Brussels, 18 June 2014 Case No: 71877 EventNo:687532 Dec No: 22lll3lCOL
Ministry of Finance Postboks 8008 Dep N-0030 Oslo Norway
Dear Sir or Madam,
Subject: Letter of formal notice to Norway for maintaining in force certain legislation on private importation of alcohol
1 Introduction
In Norway, retail sale of alcoholic beverages may only be undertaken by the State monopoly AS Vinmonopolet ("Vinmonopolet"). However, a private person in Norway may import alcoholic beverages without the assistance or involvernent of Vinmonopolet into Norway, if it is intended for private use. Such importation may take the form of the importer carrying the beverages over the border himself, or he may have the goods delivered by a transport company authorised to deliver alcohol into Norway. The transport company delivering the alcoholic beverages to the private importer can only provide the transport service; it cannot have any other involvement in the sale as such, and must be independent from the seller. The Authority understands that it is not necessary that the buyer himself contracts with the transport company. It is permissible for the buyer to enter into one single contract with the seller, for the sale and delivery of alcoholic beverages (and, thus, a seller abroad may offer alcoholic beverages with home delivery in Norway). But the seller must then outsource its deliveries into Norway to an independent transport company, whose advantage from such sales must be limited to normal remuneration for the transport service.
The EFTA Surveillance Authority ("the Authority'') considers that this requirement of functional and structural separation between the undertaking selling the alcoholic beverages and the undertakings delivering the beverages violates the EEA rules on free movement of services and free movement of goods, as set out in Articles 36 atdlor 11 of the EEA Agreement, in so far as alcoholic beverages come under the product scope of the Agreement.
2 Correspondence
The Authority has opened an own initiative case in relation to the functional and structural separation requirement concerning private import of alcohol under Norwegian legislation.
By letter dated 4 July 2012 (Event No: 636870), the Authority sent a request for information to Norway, asking for clarification on several issues.
Rue Belliard 35, 8-1040 Brussels, tel: (+32)(0)2 286 l8 1l' fax: (+32)(0)2 286 18 00' www'eftasurv'int Page2
By letter dated 21 August 2ol2 (Event No: 644777), the Norwegian Govemment to the Authority's letter.
The matter was discussed at the package meeting in Oslo in October 2012. A follow-up letter was issued and the Norwegian Government provided additional information as requested in a letter dated 20 Decemb er 2012 (your rei OglS:S0)(Event No: 657502).
The matter was subsequently discussed at the package meeting in Oslo in Novemb er 2013 and by letter dated 24 January 2014 (your reroqls:sb)(Event No: 696913), the Norwegian Government provided additional clarifi cations, as requested.
Relevant national law
The Norwegian Alcohol Act (..the Alcohol Act,,)l provides:
Section l-5 Minimum aqe
Alcoholic beverages lcontaining more than 22 per cent or more alcohol by volume up to 60 per cent alcohol by volumeJ must not bi retailed, served or suppllid to anyone under the age of 20.
Alcoholic beverages containing lmore than 2,5 per cent alcohol by volume but less than22 per cent.alcohol by volume/ must not be retailed, served or iupplied to anyone under the age of I 8.
Alcoholic beverages only ryay be importedfrom abroad by parties who are authorised to engage in wholesale, hold a production licence, an exteided retail licenc:e pursuant to section 3-1 third paragraph or a serving licence extended to cover rmpoit, under section 4-2 third paragraph.
Under regulations issued by the ministry, alcoholic beverages may however be imported by AS vinmonopolet without a licence as mentioned in the jrst paragraph. Alcoholic beverages may also be imported without such a ticenle purronol consumption and by representatives S, offoreign powers in Norway oplra ise when they are fo, ' imported duty-free o, prrruirl n regilations issued by"tie *iixrry.
Alcoholic beverages may be imported from abroad by individuals for personal use (private import) without a licenie as mentioned in the first paragraph. The Ministry may issue.further requirements which must be met in iraeiTo, t-he-importation to be regarded as private import.
om omsetning av akoholholdig 'Lo" drikk mv. Lov 1989-06-02-2/. unnofficial translation. Page 3
(Jndertakings can only deliver alcoholic beverages to individuals who import alcoholic beverages for personal use, provided the undertaking is registered as deliverer of alcoholic beverages on private imports at the Ministry of Health.
Section 2-5: Time restrictions on delivery qf alcoholic beverages
Delivery of alcoholic beverages relating to private imports may take place from 08:30 until l8:00. On the day before Sundays and holidays, the delivery shall stop at 15:00 [...J.
Section 3-l : The right to retail alcoholic beverages
The retailing of alcoholic beverages lcontaining more than 4.7 per cent alcohol by volume per cent up to 60 per cent alcohol by volume/ may only be carried on by AS Vinmonopolet on the basis of a municipal licence, or on the basis of authorisation as mentioned in section 3-la.
Only alcoholic beverages supplied by a holder of a production or retail licence or by a party entitled to engage in wholesaling, or which have been imported pursuant to the third paragraph or by AS Vinmonopolet pursuant to section 2-l second paragraph, may be retailed.
Section 3-7: Time restrictions on the retailinq and supol)) of alcoholic bevera?es contqining a maximum o.f 4.7 per cent alcohol by volume
The retailing and supply of alcoholic beverages lcontaining a maximum of 4.7 per cent alcohol by volumel may take place between 0800 hrs and 1800 hrs. Retailing shall cease at t 500 hrs on days preceding Sundays and public holidays. [...J .
The Norwegian Alcohol Regulation of 8 June 2005, no 538 ("the Alcohol Regulation"), provides in Section l5-5, paragraph2:
"(Jndertakings that deliver alcoholic beverages to private persons that import alcoholic beverages for personal use shall:
2. be independent from the seller of the alcoholic beverage that is being delivered and shall not receive any direct or indirect advantage from the actual sale besides "2 normal r emuneration fo-r the s ervice pr ovided.
2 Forskift om omsetning av qlkoholholdig drikk mv. 2005-06-05, nr 538. Unofficial translation. Page 4
4 Relevant EEA taw
Article 1l of the EEA Agreement reads:
"Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between the Contracting parties.,,
Article 36 of the EEA Agreement provides:
"Within the framework of the provisions of this Agreement, there shall be no restrictions on freedom to provide services within the territory of the Contracting Parties in respect of nationals of EC Member States and EFTA States wlrc are established in an EC Member State or an EFTA State other than that of the person for whom the services are intended.,,
5 The Authority,s assessment
Below, the Authority intends first to explain the Norwegian system and legal framework that govem private importation of alcohol (Section s.t;lrherlafter, it wiu"show that the current Norwegian framework breaches the EEA rules on free movement of services as set out in Article 36 of the EEA Agreement (Section 5.2), and,/or the rules on free movement of goods as found in Article 1l of the EEA Agreiment (Section 5.3). The Authority considers that the Norwegian system breaches Uotn erticle l l and Article 36 EEA in parallel' However, in the alternative, the Authority considers that the systems breaches either Article 36, or Article 1l EEA only.
At this stage. the Authority wishes to unclerline and clarify that it does not challenge the existence of the Norwegian retail monopoly as such, but onty the restriction that Norway imposes in the context ofprivate importation of alcoholic beverages into Norway.
5.1 Norwegian legalframeworkfor retail sale and private importation oJ'alcoholic beverages into Norway
According to section 3-1 of the Alcohol Act, retail sale of alcoholic beverages may only be undertaken by vinmonopolet. According to Section 2-1, paragraph z oitrre Alcohol Act, vinmonopolet may also import alcoholic beverages upon a request from a private person.
section 1-5 of the Alcohol Act provides that a minimum age limit must be respected while retailing, serving or supplying alcoholic beverages. Any plrivate importer of ilcohol must make sure that this minimum age limit is.".p."6d.
According to the Alcohol Act, section 2-r, paragraph 3, a private person in Norway may import alcoholic beverages without the assistance tr involvement of Vinmonopolet into Norway, if it is intended for private use. The Authority understands that by;privat" ,se,, the Norwegian authorities mean that the beverages are intended for private consumption, or as a gift, or to be served in private parties. It is, however, not private import if it is the Page 5
importer's intention to sell the alcoholic beverages or make a professional use of those beverages.
