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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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The internal market of the European Union was set up by Art.3(3) TEU . To build upon this, Art.34 TFEU dictates that there be no quantitative restriction on imported goods between member states and seeks to protect the concept of the free movement of goods within this single market. Here, Pierre is alleging that the legislation recently enacted by France is in breach of Art. 34 TFEU as the legislation acts as an obstacle to free trade.

Article 1 - Is there a trade barrier?

The key to answering the question whether there is a trade barrier can be found in Dassonville. Here, according to the ECJ, “all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, Intra-Community trade are to be considered measures having an effect equivalent to quantitative restrictions”.  This means that domestic legislation which have the consequence of laying down obstacles of the free movement of goods are liable to constitute measures having an equivalent effect even if those rules apply to all products alike. This formula is very broad and thus is very helpful to Pierre.

However, for Art.1 to fall within the catch of the Dassonville formula, the rule in Keck must be considered: if the domestic measure turns out to be “only a selling arrangement”, it cannot be classified as a trade barrier. A measure is only a selling arrangement if it imposes an equal burden on all relevant traders seeking to market goods in the national territory and thus, is not within the scope of Art.34 TFEU as it does not impose extra costs on the importer, its purpose is not to regulate trade, nor does it prevent access to the market. It must be noted however that the court clearly distinguishes between rules relating to the modalities of marketing a product and product rules: any rules relating to the goods themselves are within the scope of Art.34 TFEU because they would have to be satisfied by the importer in addition to any provisions existing within its own state, essentially, imposing a dual burden.

Essentially, the Keck formula boils down to whether the application of a measure prevents products from other member states from accessing the market. This market access test - as consolidated in Gourmet International - focuses on whether the domestic measure does or does not have the object or effect of treating products coming from other Member States less favourably.

The facts of Gourmet Internationalcan be likened to the ones in question. In Gourmet International, there was a ban on all alcoholic advertisements on radio, TV and magazines. Although it was equal in law, it did not apply equally in fact. This was because Swedish consumers were much more familiar with domestic products and it was shown that ingrained consumer habits would favour national beer, hence, the ban put imported alcoholic beverages at a much greater disadvantage. This is not dissimilar to the situation that Pierre has bound himself in. Pierre may be able to successfully argue that Art.1 of the contested legislation does not pass the market access test and hence infringes on Art.34 TFEU. This is due to the empirical evidence that show that French consumers will simply always prefer French chocolate products as a matter of local habit and pride. His products, as imported goods, are at an obviously greater disadvantage under the contested legislation when compared those of domestic producers.

Article 1 - Is there a valid public interest justification for the contested measure?

As the measure in question is indistinctly applicable, it is most likely that France - as the defending member state - will rely on the justification of the protection of public health under the Cassis de Dijon rule of reason rather than a justification under Art.36 TFEU.

This justification is likely to be considered valid by the national court because it is applicable without distinction, it is necessary to satisfy certain mandatory requirements recognise by Community law and it can be argued that it is proportionate.

Here, the requirement of proportionality is satisfied because it seems appropriate as a restriction on the marketing of chocolate is suitable to achieves the legitimate aim of protecting public health regarding the over consumption of sugar. Also, the measure seems to be necessary as it is not a complete ban and thus does not have an excessively onerous effect on economic freedom under Art.34 TFEU.

In conclusion, although Pierre has grounds for successfully arguing that Art.1 of the contested legislation is a measure equivalent to a quantitative restriction, it is likely that it will be found to be justified.

Article 2 - Is there a trade barrier?

Although it seems to pass the aforementioned market access test, Art.2 seems to satisfy the Dassonville formula as it constitutes a restriction of use. Per both Aklagaen v Mickelsson,Roo and Commission v Italy, a measure that imposes a restriction on use of a product may have a considerable influence on the behaviour of consumers, which then may affect the access of that product to the market of the Member State; and so, such a measure is one that has an equivalent effect and is a trade barrier caught by Art.34 TFEU. By banning the sale of chocolate products with a sugar content above the specified in schools and universities, the behaviour of school-age consumers and university students – the almost-exclusive customer base of Pierre's “Booster” drink – is likely to change as they will no longer have the same access to the product which, in turn, affects the access of “Booster” in the French market as a whole.

Article 2 - Is there a valid public interest justification for the contested measure?

Analogous to its justification for the first article, the French authorities are likely to rely on the public health justification for the second as well. However, it is less probable to be found proportionate by the court. This is because it is an imposition on an outright ban in the sale of chocolate products with a sugar content above the specified level in schools and universities does not seem to be the least restrictive measure necessary to achieve the aim of reducing the consumption of sugar. The measure seems to have an excessive effect on the interests safeguarded by Art. 34 TFEU.

Does Pierre, under the preliminary reference procedure, have any influence on whether the Court of Justice of the EU (CJEU) might get involved in this dispute?

Currently, Pierre has no influence on whether the CJEU gets involved in the dispute. A request (or reference) for a preliminary ruling can only be made at the request of a court or tribunal of a European Union member state. Only national courts of last instance are required to make a reference under the EC treaty.

It is submitted that, as a matter of future law reform, Pierre should not be allowed to have a say in this matter such that he should not be able to request the CJEU involvement himself. This is because, by allowing litigants to have influence on whether the CJEU is engaged in the dispute, the remaining authority of national courts would essentially be undermined. The preliminary reference procedure should not become something that is horizontally effected and ultimately usurps domestic courts' autonomy; it should remain system of cooperation which facilitates a dialogue between the CJEU and national courts.

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