Prohibiting price promotions or discounts which result in tobacco products being retailed below a stipulated price level
The case involves Colruyt, which operates a chain of supermarkets in Belgium under the same name. Following an investigation by the relevant Belgian authorities, it was found that Colruyt made use of tobacco advertising measures prohibited under Belgian law and it was ordered to pay a fine. Belgian law prohibits, inter alia, advertisements for tobacco/tobacco-based products. Any communication which is aimed at promoting sales is regarded as constituting advertising.
On 21 September 2016, the CJEU found that such national legislation, which prohibits retailers from selling tobacco products at a unit price lower than the price indicated by the manufacturer or importer on the revenue stamp affixed to those products, in so far as that price has been freely determined by the manufacturer or importer, is not precluded under EU law.
The CJEU held that such national provision is not encompassed by the situation referred to in Article 15(1) of Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco. It also held that the Belgian provisions do not breach Article 34 TFEU and the right to free movement of goods because it applies to all relevant traders operating within the national territory and because it does not concern the determination by importers of the products from other Member States of the price indicated on the revenue stamp; those importers remain free to set that price. Moreover, such legislation neither requires nor encourages the adoption of agreements between suppliers and retailers and its direct effect is to set the price charged by retailers for the sale of tobacco products to the consumers, namely the price indicated by the manufacturer or importer on the revenue stamp affixed to those products and hence it does not render Article 101(1) TFEU ineffective.
This article appears in the JHA October 2016 Tax Newsletter, which also features:
