Legal issue: Whether the Dassonville-formula against rules hindering intra-Community trade may cover non-discriminatory restrictions

Background of the case: The case concerned West German rules which governed the marketing of alcoholic beverages. According to the rules, the minimum alcohol strength of admissible categories of alcohol products was fixed at 25% of alcohol per litre. The applicant in the case had intended to import the liqueur ‘Cassis de Dijon’ into Germany from France, but was refused by the German authorities, because the liqueur only had alcohol content between 15 and 20 per cent. The applicant argued that the German rules constituted measures having equivalent effect to quantitative restrictions, but the German government cited human health and consumer protection in defense of its legislation. The rule in this case was not directly discriminating, since it equally applied to both national and foreign goods. Therefore, the question was if the Dassonville-formula would apply to restrictions which (as was in this dispute) were indistinctly applicable.

Decision: The ECJ came to the conclusion that it did. It stated that, although obstacles to movement within the Community had to be accepted in certain exceptional circumstances, the main rule was that they could not be tolerated. The only exceptions from the main rule would be if the rules were necessary in order to satisfy mandatory requirements relating in particular to:

-        the effectiveness of fiscal supervision,

-        the protection of public health,

-        the fairness of commercial transactions,

-        the defense of the consumer.

This list is not exhaustive. The arguments of the German Government regarding the public health and consumer protection concerns were found by the ECJ to be unconvincing.

The ECJ stated that once certain goods have been lawfully marketed in one Member State, they should be admitted into any other Member State without restrictions, unless the State of import could successfully invoke one of the mandatory requirements. This has been called ‘the principle of mutual recognition’. Member States must respect the trading rules of other Member States and may not seek to impose their own rules on goods which have already been marketed in another Member State.

Significance and implications: This case, commonly called ‘Cassis de Dijone case’, is widely regarded as, perhaps, the most important in the history of the ECJ. By extending  the scope of Article 28 of EEC Treaty (Article 30 at the time) to all indistinctly applicable measures which affected intra-Community trade, the ECJ brought into question many categories of national legislation, because all the rules which concern trade can, directly or indirectly, affect the free movement of goods. This approach gave to traders, who were unhappy with legislation which somehow regulated trade, a powerful tool to get the legislation declared void on the ground of its being contrary to Article 28.