C-23/89

QUIETLYNN AND RICHARDS

O P I N I O N OF MR A D V O C A T E GENERAL LENZ delivered o n 3 M a y 1990 *

* Original language: German.

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OPINION OF MR LENZ — CASE C-23/89

where the effect is to have restricted B — Analysis the appellants from selling goods from other Member States since they have been attempting not to contravene the "Act" by their stocking policy and in doing so have been selling less imported material from Member States than would otherwise have been the case and thus to restrict the availability of sex articles manufactured in other 5. 1. If one proceeds on the basis of the Member States; is such a prohibition a formula which was set out in relation to measure having equivalent effect to a Article 30 in the judgment in Case 8/74 1 quantitative restriction on imports and appears again and again in cases within the meaning of Article 30 of the concerning that article (see for example the Treaty? judgments in Cases 75/81 and C-69/88 2 ), that is to say if consideration is given to the question whether the provisions at issue are 'capable of hindering, directly or indirectly, actually or potentially intra-Community trade', there can be little doubt that this is the case.

(2) If the answer to Question 1 is in the affirmative, does such a measure benefit from the justification set out in Article 36?

8. (a) Accordingly, if the case-law is looked at more closely and it is borne in mind that, in the present case, there is no outright prohibition on the sale of certain products 11. In this regard attention was also but rather that marketing rules apply which, correctly drawn to Case 20/87 4 concerning under certain circumstances, preclude those French provisions relating to authorizations products from being sold in certain places to operate supermarkets which can result in (where sales reach a significant degree), a restriction of sales of goods including comparable situations may readily be imported products. On this point the encountered in earlier cases also concerning question as to the relevance of Article 30 only the nature and method of marketing of was examined during the proceedings. The products, in respect of which it was found Advocate General concluded that it was not that Article 30 did not apply (although some relevant and pointed out that, as a result of impact on imports could not be ruled out). the provisions in question, sales on the domestic market of imported goods and those produced domestically were affected to the same extent. The Court evidently shared that assessment. In any event it is noteworthy that in the judgment Article 30 is not examined at all; there is only an appraisal in the light of Article 52 of the Treaty (right of establishment).

9. I would cite, for example, Case 155/80 3 concerning the sale of bakers' wares which, at certain times of the night, could not be sold to individual consumers and retail outlets but only to wholesalers and dealers. 12. The quite recent judgment in Case A central feature of this case was the C-145/88 5 is also not without some finding that intra-Community trade never- theless remained possible, and, conse- 4 _ Judgment in Case 20/87 Ministere publici Cauchará [1987] ECR 4879 5 _ Judgment in Case 145/88 Torfaen Borough Council v 3 — Judgment in Case 155/80, Sergius Oebel[1981] ECR 1993. B & Q PLC [1989] ECR 3851

relevance. That case concerned the no grounds for arriving at a different prohibition on the sale of certain goods on assessment in the present case. Sundays and is of interest because, in the first paragraph of the judgment containing the Court's assessment, it is pointed out that, regard being had to the fact that the rules in question apply to imported and domestic products alike, the marketing of products imported from other Member States is not in principle made more difficult than that of domestic products. 15. Those judgments concern cases in which provisions were applicable without distinction to domestic and imported goods and the decisive question was whether imported products were in actual fact placed at any disadvantage, in which case Article 30 came into play. The Commission correctly pointed out that those cases mainly concerned provisions relating to the conditions which the products themselves 13. In the light of this case-law it has been had to comply with (and where conse- suggested, in my view not without some quently the need to adapt imported products justification, that a similar conclusion accordingly could constitute a hindrance to should be arrived at in the present case and trade — see the cases listed by the it should be found that the provisions at Commission at p. 10 of its written obser- issue in the main dispute are not within the vations) or at least cases involving a scope of Article 30 of the Treaty. In fact, in restriction on the advertising of certain this case as well there are good reasons for products (see judgments in Cases 152/78 stating that the Local Government Act 1982 and C-362/88 6), to which the facts of this has nothing to do with international trade case are likewise not comparable. because the sale of the articles contemplated is in any case possible by means other than sex shops, in particular though businesses which require no licence (because the sale of sex articles does not reach a significant degree) or by means of mail order, even if in this case, as was stated at the hearing, certain restrictions apply (irrespective of the origin of the products). 16. However, if the criteria developed in the abovementioned judgments are never- theless included in an examination of the present case, which may be appropriate in the light of the indication by the national court that the appellants in the main proceedings have been restricted in the sale of products imported from other Member States, in the final analysis this should indeed make no difference to the assessment 14. (b) The other judgments mentioned in the proceedings are, it has to be said, 6 — Judgments in Case 152/78 Commission v French Republic [1980] ECR 2299 and in Case C-362/88 GS-INNO-BM basically not relevant and therefore provide [1990] ECR 1-667.