Private importation can, according to Section 2-l,paragraph 3 of the Alcohol Act, take the form of the importer carrying the beverages over the border himself, or, by using the services of a transport company authorised to deliver alcohol in Norway. It follows from Section 15-5, paragraph 2 of the Alcohol Regulation, that the delivery of the alcoholic beverages shall be independent from the actual sale of the beverages.
The preparatory works3 to the recent amendment of the Alcohol Act underline that the delivery company bringing the alcoholic beverages to the private importer cannot have any other involvement in the sales arrangement of such beverages, but must have a completely independent role in relation to this sale.
According to Section 2-4 of the Alcohol Act, only undertakings registered as a deliverer of alcoholic beverages for private importations at the Norwegian Ministry of Health can deliver the beverages in question. As of 21 August 2012, the Authority understands that 46 undertakings were registered.
The Norweglan Govemment has explained that the structural and functional separation described above between the undertaking selling the alcoholic beverages and the undertaking delivering the alcoholic beverages to a private importer in Norway, is considered necessary in order to preserve the Norwegian retail monopolya. The Norwegtan Government has indicated that such separation is needed in order to ensure that private importation into Norway is intended only for personal use, and not for any retail business activity. Any iurangement where both the sale of alcoholic beverages and the transportation, including the delivery to the private customer, is carried out by the same undertaking is considered by the Norwegian Government to amount to a retail sale operation, contrary to the current retail monopoly rules.
5.2 Free movement of services
5.2.1 Applicable legislation
The Services Directive (Directive2006ll23/EC ("the Directive"))s applies to the provision of a wide range of services. However, Article 2(2)(d) of the Directive excludes transport services and provides that the Directive shall not apply to "services in the field of transport, including port services, falling within the scope of Title V of the Treaty''. This means that transport services such as air transport, maritime and inland waterways transport, including port services, as well as road and rail transport do not benefit from the harmonised set of rules that the Directive has created.
The Authority considers that there is no specific EEA transport legislation that applies to the case at hand. EEA transport legislation is sector-specific in that it foresees rules for undertakings providing services in specific transport sectors only. The Norwegian legislation in question has the effect of generally restricting undertakings from providing delivery services that can be provided by any transport mode (road, rail, air, sea), and therefore does not amount to a transport-specific legislation as such.
' Ot. P.p. Nr. 53 (2008 -2009), on page 15. o Lette. of 2l August 2012 fromthe Norwegian Government. 5 Act referred to at point I of Annex X. Compliance date for the EEA EFTA States was I May 2010. Page 6
From the case-law of the Court of Justice of the European Union ("Court of Justice") it follows that in a sector which has not been subject to full harmonisaiion at the EEA level, Member States remain, in principle, competent to define the conditions for the pursuit of the activities in that sector. However, those powers are not unlimited and the EEA States must, when exercising their powers, respect the basic freedoms guaranteed by the EEA Agreement.6
In view of the above, the Authority concludes that the general rules of the EEA Agreement apply to the case at hand.
5.2.2 The existence of a restriction
Article 36 EEA foresees that there shall be no restrictions on the freedom to provide services within the EEA.
The Court of Justice has held that there is no order of priority between the freedom to provide services and the other fundamental freedoms. on the contrary, services constitute a catch-all category in order to ensure that all economic activities fali within the scope of the fundamental freedoms.T
The EFTA Court and the Court of Justice has addressed the issue of free movement of services numerous on occasions. It is settled case-law that Article 56 TFETI (the equivalent of Article 36 EEA) requires not only the elimination of all discrimination on grounds of nationality against service providers who are established in another Member State, but also the abolition of any restriction, even if it applies without distinction to national providers services of and to those of other Membii States, which is liable to prohibit, impede or render less advantageous the activities of a service provider established another in Mernber State, where the provider lawfully provides similar services.s
Hence, the notion of "restriction" is very broad and encompasses a wide range of national measures.
In the present case, it is undisputed that as far as private importation of alcoholic beverages into Norway is concerned, the Norwegian atcofrot Act and Alcohol Regulation impose a structural and functional separation between the undertakings selling the alcoholic beverages and the undertakings delivering the alcoholic beverages to a private importer in Norway.
