Groupement National des Negociants en Pommes de Terre de Belgique v ITM Belgium SA and Vocarex SA. (Free movement of goods) [1995] EUECJ C-63/94 (11 August 1995)

Judgment 1 By judgment of 21 January 1994, received at the Court on 15 February 1994, the Tribunal de Commerce (Commercial Court), Mons, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Article 30 of the EEC Treaty, now the EC Treaty. 2 That question was raised in proceedings between the Groupement National des Négociants en Pommes de Terre de Belgique (National Association of Belgian Potato Dealers, hereafter "Belgapom") and ITM Belgium SA ("ITM") and Vocarex concerning a sale of potatoes by Vocarex with a low profit margin. 3 In Belgium the first and third paragraphs of Article 40 of the Law of 14 July 1991 on Commercial Practices provides: "Traders shall be prohibited from offering a product for sale or selling a product at a loss. A sale shall be considered to have been made at a loss if the price is not at least equal to the price at which the product was invoiced at the time of supply or at which it would be invoiced if it were resupplied. Any sale which, taking account of those prices and of overheads, yields only a very low profit margin is to be treated as a sale at a loss." 4 Vocarex is an independent commercial establishment bound by a franchise agreement to the Intermarché group and managed in Belgium by ITM. Acting on information received from ITM, Vocarex during September 1993 bought at the price of 27 Francs each 25 kilogramme bags of "Bintjes" potatoes which it resold at the price of 29 Francs. At the material time the price generally charged by traders was 89 Francs. 5 Belgapom applied to the Commercial Court of Mons for a sales restraint order against ITM and Vocarex. The latter parties contended that the application should be dismissed on the ground that Article 40 of the abovementioned Law infringed Article 30 of the EC Treaty. 6 Taking the view that the outcome of the proceedings depended upon an interpretation of Community law, the Mons Commercial Court stayed the proceedings and referred the following question to the Court for a preliminary ruling: "To what extent is Article 40 of the Law of 14 July 1991 and more particularly the third and fourth paragraphs thereof, having regard to the general nature of the terms in which they couched, compatible with Article 30 of the EEC Treaty, where those paragraphs lay down that a sale at a price higher than the price invoiced at the time of supply but with a very low profit margin is to be treated as equivalent to a sale at a loss?" 7 In view of the wording of the preliminary question it is necessary to recall that the Court has consistently held that it does not have jurisdiction to rule on the compatibility of a national measure with Community law. However, the Court is competent to provide the national court with all criteria for the interpretation of Community law which may enable it to determine the issue of compatibility for the purposes of the decision in the case before it (see, most recently, the judgment in Case C-438/92 Rustica Semences v Finanzamt [1994] ECR I-3519 , paragraph 10). 8 In order to reply to the question submitted by the national court it must first be ascertained whether Article 30 of the Treaty applies where a Member State prohibits by legislation any sale which yields only a very low profit margin. 9 It is settled case-law that any measure likely to impede, directly or indirectly, actually or potentially, trade between Member States constitutes a measure having an effect equivalent to a quantitative restriction on imports (judgment in Case 8/74 Dassonville [1974] ECR 837 , paragraph 5). 10 A legislative measure such as that at issue in the main proceedings, which prohibits sales yielding only a very low profit margin, is not intended to govern trade in goods between Member States. 11 It is true that such a prohibition is capable of restricting the volume of sales and, consequently, the volume of sales of products from other Member States, inasmuch as it deprives traders of a method of sales promotion. The question is, however, whether that is sufficient for the prohibition at issue to be classified as a measure having an effect equivalent to a quantitative restriction on imports within the meaning of Article 30 of the Treaty. 12 It should be recalled here that trade between Member States is not likely to be impeded, directly or indirectly, actually or potentially, within the meaning of the Dassonville judgment, cited above, by the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements, so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States. Where those conditions are satisfied, the application of such rules to the sale of products from another Member State meeting the rules laid down by that State is not by nature such as to prevent their access to the market or to impede access any more than it impedes the access of domestic products. Such rules therefore fall outside the scope of Article 30 of the Treaty (see the judgments in Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I-6097 , paragraphs 16 and 17, in Case C-292/92 Huenermund and Others [1993] ECR I-6787 , paragraph 21, and in Case C-412/93 Leclerc [1995] ECR I-719, paragraph 21). 13 A provision like that in issue in the main proceedings concerns selling arrangements inasmuch as it prohibits any sale which yields only a very low profit margin. 14 Moreover, that provision applicable, without distinction as to products, to all traders in the relevant sector does not affect the marketing of products from other Member States differently than the marketing of domestic products. 15 In those circumstances, the reply to be given to the national court is that Article 30 of the Treaty is to be interpreted as not applying where a Member State prohibits by legislation any sale which yields only a very low profit margin. Costs 16 The costs incurred by the Commission of the European, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. On those grounds, THE COURT (Sixth Chamber), in answer to the question submitted to it by the Tribunal de Commerce, Mons, by judgment of 21 January 1994, hereby rules: Article 30 of the EC Treaty is to be interpreted as not applying where a Member State prohibits by legislation any sale which yields only a very low profit margin. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII