Student id: 21080638

5LAW1025-0905-2022 –European Union Law

Task 1:

Case C-14/2022 The Lovely Liquor Vs France

Opinion:

1. National court put question about the purpose of article 34 & article 36 TFEU. Both articles

are related to main objective of community law i.e creation of internal market/common

market of Europe. To create internal market, member states are obliged to ensure four

basic freedoms provided in community law. Freedom of goods being most important

freedom among these freedoms has been ensured by prohibiting taxation and quantitative

restrictions. Prohibitions related to taxations/customs are given in article 28 TFEU (ex

Article 23 TEC) and article 30 TFEU (ex Article 25 TEC). Article 30 TFEU, not only prohibit

custom duties on imports and exports but also all charges having equivalent effect to that

of custom duties. Similarly article 34 & 35 TFEU (ex Articles 28 & 29 TFEU) prohibit

quantitative restrictions and measures that have equivalent effect to that of quantitative

restrictions on imports and exports respectively. Quantitative restrictions (QR) are either

‘quotas’ that are prohibited or measures having equivalent effect (MEQR) that are in

themselves are not quota restrictions but are trading rules or other measures that have

effect to restrict or hinder the entrance of an imported product or hinder the export hence

are equal to that of QRs and are contrary to article 34 TFEU or article 35 TFEU. 1 These

freedoms are not absolute and member states are allowed to restrict these freedoms in

certain circumstances with proportional measures these are called derogations. No

derogation is provided with respect to taxing provisions contained in article 30 TFEU but

certain exceptions are recognized by ECJ but quantitative restrictions under article 34

TFEU or article 35 TFEU are not absolute but proportionate measures can be taken by the

member state on the grounds of public morality, public security, public policy, protection of

1
Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837

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health of human or animal or plants, etc that are given in article 36 TFEU hence article 36

TFEU is available to protect member state from breach of article 34 TFEU that may lead to

state liability. All derogations contained in article 36 TFEU are legitimate public interests

but ECJ accepted that derogations beyond article 36 TFEU for indistinctly applicable

measures are also available if proportionate measures are taken to protect a legitimate

public interest which is called mandatory requirement.2

2. The closure of A36 motorway would result in complete stoppage hence it could be said

that it is a QR or Quota Zero but there is no explicit legislation or rule that prohibit passage

of goods but by allowing to demonstrate or then by closure to protect the life and liberty of

nationals and life and property of travelers, it is a measure that have effect equivalent to

hindering or restricting, directly or indirectly, actually or potentially3, the free movement of

goods hence is a MEQR4. National legislation, rule or notification of member state that is

only directed towards imported goods is a measure that distinctly applicable because it

differentiate in law and in fact between imported and domestic products/goods. Legislation

or rules of a member state that are equally applicable to both domestic and imported

goods/products are indistinctly applicable measure. An indistinctly applicable measure

does not differentiate between domestic or imported products but in fact effect more to

imported products than domestic products by putting dual burden on imported product to

comply with requirements of country where these are to be marketed 5. Cassis de Dijon

also provide derogation if measure is indistinctly applicable and taken to protect a

2
Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (‘Cassis de Dijon’)
[1979] ECR 649
3
Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837
4
Para [29] Case C-265/95 Commission v France (1997) ECR I-6959 & para [56] Eugen
Schmidberger, Internationale Transporte und Planzüge v Austria (2003) C-112/00
5
Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (‘Cassis de Dijon’)
[1979] ECR 649

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legitimate public interest (mandatory requirement) and measure is proportionate having

regard all the circumstances. The list of legitimate public interests (mandatory

requirement) is not exhaustive but new categories are also being recognized by ECJ.

Therefore it is important to first classify the measure as derogations of cassis de Dijon are

only available for indistinctly applicable measures and even public interest beyond those

given in article 36 TFEU may also provide ground of justification.

3. Article 34 TFEU & Article 35 TFEU deals with imports and exports respectively but in given

circumstances the route close is of transit but after reasoning given at Para [53] of

Commission V France and Para [61] of Schmidberger v Austria it can be concluded that

blockade of transit route like A36 motorway is also capable to attract the liability under

article 34 TFEU. Most important question to be answered would be whether or not

blockade of A36 motorway by private individuals would constitute a breach under article 34

TFEU as article 34 TFEU has only vertical effect hence private individuals cannot be sued

for breach of article 34 TFEU, only acts committed by state or its ammunition are liable to

be sued under article 34 TFEU. Positive act by state or state authorities easily attract state

liability but it has already been decided in the case of Commission Vs France that even the

passivity by state authorities to prevent impediments to free movement of goods by private

persons may also constitute a measure having equivalent effect under article 34 TFEU.

The principle established by commission vs France was affirmed at Para [62] in the case

of Schmidberger v Austria. At para [63] of of Schmidberger v Austria, it was further

suggested that added obligation is on member state when the issue is with regards to

major transit route. To answer question three of preliminary reference, it has already been

established at Para [64] of the Schmidberger v Austria that a member state by not banning

the demonstration that caused the complete closure of A36 motorway, a major transit

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route, for five hours is a MEQR that is incompatible with Union Law under article 34 TFEU

unless justified.

