Commission of the European Communities v French Republic (169/87)

Contents

Judgment of the Court13 July 1988^noteIn Case 169/87Commission of the European Communities, represented by its Legal Adviser H. Étienne and by D. Calleja, a member of its Legal Department, acting as Agents, with an address for service in Luxembourg at the office of G. Kremlis, a member of the Commission's Legal Department, Jean Monnet Building, Kirchberg,Kingdom of the Netherlands, represented by G. M. Borchardt and A. Fierstra, acting as Agents, with an address for service in Luxembourg at the Netherlands Embassy,intervener,vFrench Republic, represented by R. de Gouttes, acting as Agent, and C. Chavance, acting as Deputy Agent, with an address for service in Luxembourg at the French Embassy,THE COURTcomposed of: Lord Mackenzie Stuart, President, G. Bosco and J. C. Moitinho de Almeida (Presidents of Chambers), T. Koopmans, U. Everling, Y. Galmot and F. Schockweiler, Judges,Advocate General: J. L. Cruz VilaçaRegistrar: J. A. Pompe, Deputy Registrarhaving regard to the Report for the Hearing and further to the hearing on 22 March 1988,after hearing the Opinion of the Advocate General delivered at the sitting on 26 May 1988,gives the following

Judgment

1By application lodged at the Court Registry on 5 June 1987, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that by not fixing the retail selling price of manufactured tobacco at the level set by manufacturers or importers, subject only to the application of general legislation intended to curb the rise in prices, the French Republic has failed to fulfil its obligations under Article 5 (1) of Council Directive 72/464/EEC of 19 December 1972 and Article 30 of the EEC Treaty, and by not taking the measures necessary to comply with the judgment of the Court of Justice of 21 June 1983 it has failed to fulfil its obligations under Article 171 of the EEC Treaty.

2In its judgment of 21 June 1983 in Case 90/82 (Commission v France [1983] ECR 2011), the Court held that ‘the French Republic, by fixing the retail selling prices of manufactured tobacco at a different level from that determined by the manufacturers or importers, has failed to fulfil its obligations under the EEC Treaty’.

3On 24 January 1985 the French Minister for Economic Affairs, Finance and the Budget published a notice concerning the procedure for fixing the retail prices of manufactured tobacco. Whilst leaving the legislation in force unchanged, that notice provided that in future the prices of products brought onto the French market for the first time were to be notified two months before the date on which they were to be offered for sale. The notice also specified that the retail prices of other products were to be fixed on the basis of scales and of the date on which they were to be applied, as notified to the Directorate-General for Competition and Consumer Affairs by manufacturers and importers, having regard to the results of the consultation procedure provided for in the same notice, and were then to be published in the Official Journal of the French Republic by order of the Minister for Economic Affairs, Finance and the Budget.

4The Commission, which received complaints from producers or importers whose new retail prices had been notified to the Minister but had not been approved, considered that the notice as interpreted and applied by the French authorities did not have the effect of allowing the retail prices of manufactured tobacco to be freely determined by manufacturers and importers. It therefore initiated the procedure provided for in Article 169 of the EEC Treaty against the French Republic on the ground that the French Government had not complied with the judgment of 21 June 1983 and that the French legislation was still not in conformity with Community law.

5By order of 11 November 1987 the Court granted the Kingdom of the Netherlands leave to intervene in the case in support of the Commission's conclusions.

6Whilst maintaining that it had not failed to fulfil its obligations under the Treaty, the French Republic pointed out both in the pre-contentious procedure and in the proceedings before the Court that it had already authorized price increases and that it would gradually liberalize retail prices for manufactured tobacco so as to ensure in 1989 total freedom with regard to the fixing of those prices.

7Reference is made to the Report for the Hearing for a more detailed account of the facts of the case, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

8With regard to the substance of the case, it must be pointed out at the outset that the Commission's submissions alleging that the French legislation is inconsistent with Article 5 (1) of Directive 72/464/EEC and with Article 30 of the Treaty are in fact included in the submission alleging that the Court's judgment of 21 June 1983 has not been complied with.

9In reply to that submission, the French Government contends that it has taken the measures necessary to comply with that judgment, first by publishing the abovementioned notice of 24 January 1985, and secondly by agreeing to a number of price increases proposed by manufacturers or importers.

10Neither of those measures can be regarded as an acceptable method of complying with the Court's judgment in accordance with Article 171 of the EEC Treaty.

11In that judgment, the Court held that Law No 76-448 of 24 May 1976 on the organization of monopolies in manufactured tobacco and Decree No 76-1324 of 31 December 1976 adopted for its implementation, which empower the French public authorities to fix the retail prices of manufactured tobacco, were contrary to both Directive 72/464/EEC and Articles 30 and 37 of the EEC Treaty. It cannot be denied that the notice of 24 January 1985, whose text, moreover, as published in the Official Journal of the French Republic, does not bear the signature of any public authority, has left those legislative provisions unchanged, and cannot have had the effect of amending or repealing them. Even if that notice reflected the French Government's intention to approve in future all the prices set by manufacturers or importers, which is not apparent from the text of the notice and has been ruled out by the French Government itself, it would lead to an ambiguous legal situation giving rise to legal uncertainty and would not discharge the obligation incumbent on the French Republic to comply with the Court's judgment in full.

12Nor, secondly, can the fact that the French public authorities authorized certain price rises requested by manufacturers or importers be validly relied upon by the French Republic. Apart from the fact that those authorized increases were partial and limited, the Court has consistently held that administrative practices, which can by their nature be altered by the authorities at will, cannot be regarded as constituting, on the part of the State concerned, proper fulfilment of its obligations under Community law.

13The French Government also contends that it cannot be accused of infringing Article 171 of the Treaty if account is taken of the process of price liberalization which it has initiated and is designed to culminate in the establishment of a system of complete freedom with regard to the fixing of manufactured tobacco prices in 1989.

14In that regard it must be emphasized that even though Article 171 does not specify the period within which a judgment must be complied with, it is clear that the process of complying with a judgment must be initiated at once and must be completed as soon as possible. In this case it is clear that a delay in complying with a judgment that goes beyond the minimum period needed for the adoption of the measures required is particularly unjustifiable since Article 12 of Directive 72/464/EEC imposed on the Member States an obligation to bring into force not later than 1 July 1973 the provisions laid down by law, regulation or administrative action necessary to comply with that directive.

15It must therefore be held that by not taking the measures necessary to comply with the judgment of the Court of Justice of 21 June 1983 the French Republic has failed to fulfil its obligations under Article 171 of the EEC Treaty.

Costs

16Under Article 69 (2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party's pleading. As the defendant has been unsuccessful in its submissions, it must be ordered to pay the costs, excluding those of the intervener, who has not asked for them and must therefore be ordered to bear its own costs.

Operative part

On those grounds,THE COURThereby:

(1).Declares that by not taking the measures necessary to comply with the judgment of the Court of Justice of 21 June 1983 the French Republic has failed to fulfil its obligations under Article 171 of the EEC Treaty;

(2).Orders the French Republic to pay the costs, with the exception of those incurred by the Kingdom of the Netherlands;

(3).Order the Kingdom of the Netherlands to bear its own costs.

Delivered in open court in Luxembourg on 13 July 1988.