to experts unanimously agree that the time different habits of consumption, the at which and the circumstances in which drinks in the third and fourth groups alcoholic substances are consumed are have different effects from the point of decisive as to the effects of alcohol on view of public health and are therefore the body. Thus it has been scientifically logically classified in different categories. proved that alcoholic beverages consumed on an empty stomach are particularly harmful, especially in the case of strong, undiluted spirits such as (d) In regard to the special cases of whisky and grain spirit with ice. That rum and cognac the statements of the justifies the stringency of the French Commission contain serious factual legislature in regard to the so-called errors. It is statistically established that "aperitif" drinks, in other words those rum is largely consumed in culinary consumed on an empty stomach, as dishes and that its consumption neat, on compared to "digestive" drinks an empty stomach, is of small pro- consumed at the end of meals and in portions. Likewise, more than 90% of which the content of non-alcoholic cognac and armagnac are not taken on constituents makes the consumption of an empty stomach but used for digestive large quantities physically impossible. or culinary purposes; despite the advertising campaign to which the Commission refers the consumption of cognac as an aperitif has remained That distinction between aperitif and insignificant. In contrast, spirits obtained digestive drinks corresponds to the from tubers or grain which also have a consumption of alcoholic beverages in high alcoholic strength, are most often France; in contrast to alcoholic drunk on an empty stomach or at the beverages and liqueurs taken after meals, beginning of meals. It is for that reason the bulk of consumption tends to be that such spirits, French or foreign, are

(f) In point of fact it should be During a fresh sitting held on 12 remembered in particular that although it December 1979 the Government of the is correct that 90% of alcoholic French Republic, represented by Noël beverages consumed in France enjoy Museux, indicated to the Court that a unrestricted advertising that figure draft law introducing new rules on merely represents the preponderance of advertising relating to alcoholic wines of which France is one of the beverages had been drawn up and largest producers in the world; on the submitted to the Commission and that it other hand the greater part of the 8% of was possible that it might be adopted by the products to which the prohibition on the French Parliament during its next advertising applies, is made up of French session; consequently the French products (aniseed-flavoured) or products Government requested the Court for manufactured in France. It is not further postponement of the case. The therefore possible to draw from these Commission, represented by René- statistics the conclusions put forward by Christian Béraud, stated that it did not the Commission. have any objection to the request that the oral procedure be postponed. The Court acceded to the request. Furthermore, the creation of the fifth category, entailing a prohibition on advertising, is not attributable to any The Commission, represented by René- intention to cut down the presence of Christian Béraud, and the Government anethol or any other constituent. of the French Republic, represented by

COMMISSION v FRANCE

Decision

1 By an application of 6 July 1978 the Commission brought an action under Article 169 of the E E C T r e a t y for a declaration that the French Republic, by subjecting advertising in respect of alcoholic beverages to discriminatory rules and thereby maintaining obstacles to the freedom of intra-Community trade, has failed to fulfil its obligations u n d e r Article 30 of the E E C Treaty.

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2 The action is directed more specifically against Articles L 17 and L 18 of the Code des Débits de Boissons et des Mesures contre l'Alcoolisme [Code on the retail sale of beverages and on measures against alcoholism], hereinafter referred to as "the Code", which are intended to regulate advertising in respect of alcoholic drinks. The Commission contends that those rules have been so formulated that advertising in respect of certain imported alcoholic products is prohibited or subject to restrictions whilst it is completely unre- stricted in regard to competing national products. This discriminatory effect is the result of the division of alcoholic beverages into categories in Article L 1 of the Code and the different way in which those provisions regulating advertising are made to apply to those categories. Those restrictions on the marketing of the products in question originating from other Member States are, it is claimed, to be regarded as measures having an effect equivalent to quantitative restrictions and as such are prohibited by Article 30 of the EEC Treaty.

3 Article L 1 on the Code divides beverages into five groups for the purpose of regulating their manufacture, sale and consumption; the first of those groups covers non-alcoholic beverages and the others alcoholic beverages. The latter groups are defined in these terms by Article L 1 :

5 Under the terms of Article L 18 advertising in respect of drinks in Group 3 is permitted if it indicates exclusively the name and composition of the product and the name and address of the manufacturer, his agents and stockists. The type of bottling and labelling may be reproduced only if it gives no other information than that just mentioned. The result of Article L 1 is that those rules restricting advertising affect natural sweet wines other than those classified in Group 2, liqueur wines, wine-based aperitifs and strawberry, raspberry, blackcurrant or cherry liqueurs not exceeding 18° of pure alcohol.

6 Since there are no restrictions on them, the alcoholic beverages in Groups 2 and 4, that is to say, first, wine, beer, cider, natural sweet wines coming under the tax arrangements applying to wine, as well as blackcurrant liqueurs and fermented fruit juices and, secondly, rums, tafias, spirits obtained from the distillation of wines, ciders, perries or fruits, and sweetened liqueurs, may be freely advertised.

7 The Commission thinks that the classification contained in Article L 1 together with Articles L 17 and L 18 causes many imported products to be put at a disadvantage, as far as advertising is concerned, compared to the competing national products.

