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Rosengren E.A Brussels, 22 July 2004 1 EFTA SURVEILLANCE Case No: 55742 AUTHORITY, Event No: 287996 TO THE PRESIDENT AND MEMBERS OF THE COURT OF JUSTICE OF THE EUROPEAN COMMUNITIES WRITTEN OBSERVATIONS submitted pursuant to Article 23 of the Statute of the Court of Justice of the European Communities by the EFTA Surveillance Authority represented by Niels Fenger, Director, and Arne Torsten Andersen, Officer, in the Department of Legal & Executive Affairs, acting as Agents, assisted by Mia Sahlborn Hodgson, Officer in the Internal Market Affairs Directorate in Case C-170/04 Klas Rosengren and Others v. Riksaklagaren (The Public Prosecutor) in which the Hogsta Domstolen, Sweden, has requested the Court of Justice of the European Communities to give a preliminary ruling under Article 234 EC on the interpretation of Articles 28, 30 and 31 EC. The EFTA Surveillance Authority (hereinafter referred to as "the Authority") has the honour to submit the following written observations to the Court. I. Introduction 1. In the present case, the Hogsta Domstolen (Swedish Supreme Court) asks four questions concerning the compatibility with Community law of a rule in Swedish law regulating private import of alcohol on to its territory. According to this rule, private import of alcohol is only permitted when the individual importing the alcohol is travelling into Sweden, physically bringing the alcohol with him (or in a few other narrowly defined situations not relevant to the case pending before the Hogsta Domstolen). This prohibition is combined with another provision in Swedish law, according to which the holder of the retail monopoly in Sweden, namely Systembolaget, upon request from a private individual, can import alcohol from foreign producers that Systembolaget does not hold in stock. 2. The questions relate to the fact that the EFTA Court and the Court of Justice of the European Communities (hereinafter referred to as "the Court of Justice") has already held: 1) that statutory monopolies such as Systembolaget may not enjoy the right to be an import monopoly;1 2) that the existence and operation of Systembolaget's retail monopoly should be assessed under the rules on State monopolies contained in Article 31 EC and is, as such, compatible with that provision, whereas; 3) the rights for commercial traders to import alcohol into Sweden should be assessed according to the general provision in Article 28 EC.2 3. In light of the situation before it, the Hogsta Domstolen decided to refer the following questions to the Court of Justice: i. Can it be held that the above mentioned ban on imports constitutes part of the retail monopoly's manner of operation and that on that basis it is not precluded by Article 28 and is to be examined only in the light of Article 31? ii. If the answer to Question 1 is yes, is the ban on imports in such a case compatible with the conditions laid down for State monopolies in Article 31? iii. If the answer to Question 1 is no, is Article 28 of the EC Treaty to be interpreted as meaning that it in principle precludes the current ban on 1 Case E-l/94 Ravintoloitsijain Liiton Kustannus Oy Restamark, [1994-1995] EFTA Court Report, p. 15, 2 Case C-189/95 Criminal Proceedings against Harry Franzen, [1997] ECRI-5909. imports despite the obligation of the Systembolaget to obtain, upon request, alcoholic beverages which it does not hold in stock? iv. If the answer to Question 3 is yes, can such a ban on imports be considered justified and proportional in order to protect health and life of humans? 4. The Authority will begin its submission by giving a brief account of the relevant Swedish legislation (Section II). Thereafter, it will summarize the facts in the main proceedings in Section III. The Authority's assessment of the questions raised by Hogsta Domstolen is given in Section IV hereto. II. Relevant national legislation The rules on importation 5. The import of alcoholic beverages into Sweden is governed by Chapter 4, paragraph 2 of Alkohollagen (Law on alcohol) (1994:1738). The main rule is set out in the first sentence of this paragraph, according to which only persons who have a bonded warehouse approval for alcohol or are registered as warehouse keepers are permitted to import strong beer,3 wine and spirits (hereinafter referred to as "alcohol" or "alcoholic beverages") into Sweden. 