4. Answer to fourth question lies in Para [71] of the judgment of Schmidberger and also in the

case of Omega wherein in answer to preliminary questions by court Austria, ECJ replied

that fundamental rights are an integral part of general principles of community law and

courts are bound to ensure their observance including ECJ while interpreting and

enforcing community law. ECJ draws inspiration for enforcement of these fundamental

rights as general principles from constitutional tradition that are common in member states

and from other international treaties on the subject of fundamental laws. ECHR is one of

these international treaties to which most of member states are signatories. Further ECJ

declared that measures that are incompatible to human rights are not acceptable in Union

law.6 Protection of fundamental rights in community law as general principle is now

contained in Article 6(2) EU. Further these rights are now categorized and contained in

union law itself in the form of charter of fundamental rights of EU. Now these fundamental

rights can be enforced by union citizens to challenge a union legislation or national

legislation or rules. Further enforcement of these rights being a legitimate public interest is

used as derogation to restrict fundamental freedoms, including free movement of goods,

guaranteed by union law. Important point to note here for national court is that not all the

fundamental rights, like right to life, are absolute but rights like freedom of expression and

assembly are subject to legal exception. Courts are more willing to enforce the absolute

rights, like right to life, and it is for national court to decide whether allowing to exercise a

qualified right that then breaches the fundamental freedom of union law was justified

having regard to all circumstances.

5. At para [74] of Schmidberger lies the answer to fifth question where ECJ declared that

protection of fundamental human rights is a legitimate interest as both community law and
6
Case C-260/89 ERT [1991] ECR I-2925

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5LAW1025-0905-2022 –European Union Law

member states are required to respect fundamental rights. As the measure is indistinctly

applicable and mandatory requirement of cassis de Dijon is also present hence both article

36 TFEU and cassis derogations are applicable. It is already established in Schmidberger

that right of freedom of expression (article 10) and freedom of assembly (article 11) are

contained in ECHR and as facts provide also constitutional rights under French

constitution is a legitimate public interest hence ,in principle, French authorities are

justified to block the A36 Motorway for a while 7. With respect to the proportionality test, the

national court should consider that that demonstration that resulted into blockade of A36

Motorway were authorized under national law after request. The traffic was obstructed on

single occasion that only for five hours for protection of national and transporters and their

goods. Further there was no aim or purpose to obstruct goods of particular type hence it

would be proportionate measure, compatible with Union law.

6. The legislation applied by Germany, not to sell sherry below 30 percent alcohol contents,

is applicable to both domestic and imported products hence it is indistinctly applicable

measure. In distinctly measures are mostly article 34 TFEU compliant unless The Lovely

Liquor Company could show that the legislation in fact is putting dual burden on Company

to manufacture a sherry that can be sold in Germany. 8 It would be very easy for Lovely

Liquor to show that they are producing sherry of 25 percent hence to manufacture sherry

above 30 percent alcohol contents would be a dual burden and a product requirement

under Keck9. Further The Lovely Liquor can also argue that the German legislation is in

breach of article 34 TFEU under doctrine of mutual recognition given in the case of Cassis

De Dijon that declares that where a product is manufactured and sold lawfully, it should be
7
Case C-368/95 Familiapress [1997] ECR I-3689
8
Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (‘Cassis de Dijon’)
[1979] ECR 649
9
Joined cases C-267 and C-268/91 Criminal proceedings against Keck and Mithouard [1993]
ECR I-6097

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sold freely in other member states. This is given in the facts that Super sherry of The

Lovely Liquor Company is being lawfully manufactured in Spain and sold in Spain, Hungry

and Italy so German legislation is a MEQR under dual burden doctrine or product

requirement or mutual recognition so therefore is a breach of article 34 TFEU unless a

justification is available either under article 36 TFEU or under Cassis de Dijon.

7. Germany notice issued by the German authorities to prohibit the sale of Super Sherry with

alcohol contents less than 30 percent was based on “protection of public health” and it was

mentioned that there is a risk of induction of alcohol tolerance due to consumption of

diluted alcoholic beverages, to German citizens. This measure being a MEQR must be

justified either under article 36 TFEU or cassis de Dijon derogations. As protection of

public health is a legitimate public interest to be protected hence mandatory requirement of

cassis is also present but as the Ground of Public health is also available in article 36

TFEU, the case law under article 36 TFEU would be evaluated. First of all under Cassis de

Dijon principle of mutual recognition this ground would not be available, as diluted

alcoholic beverages are being consumed by other EU nationals and there is no EU

regulation, directive or other legislative instrument to suggest that diluted beverages would

cause alcohol tolerance. Further there is no such scientific data or WHO research to

suggest about alcohol tolerance issues by diluted beverages. Burden to prove that diluted

beverages cause alcohol tolerance would be on German authorities. Only reason that

German citizens are alcohol consuming nation is no ground for such measure. 10 Assuming

that protection of public health from alcohol tolerance that pose real threat is genuine aim

of the German authorities, even than the measure taken to complete ban is not

proportionate, plus it is a product requirement under the Test of Keck and the aim can be

achieved by selling arrangement like only selling on specific days or from specific point or

dealers etc that are not MEQR as per Keck so therefore justification under protection of
10
178/84 Commission v Germany (Additives in Beer) [1987] ECR 1227

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public health would not be available to German authorities and German legislation would

be incompatible to article 34 TFEU.

8. The answer to this question is very straightforward and well founded in union law. The

doctrine of supremacy of union law was developed by ECJ but now contained expressly

after treaty of Lisbon. Union is a supra-national framework with new legal order that is

superior to law of signing nations. By signing EC treaty, member states have limited

sovereign powers in the area of Union competence. Though member states can legislate

on share areas of competence but once there is union legislation, it will take precedence. 11

Union legislation is even superior to fundamental constitutional provisions in areas of its

competence.12 As the issue related to prohibition of sale of Super Sherry is related to

freedom of goods which is one of basic instrument of union law to create an internal

market and this area is in exclusive competence of Union hence no legislation of member

state unless allowed by the union law itself would be effective to take precedence over

union law. German legislation unless accepted as derogation under article 36 TFEU would

be incompatible with union law hence nullity and if not corrected, state liability may arise.

11
Case 6/64 Costa v ENEL [1964] ECR 585
12
Case 11/70 Internationale Handelsgesellschaft GmbH [1970] ECR I-125