8 It points out, in particular, that under this system natural sweet wines coming under the tax arrangements applying to wine — a benefit given only to national sweet wines — also enjoy the benefit of completely unrestricted advertising whilst imported natural sweet wines and liqueur wines are subjected to a system of advertising restrictions.

1 2 In this respect the French Government contends that significant categories of French drinks are also covered by the prohibitions and restrictions on advertising criticized by the Commission. For example, aniseed-flavoured alcoholic beverages, consumed in particularly large quantities in France, may not be advertised in any way, as is the case with the other beverages falling into the fifth category. As regards the advertising restrictions imposed on drinks in the third category the French Government maintains that many wine-based aperitifs are in fact French products although they may bear trade names which appear to be foreign. There can therefore be no question of discrimination here when the categories laid down by the Code are applicable in an objective manner according to the properties of the various products and the prohibitions and restrictions on advertising apply to an appreciable number of French products as well as to imported products.

1 3 That defence of the French Government cannot be accepted. Even though it is true that the system adopted by the Code has the effect of subjecting some national products to prohibitions or restrictions on advertising, including widely-consumed products, nevertheless the fact remains that it still has

COMMISSION v FRANCE

undeniably discriminatory features. It should be emphasized in particular that as a result of their coming under the tax arrangements applying to wine, French natural sweet wines enjoy unrestricted advertising whilst imported natural sweet wines and liqueur wines are subjected to a system of restricted advertising. Similarly, whilst distilled spirits typical of national produce, such as rums and spirits obtained from the distillation of wines, ciders or fruits, enjoy completely unrestricted advertising, it is prohibited in regard to similar products which are mainly imported products, notably grain spirits such as whisky and geneva. As regards the similarity and competition existing between the products just mentioned, reference need only be made to the judgment which the Court gave between the same parties on 27 February 1980 in Case 168/78 on the tax system for spirits.

15 Secondly, the French Government draws attention to the part which the prohibitions and restrictions on advertising play in the campaign against alcoholism and in the protection of public health. The French Government is of the opinion that the disputed legislation is thereby covered by Article 36 of the EEC Treaty by which the provisions on the free movement of goods do not preclude prohibitions or restrictions on imports justified on grounds of the protection of health and life of humans. The French Government explains on this point that the legislation contested by the Commission is based on the distinction between drinks which are habitually consumed for "aperitif" purposes and drinks consumed for "digestive" purposes as it is accepted that it is the former which are more of a danger to public health owing to the fact that they are taken on an empty stomach. The scheme of the Code is so arranged, it is claimed, that the prohibitions and restrictions on advertising apply first and foremost to the category of aperitif drinks, such as aperitifs based on enriched wine, pastis and whisky. As regards the distilled spirits comprised in the fourth category, which may be freely

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advertised, they are spirits consumed as digestive beverages and as such are less harmful to health.

16 A preliminary observation is necessary in regard to the distinction between "aperitif" drinks and "digestive" drinks. As the Court has had the occasion to observe in the judgment of 27 February 1980, cited above, that distinction does not represent an effective criterion for the purpose of assessing the competitive relationship existing between the different categories of alcoholic drinks. Those observations, made in the context of a dispute on the tax arrangements applying to the drinks in question, apply for identical reasons to the assessment of obstacles of a commercial nature covered by Articles 30 and 36 of the Treaty.

18 The fact cannot be disputed that several alcoholic beverages on which there are no advertising restrictions under the French legislation, have, from the point of view of public health, the same harmful effects in the event of excessive consumption as similar imported products which, as such, are subjected to prohibitions or restrictions on advertising. Even though it is true that grounds relating to the protection of public health are not wanting in the disputed legislation, none the less its effect is to transfer the effort to restrict excessive alcohol consumption above all to imported products. It is therefore apparent that although the disputed legislation is in principle justified by concern relating to the protection of public health, none the less it constitutes arbitrary discrimination in trade between Member States to the extent to which it authorizes advertising in respect of certain national products whilst advertising in respect of products having comparable characteristics but originating in other Member States is restricted or entirely prohibited. Legislation restricting advertising in respect of alcoholic drinks

COMMISSION v FRANCE

complies with the requirements of Article 36 only if it applies in identical manner to all the drinks concerned whatever their origin.

19 Therefore that defence by the French Government must also be dismissed.

20 It follows that the French Republic must be found to have failed to fulfil its obligations having regard to the fact that the rules on advertising in respect of alcoholic beverages laid down by Article L 17 and L 18 of the French Code on the retail sale of beverages together with Article L 1 of the same Code are contrary to Article 30 of the EEC Treaty inasmuch as they constitute an indirect restriction on the import of alcoholic products orig- inating in other Member States to the extent to which the marketing of those products is subject, in law or in fact, to more stringent provisions than those which apply to national or competing products.

OPINION OF MR REISCHL — CASE 152/78

2. Orders the French Republic to pay the costs.

Kutscher O'Keeffe Touffait Mertens de "Wilmars Pescatore

Mackenzie Stuart Bosco Koopmans Due

Delivered in open court in Luxembourg on 10 July 1980.

A. Van Houtte H. Kutscher Registrar President