The Authority is of the view that this national system gives rise to a restriction on the freedom to provide transport delivery services to customErs in Norway since it prescribes a total separation between the undertaking selling the alcohotic berre.ages and the undertaking delivering the beverages. This system thus explicitly prohibits" a seller of alcoholic beverages from delivering the beverages to the Norwegian customer to whom he has sold the beverages.
o:t19! portugat I ?* , !3m11issnny [2009] ECR r-to2ts,paragraph2l. ' case C-452/04, Fidium Finanz, [2006] ECR r-g521, p"r"craph :). see also case c-6o2llo, vollesbank Romania, judgment of 12 July 2}li, notyet reported. 8 case E-l/03 , EFTA surveillance Authority v Icelqnd,EFTA ct. Rep [2003] p. l43,paragraph 2g. case C- 244/04 commission v Germany [2006] ECR I-885, paragraph 30. see also case E-2/ll, srx ,yorway O.ffihore AS and Others v Norway, EFTA Ct. Rep [20121 p i, paragraphTl. PageT
Such a restriction runs counter to business practices and commercial transactions involving both the sale and delivery of products. A seller offering to deliver himself the products he has just sold is likely to be considered standard business practice in many sectors and a natural element in commercial relations.
The Authority considers that the Norwegian restriction may require such economic operators established outside of Norway to re-think their business models if they wish to enter the Norwegian market. Such practice has been held by the Court of Justice to constitute an unjustified restriction of the rules on freedom to provide services since it can dissuade economic operators from offering their services in Norway, thus hindering access to the Norwegian market.e
The Authority holds that the Norwegian system restricts the rules on free movement of services since it directly affects the access to the Norwegian market of sellers of alcoholic beverages who also wish to carry out the delivery of these beverages themselves to the private importer.
In view of all above, the Authority considers that the rules in Section 2-1, paragtaph 3 of the Alcohol Act and Section 15-5, paragraph 2 of the Alcohol Regulation amount to a restriction of the freedom to provide services, in breach of Article 36 EEA.
5.2.3 The discriminatory nature of the restriction
The Authority notes that, according to the preparatory works, Vinmonopolet may assist in the private importation of alcohol either by undertaking the importation of beverages already purchased outside Norway, or by ordering the beverages on behalf of the customer.lo
Internet sales of specific alcoholic beverages through Vinmonopolet's website and subsequent home-delivery via Norway Post ("Posten") is also possible. The Authority understands that Vinmonopolet has entered into an agreement with Posten for the delivery of beverages from such purchases". If the _c-ustomer opts for home delivery, Posten will control the applicable age requirements, etc.12
' Care C-518/06, Commission v ltaly, t20091 ECR I-03491, paragraph 69, andjoined cases C-94l04 andC- 202104 Cipolla a.o. 120061 ECR I-l l42 l. 'o 01 prp. Nr. 53 (2008-2009) on page 19. According to the preparatory works, Vinmonopolet has an agreement with a permanent transporter who transports the alcoholic beverage into his customs storage and declares it. Subsequently, the alcoholic beverage is taken to one of Vinmonopolet's outlets to veriff the content of the order. If the order is taken from Vinmonopolet's outlet to the customer (in cases of orders above a certain size), the delivery company will control age requirements etc. Otherwise it appears that the alcoholic beverages would be picked up by the customer in the local Vinmonopolet outlet. According to Vinmonopolet's website, http://www.vinmonopolet.no/artikkel?id:cms&key:224198 customers can contact Vinmonopolet directly via e-mail or phone and provide the name of the product, the desired production year (if applicable) and the name of the producer along with his address and contact details. Vinmonopolet will then arrange for the delivery according to the customer's wishes and the requirements of the order. " Ot. P.p. Nr. 53 (2008-2009),page 19. t' Or. prp. Nr. 53 (2003-2009) on page 19. Further information conceming online purchases from Vinmonopolet is available a1; http://www.vinmonopolet.no/artikkel?id:cms&key=121I Page 8
The Authority has no information or indications that suggest that Vinmonopolet has been legally obliged to enter into a delivery agreement with its delivering or with Posten. To the contrarty, it seems that those arrangements are the ,"r,rit,"o-pu.ry of purely commercial considerations. Consequently, the eutnority is of the opinion ttrat vinmonopolet could, if it so wishes, carry out the delivery tr tn" beverages itself to the private importer.