of the applicability of Article 30 of the EEC that the criterion of 'significant degree' used Treaty. in the Act is merely to be construed as catching businesses which are engaged prin- cipally (and not merely on a secondary basis in addition to the sale of newspapers and magazines) in the sale of sex articles (on which point a number of cases were cited in the United Kingdom's written observations). This, however, in no way precludes conspicuous sex articles from also being sold in non-licensed businesses as long as that is 17. In this connection, it will be recalled, not the principal object of the business. the appellants argue as follows: it is clear that, where the Act is applied and a sex shop is refused a licence, trade in the relevant articles cannot be carried on to a significant degree. That affects imported goods in particular, in so far as they are conspicuous in appearance which does not permit them to be exhibited and sold in smaller shops. They are also particularly affected because the business arrangements made necessary by the refusal of a licence allow only a small stock to be held, whereas it is beyond dispute that imports can only be 19. On the other hand it should be noted, profitable if they achieve a considerable with regard to the second part of the volume. appellant's arguments, that no mention was made in the proceedings of a reduction in overall imports of sex articles (this was emphatically contested by the United Kingdom by reference to the fact that sales by means of outlets other than sex shops are possible); rather it was merely presumed that the appellants' imports were reduced. For the purposes of Article 30, however, it 18. On this point it should in fact be said is plainly the former kind of reduction that the first-mentioned argument which is relevant. Moreover, justified doubts (conspicuous appearance of imported were also expressed as regards the alleged products) was evidently not taken up by the trend in the appellants' import activities. national court in its comments on the Those doubts stem from the fact that the assessment of the present case and, conse- appellants carry on business on a large scale quently, may be disregarded. Perhaps the (because they apparently belong to a group reason was that it was not satisfied that of companies which, according to the obser- imported goods are characterized by their vations made at the hearing, operate more particularly conspicuous appearance. The than 50 sex shops in the United Kingdom). United Kingdom did state on this point that For the appellants, therefore, imports in the production structure is not in fact worthwhile quantities are certainly possible, different in this respect in the Member not least because, as the representative of States, and 'conspicuous' sex articles are Southend Borough Council convincingly certainly also produced in the United explained, the Act does not in any way Kingdom. Another factor might have been relate to the holding of stock and the extent

24. Although the goods in question are not in themselves excluded from sale, consumer 21. 3. If that is correct, there is in actual protection could be relevant because under fact no longer any need to examine the the Act marketing may be restricted in further question of whether such a measure certain areas of contested legislation (where may be justified, in particular with reference it is deemed appropriate in order to protect to Article 36 of the Treaty. But for the sake young persons or particularly vulnerable of completeness, in the unlikely event that sections of the population) and also the Court should arrive at a different because, by limiting the number of sex assessment on the application of Article 30, shops, certain areas may be saved from satu- allow me to make the following comments. ration by such articles which could give rise to a deterioration in morals. However, these aspects ought rather to be raised, in my view, under Article 36 (restrictions on imports on grounds of public morality).

29. In this connection, it was correctly 26. Moreover, it should be recognized that pointed out, notwithstanding the arguments the legislation does not disregard the to the contrary raised by the appellants in principle of proportionality (whose the main proceedings, that there is no importance was underlined, for example, in requirement that there should be a uniform the judgment in Case 302/86 Commission v yardstick applicable to the whole country Denmark) because local authorities' (as may in particular be deduced from the licensing practice, which remains of course judgments in Cases 34/79 1 0 and 121/85 11). subject to review by the courts, may in fact Therefore, no objection may be raised have regard to an appropriate level of trade against the fact that the application of the in articles which cannot exactly be regarded Act is left to local authorities, who are in as common commercial wares. On the other the best position to assess the relevant hand, I would not attach any major circumstances. It was also correctly observed importance to the fact that consumer that the Court has held (see judgment in protection, as I have described it, is not Case 34/79 Henn and Darby) that it is for uniform throughout the whole country, each Member State to determine in since such a requirement is not to be found accordance with its own scale of values and in the case-law and is not implicit in the in the form selected by it the level of nature of the matter. protection necessary in this area and that, in the maintenance of public order, the Member States are granted an area of discretion (see judgment in Case 30/77 12 ), which may result in situations which differ from one period to another and from one 27. (b) Regard may, however, also be had place to another. to the application of Article 36 of the EEC Treaty whereby, inter alia, restrictions on imports may be justified on grounds of public morality, and for public policy and public security reasons. 30. Moreover, those defending the legis- lation at issue are surely right in saying that the confining of the licensing requirement to businesses which trade in sex articles to a significant degree is to be endorsed in the 28. The former clearly play a role inasmuch interests of the principle of proportionality, as the contested legislation may afford a even if, in consequence, the appraisal may certain degree of protection for young persons and vulnerable sections of the popu- 10 — Judgment in Case 34/79 Henn and Darby [1979] lation. The latter reasons may be relevant in ECR 3795. so far as the legislation may serve to prevent 11 — Judgment in Case 121/85 Conegate Ltd vHM Customs and Excise [1986] ECR 1007. sex shops from being set up in certain areas 12 — Judgment in Case 30/77 R. v Bouchereau [1977] (for example in residential districts in which ECR 1999

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