6. hi contrast, the retail monopoly may not, as a general rule, itself import alcoholic beverages, cf. the provision in Chapter 5, paragraph 1, second phrase. The reason behind this prohibition is explained in some detail in the preparatory works to Alkohollagen, where it is stated that the Government, in order to ensure the legality of Systembolaget's retail monopoly under Community law, found it necessary to prohibit Systembolaget from being able to import directly from abroad. Otherwise a risk of abuse of the monopoly's dominant position on the retail market would arise.4 7. However, pursuant to Chapter 4, paragraph 2 of Alkohollagen, Systembolaget has been granted the limited right to import alcoholic beverages in order to provide the service laid down in Chapter 5, paragraph 5.5 8. It follows a contrario from Chapter 4, paragraph 2 of Alkohollagen that, subject to the particular exceptions listed below, private individuals may not import alcoholic beverages to Sweden. It is the understanding of the Authority that this ban applies regardless of whether the individual has bought the alcohol by distance selling while himself remaining in Sweden or whether the individual has purchased the beverages while in another Member State. Only to the extent that the individual 3 To the Authority's understanding there are no similar restrictions as to weaker sorts of beer, defined in Chapter 1, paragraph 6 as beer with an alcoholic content between 2,26 and 3,49 per cent alcohol by volume. 4 Regeringens proposition 1998/99:134, p. 104-105. 5 Described below under paragraph 11. physically carries the alcohol over the border, will he be able to import the beverages into Sweden. A consumer is then entitled to import into Sweden the goods without any special limits regarding quantities and without having to pay excise duties, as long as it is for personal use and the age-limit is respected. 9. Some limited possibilities for private individuals to import alcoholic beverages are listed in the second sentence of Chapter 4, paragraph 2 of Alkohollagen. These include the possibility for travellers over the age of 20 years purchasing alcohol for their own or their family's personal use or as a gift to their "narstaende"6 for their or their family's personal use. It also includes the right to import alcohol as part of a private persons removal goods when moving into Sweden or when received as a specific gift from a private individual living abroad. The rules pertaining to sale of alcohol to consumers in Sweden 10. The operation of the retail monopoly is regulated by Chapter 5 of Alkohollagen. According to paragraph 1 of that Chapter, a monopoly, owned by the state, shall exist for the purpose of retailing alcoholic beverages. Paragraph 2 provides that the monopoly shall be the sole operator as to retail of alcohol in Sweden. For this purpose, Systembolaget operates 420 outlets throughout Sweden. Alcohol is, however, not only handed out at Systembolaget's own sales point. Pursuant to the Agreement concluded between Systembolaget and the Swedish Government, the consumer can have alcoholic products delivered via a local agent in places where Systembolaget does not have an outlet it self. According to information available on Systembolaget's webpage,7 there are approximately 590 local agents spread over Sweden. Such local agents might be, inter alia, a country shop, a petrol station or a tobacco shop. Where it is not possible to engage a local agent, the products may be sent via ordinary mail or other communication system to a suitable bus stop or station. 11. As already indicated, the possibility for private individuals to ask Systembolaget to import alcohol for them is regulated in Chapter 5, paragraph 5 of Alkohollagen. According to that provision, the retail monopoly shall, upon request, procure alcoholic beverages not held in stock by the monopoly, unless the monopoly finds grounds for not doing so. Chapter 5, paragraph 5 does not list what consideration Systembolaget may take into account when so deciding. Indeed, in Prop 2003/04:1618 it is stated that it is unclear which criteria are relevant for deciding whether to import on behalf of the consumer or not. 6 In the English version of the reference from Hogsta Domstolen, this term has been translated into "close circle of friends". However, as far as the Authority is aware of, the Swedish term comprises a more limited group of people, typically close relatives and co-habitants. http://www.systembolaget.se/Apphkationer/Knappar/InEnglish/ 8 In that document, the Swedish Government has suggested to the Parliament to abolish the right of Systembolaget to refuse the request of the consumer, cf. Prop. 2003/04:161 page 69. However, to the Authority's knowledge this bill has not yet come into force and was, at any rate, not applicable at the time where the relevant facts in the main proceedings took place. III. The factual background of the case before Hogsta Domstolen 12. hi the case before the referring court, the Appellants had visited a Swedish- language Danish webpage which invites customers to order wine from Spain. In addition to placing an order through this webpage, the Appellants ordered wine directly from the producer. Carriage of the wine was taken care of by an independent carrier and arranged through another webpage.
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