Based on the above, the Authority considers that Section 2.1, paragraph 3 of the Alcohol Act and section 15-5, paragraph 2 of the Alcohol Regulation app-tyin a discriminatory manner since no requirement of functional and structuial separatiorrexists with regard to private importation and delivery when that is carried out through Vinmonopolet.
5.2.4 Justifications
Norway's arzuments
In its letter of 21 August2072,the Norwegian Government states that since the separation requirement is aimed at assessing whether an alrangement is to be seen as private importation, or retail of alcohol in breach of the alcohil retail monopoly, it fails to see why a proportionality test or presenting justifications is relevant.
However, the Norwegian Government declares that if such an assessment is nevertheless considered necessary, argues it that the separation requirement set out in Section 2-1, paragraph 3 of the Alcohol Act and Section 15- 5, paragraph 2 of the Alcohol Regulation is proportionate (both suitable and necessTy) ln order to protect the Norwegian public health since it ensures that undertakings delivering the b&erages are ..serious,, Furthermore, the requirement ;;;;;;tt. is considered proportionate as it establishes procedures which guarantee that the deliverer has sufficieni knowledge of the rules on age control, the ban on delivery to persons under the influence of alcohll, and the time frames foreseen under the Alcohol Act as to when sale and delivery can take place.
Finally, the Norwegian Government points out that experience from Finland and Sweden clearly shows that is necessary it to have a distinct drnctional and structural separation between the seller of the alcoholic beverages and the undertaking charged with the task of delivering the beverage, in order to prevent the establishment of selling arrangements in violation of the Norwegian retail monopoly.
The Authoritv's assessment
For the reasons indicated above, the Authority considers that the Norwegian measures restrict the rules on the free movement of servicls.
However, notwithstanding their restrictive effect on the freedom to provide services, Norwegian the measures may be justified in certain well-defined circumstances.
The Norwegran Government has invoked the reason of protecting public health as a justification for having set up the functional_separation system. It follows explicitly from Article 33 EEA that the protection of public treatttr is a, ob3ective of public inierest which
13 Letter of 2l August 2or2 fromthe Norwegian Government, page 3 in fine. Page 9
could justify a restriction of the rules on free movement of services as provided under Article 36 EEA.
However, the EFTA Court has held that the Article 33 EEA must be interpreted strictly. According to the EFTA Court, in order to fall within the scope of Article 33 EEA, the national measure in question must fulfil the following conditions: it must pursue an objective of public interest as provided for in Article 33 EEA it must be appropriate for securing the attainment of the objective pursued; and it must be objectively necessary and la proportionate to that objective.
The EFTA Court has furthermore held that the reasons which may be invoked by an EEA State to justiff a restriction of a fundamental freedom "must be accompanied by an appropriate analysis of the expediency and proportionality of the restrictive measure [...J, iia pi'ecise evidence enabling its arguments to be substantiated'.ts
Similar reasoning can be found in the case law of the Court of Justice which holds that it is for the national authorities, where they adopt a measure derogating a principle enshrined by EU law, to show in each individual case that the measure in question meets those requirements by presenting an analysis of the appropriateness and proportionality_ of the adopted measure and by srrb*ittirrg specific evidence substantiating its arguments.l6
The EFTA Court has previous dealt with the Norwegian alcohol policy and has held that it has no reason to doubt that there are serious social and health considerations behind the Norwegian alcohol policy in general and that combating alcohol abuse constitutes a public health conce*." When it comes to formulating and implementing the national alcohol policies of the EEA States, the EFTA Court has found that the EEA States enjoy a wide freedom when formulating and implernenting such national policies.ls
However, as stated above, any such adopted measure which aims at protecting public health must be appropriate for securing the attainment of the objective relied upon and it must be proportionate.
The Norweglan Government is of the opinion that the separation requirement is proportionate in order to protect the Norwegian public health by guaranteeing that the persons carrying out the delivery are serious and have sufficient knowledge about the relevant Norwegian legislation, and for the protection of Vinmonopolet's retail monopoly.
The Authority does not share the Norwegian Govemment's view and does not consider that the Norwegian restriction on private importation is a proportionate measure aimed at protecting the Norwegian public health, thus justiffing a restriction on the principle of free movernent of services under Article 36 EEA.
The Authority considers that the Norwegian Govemment has provided no evidence substantiating the argument that allowing the sellers of alcoholic beverages to also ensure
'o Cu.. E-2lOl Dr Franz-Martin Pucher,2002 EFTA Ct. Rep l2OO2l p. 4, paragraph3l. See also the ruling of the Court of Justice in Case 352185 Bond van Adverteerders v Netherlands State ll988l ECR 2085, at paragraphs 33 and 36. t' Case E-l2ll} EFTA Surveillance Authority v lceland, EFTA Ct. Rep [20] l] p. I17, paragraph 57 , tu Case 456110, Asociacion Nacional de Expendedores de Tabaco y Timbre (ANETD v Administracion del Estado" not yet reported, paragraph 50. " Case E-4104 Pedicel AS v Sosial- og helsedirektoratetEFTACt. Rep [2005] p. 1, paragraph 54. " Cu." E-1197, Gundersenv Oslo Kommune, EFTA Ct. Rep [997] p 108, paragraph 20. Page 10
the delivery of the beverages themselves would lead to undertakings entering the market that would not be serious and diligent, or not have sufficient knowledge of the rules applyng to alcohol delivery.
The Authority is of the opinion that sellers could be allowed to assist private persons in their importation of alcoholic beverages for private use and to also carry out the delivery of such imported products, without this jeopardising the public healttr and the existing Norwegian retail monopoly.
Informing those sellers appropriately about the existing legal framework and monitoring compliance therewith appears to the Authority to be a less restrictive measure than the current outri ght prohibition.
The Authority therefore considers that the existing Norwegian rules go beyond what is necessary to achieve the legitimate goal of protecting public health and that less restrictive measures than outright prohibition are available and should be envisaged.
The Authority notes also that experience from Sweden seems to show that the opening-up of private importation that has taken place within the new Swedish legislation, has led to importation taking place via the Intemet and several Internet-based seriice providers have entered the market, offering Swedish private persons the possibility to prr.&ur" alcoholic beverages over the Internet and to have them delivered to Sweden without any requirement of functional and structural separation between the seller and the transport companyle. This private importation represents, however, a very tiny proportion of the total amount of alcohol that is consumed in Sweden and there are no indications so far that this importation is being carried out on a larger scale or extent. The consequences of private importation under the new legal regime into Sweden of alcoholic beverages on the public health in general must therefore be considered to be very limited2o.
This experience shows that it is possible to allow for the same undertaking selling and delivering the alcoholic beverage, without jeopardising public health u, ,ri"h op"*to.. appear respect to the legal framework if informed about it and required to deliver the products in accordance with it.
The Authority considers finally that allowing a seller to also carry out the delivery of the purchased beverage would not have any significant impact on or jeopard ize theNorwegian retail monopoly system.
The Swedish experience again shows that internet-based sale and delivery of alcoholic beverages is still a marginal activity and represents only a very small iaction of the overall sales in Sweden after several years of allowing for such sale. The Authority believes that this experience supports its view that all-owing for sellers of alcoholic re See the assignment by the Swedish Governm ent "Tillsyn av marluadsJiiring av alktholdrycker etc,, Dir. 2012:43 intended to examine the current market practices and their compliance with the e*isting rules. on page I I it is indicated that at the end of20l l, 70 undertakings had been registered as distant sellers. on page 13, the report takes also note of the Commission's strive toivards a digitalised single market and the further of e-commerce. The report is only 20{svelopment available in Swedish. Proposition 2O09ll0:125 from the Swedish Government for a new Swedish Alcohol Acq page 59. In Swedish language only. See also a study commissioned by the Swedish Government, SOU 2013:50 ^En viig till dkqd tillsyn: marlcnadsJiiring av och e-handel med aicohol och toba7'.In the study it is indicated that after examining the data after years 8 of internet sales, that in 20ll only 1,23%o oi the population had ordered alcohol via the internet (page 195). Th9 samg study finds on page 221 that"-"o*-"r"" relating to alcoholic beverages still represents a relatively limited, albeit increasini, ictivlty. only available in Swedish. Page 1 1
beverages to also carry out the transport and delivery ofsuch ordered beverages to private importers in Norway will be a minor activity which could not be held to have any significant impact on the existing Norwegian retail system.
For all these reasons, the Authority considers that the Norwegian system as set out in Section 2-l,paragraph 3 of the Alcohol Act and Section l5-5,paragraph2 of the Alcohol Regulation, imposing a structural and functional separation between the undertaking selling the alcoholic beverages and the undertaking delivering the alcoholic beverages to a private importer in Norway, constitutes an unjustified restriction of the freedom to provide services within the EEA, as prohibited by Article 36 of the EEA Agreement.
However, this restriction is arguably present only in so far as concerns the delivery of alcoholic beverages coming within the product scope of the EEA Agreement (see point 5.3.1 just below on the product scope). This limitation on the application of the freedom of movement for services would seem to follow from the EFTA Court's judgment in Case E- 4lO4 Pedicel, cited above, paragraph 34, where the Court concluded that a service which is "inseparably linked to the sale of wine" (which falls outside the product scope of the Agreement) must be deemed to be excluded from the scope of Article 36 EEA.
5.3 Free movement of goods
5.3.1 Product scope of the EEA Agreement
Before assessing whether a restriction of the rules on the free movement of goods is at hand, it is necessary to determine the extent to which alcohol beverages fall within the scope of the EEA Agreement.
The Authority notes that the EFTA Court has held that the rules in the EEA Agreement on free movement of goods do not apply to trade in wine.2l The EFTA Court has, however, found that the EEA Agreement's rules on free movement of goods as set out in Article 1 I of the EEA Agreement apply tobee?z, to whiskf3 and so called "alcopops" beverages that are based on beer or spirits.2a
Consequently, although wine is not subject to the EEA rules on free movement on goods, a large variety of other alcoholic beverages, such as beers, spirits and certain other types of alcoholic beverages, are subject to these fundamental rules. The assessment below on the compatibility of the Norwegian legislation with the EEA rules on free movernent of goods is therefore applicable to those alcoholic beverages only.
5.3.2 The existence of a restriction under Article 11 EEA
The EFTA Court as well as the Court of Justice have held that provisions of domestic legislation, which are separable from the operation of the monopoly and which have effect
" Case E-4104 Pedicel AS v Sosial- og helsedirektoratet, cited above, paragraph2g. " Case E-6196 Tore Wilhelmsen AS v Oslo Kommune, EFTA Ct. Rep. [1997] p. 53, paragraph 33' " Case E-1194 Ravintoloitsjain Liiton Kustannus Oy Restamarlc, EFTA Ct. Rep. 11994-1995) p. 15, paragraph39. 'o Case E-9l00 EFTA Surveillance Authority v Norway, EFTA Ct. Rep. [2002] p.72,paragtaph3l- Page 12
on trade within the EEA, must be examined in the light of Article 11 of the EEA Agreement (and Article 34 TFEU).25
In this respect, it is recalled that the free movement of goods is a fundamental principle of the EEA Agreement which is expressed in the prohibitlon, as set out in Article I 1 of the EEA Agreement, of quantitative^restrictions on imports between EEA States and all measures having equivalent effect26.
This Article 11 of the EEA Agreement thus prohibits any measures having an effect equivalent to quantitative restrictions on imporl and it applies to all national rules which are capable of hindering, directly or indirectly, actually of potentially, trade between the EEA States27.
the present In case, the Alcohol Act foresees in Section2-1, paragraph 3, that private importation may place. take However, as has been explained above, oity rrra"rtakings that are not related in any way to the seller of the beverages and duly registered can assist in the importation and delivery such of alcoholic beveragis into Norway.
The Authority is of the opinion that the system set out in Section 2-1, paragraph 3, of the Alcohol Act and Section l5-5, paragaph 2 of the Alcohol Regulation"amount to a restriction for the purposes of Article l l of the EEA Agreement.
For the reasons set out above in Section 5.2.3, the Authority considers that the Alcohol Act and Alcohol Regulation apply in a discriminatory manner.
The Norwegian legislation as it stands only allows for a private person to carry out the import by himself or by having the goods delivered by a transport company that is otherwise completely independent from the sales arangement at issue, see Section 2-1, paragraph 3 of the Alcohol and 15-1, paragraph 2 of the Alcohol Regulation. The seller may provide for the delivery by outsourcing it, but may not deliver the f,everages himself. The Authority considers that this is a limitation on private importation, that it has an impact on the way-alcoholic beverages can access the Norwegian market and that it restricts the possibility for private import of such beverages info Norway. Norwegian private importers wishing to purchase and have alcoholi" b"u".ages delirered from abroad, and the sellers wishing to sell and deliver such good., ui" confronted with potential hindrances in their process.
when these importers conclude a sales arrangement with a seller of beverages, that seller cannot himself carry out the delivery 9f the beverages into Norwuy; ui irroependent separate company needs to carry out the delivery. Such requi."..ni, may render the import of alcoholic beverages into Norway more difficult. This has, at least potentially if not actuallY, &11 effect on trade in those products and amounts to a measure having equivalent effect to a quantitative restriction on imports, prohibited under Article l l EEA.
case E-lglll, vin Trio ehf.v the lcelandic " state,-cite-d,above, paragraph 36. case c-l7o/04, Rosengren a'o.' v Riksdklagaren, ECR I-4107, paragraph [2007] 18, and case qieio ANETT,cited a;ove, paragraph 26 see case c-l47lo4 De Groot en slot Allium and Beio Zaden ECR r-245,paragraph the equivalent 120071 70 concerning 2' Article 34 TFEU. case E-4/04 Pedicel AS v sosial- og helsedirektoratet, cited above, paragraph 45. This is the classic Dassonville formula that the court of Justice procureur established in case B/74 du Roi v Gustaye Dassonville Ll974l ECR 837, paragraph 5. Page 13
For the reasons set out above, the Authority considers that the current rules set out in Section 2-l,paragraph 3 of the Alcohol Act and Section 15-5, paragraph2 of the Alcohol Regulation amount to a quantitative import restriction, prohibited by Article I I EEA.
5.3.4 Justifications
Norway's ar8uments
In its letter of 21 August2012, the Norwegian Government states that since the separation requirement is aimed at assessing whether an alrangement is to be seen as private importation, or a retail of alcohol in breach of the alcohol retail monopoly, it fails to see why presenting justifications is relevant. In any event, the Norwegian Government argues that the separation requirement as set out in Section 2-l,parugraph 3 of the Alcohol Act is proportionate (both suitable and necessary) in order to protect public health.
The separation requirement is held to be necessary in order to ensure that undertakings delivering the beverages are serious operators. Furthermore, the requirernent is considered not to be extensive, but rather sufficient in order to establish routines which guarantee that the deliverer has sufficient knowledge about the rules on age control, the ban on delivery to persons under the influence of alcohol and the time frames foreseen under the Norwegian Act as to when sales and delivery can take place.
Finally, the Norwegian Government points out that the experience from Finland and Sweden clearly shows that it is necessary to have a distinct functional and structural separation between the seller of the alcoholic beverages and the undertaking charged with the task of delivering the beverage, in order to prevent the establishment of selling arrangements in violation of the rules on the retail monopoly.
The Authority's assessment
The Authority notes at the outset that Article 13 of the EEA Agreement provides for certain exceptions to the general ban on quantitative import restrictions in Article 11 EEA.
The Authority notes furthermore that protection of public health is recognised explicitly in Article 13 EEA as justification for a restriction of the principle of free movement of goods.28
However, since the notion of public health provides for an exemption from the fundarnental principle, it must be interpreted strictly."
It is for the EEA States, within the limits of the EEA Agreement, to decide what degree of protection they wish to assure and the way in which that will be achieved.3o
However, any national rule likely to have a restrictive effect on imports can only be accepted if it is proportionate, meaning that health and life may not bg protected just as effectively by measures that are less restrictive of trade within the EEA.''
'" Case 178184, Commission v Germany, t1987] ECP.1227. " Case E-1194 Ravintoloitsjain Liiton Kustannus Oy Restamark, cited above, paragraph 56. Case E-5196, Ullensaker Kommune v Nille AS, Efta Ct. Rep [997] p. 30, paragraph 33. C-322101 'o Case E-4104 Pedicel AS v Sosial- og helsedirehoratet, cited above, paragraph 55. See also Case Deutscher Apothekerverband 120031 ECR I-14887, paragraph 103.