European Union: The Gourmet-Case

This article was written by Ulf Djurberg¹

A Revolution in the "Cuisine Suédoise" and a Major Development of EU Case Law?

1. Introduction - the Gourmet-case in the Swedish courts

In February this year, the Swedish Market Court delivered a historic judgement, declaring the Swedish general ban on commercial advertising of alcoholic beverages in periodicals incompatible with EU law. Since it is probably the first time in Swedish legal history that a legislative act has been ruled out by a supreme court, the judgement was followed by extensive coverage in Swedish and international press. Furthermore, the judgment being based on a preliminary ruling of the European Court of Justice (the "ECJ"), EU-sceptics could once again blame the Union for exporting contaminated goods to Swedish soil.

In 1997 the Swedish Consumer Ombudsman brought action against Gourmet, a periodical on food and drinks, in the Stockholm City Court, arguing that its advertising violated the general ban on commercial advertising of alcoholic beverages. Gourmet responded that the application of the Swedish ban contravened EU law principles on free movement of goods (Art. 28) and the freedom to provide services (Art. 49). The Stockholm City Court referred the case to the ECJ for a preliminary ruling. In its subsequent decision, the ECJ established that the Swedish ban was incompatible with the above principles of EU law, but left to Swedish courts to examine whether the ban could be justified i.e. proportionate to its objective to protect the health and life of humans.
In March 2002 the Stockholm City Court ruled that the ban was not proportionate to its objective. The judgement was appealed by the Consumer Ombudsman and in February this year, the Swedish Market Court confirmed the City Court’s judgement.

The remaining part of this article focuses on the main aspects of EU law handled by the ECJ.²

2. The Gourmet-case in the ECJ

2.1 Dasonville and Keck - Legal background

In its famous Dasonville judgement from the mid 70’s, the ECJ interpreted Art. 28 of the EU-Treaty as to cover any rule "capable of hindering, directly or indirectly, actually or potentially, intra-Community trade". This interpretation was in later case law imported to the area of free movement of services. It is obvious that the relevant ban to the Gourmet-case constitutes both a restriction on imports in to Sweden and a restriction to provide cross-border services, and would under the Dasonville doctrine be regarded as a breach of two of the fundamental provisions of EU law.

However, in the beginning of the 90’s, the ECJ shifted opinion in its Keck judgement holding that, contrary to what had been previously decided, national provisions restricting or prohibiting certain selling arrangements do not fall within the scope of Article 28, provided that the provisions apply to all relevant traders operating within the national territory and that they affect in the same manner, in law and in fact, the marketing of domestic products and products from other Member States.

The main issue in the Gourmet case was whether the ban in question fell within the scope of the Keck-rule, thereby falling outside EU-law.

2.2 New developments in EU case law

2.2.1 Introduction

In the Gourmet case, the ECJ had to consider whether the ban violated both the rules on free movement of services and the rules on free movement of goods.

2.2.2 The Free Movement of Services

Before the ECJ, Gourmet argued, to put it very simple, that the Keck-rule does not apply to services. The basis for this argumentation was, firstly, that an outright ban on advertising constitutes a restriction on the freedom to provide cross-border advertising service and, secondly, that there was no sign of the application of a Keck-rule in earlier case law.

Since the Court in the Gourmet case did not touch upon the possibility of a "Keck analogus" exception in the area of free movement of services, it could be presumed that the Gourmet-case was in fact a confirmation that the Keck-rule does not apply to services.

2.2.3 Free movement of goods

Gourmet argued that a general ban aimed at international, well-known, trading products preventing producers and distributors to use the most important measure to access and penetrate a specific national market cannot gain immunity from the Keck-rule. Gourmet further contended that the closing off effect of the ban was strengthen by the Swedish alcohol retail monopoly and the fact that the Swedish consumers are more familiar with Swedish than foreign products and brands.

In its reasoning in the Gourmet case, the ECJ makes a development of its Keck-judgement by stating that "such rules may not be of such a kind as to prevent access to the market or to impede access any more for imported products than it impedes the access of domestic products". Thus, the ECJ allegedly introduced/confirmed a market access test to the Keck-rule at the same time making clear that the Keck-rule shall not be interpreted in a static and formalistic way or, indeed, that the ECJ reversed the Keck-judgement and returned to the Dasonville doctrine (or a refined Dasonville doctrine).

A trader might wish that the Gourmet-judgement abandoned the Keck-rule and implied a return to the Dasonville-doctrine. However, the ECJ was very clear when it changed the Dasonville case law and one would assume that a fundamental change to that rule would have been indicated just as clearly. The general idea must therefore be that the Gourmet case only provides for a development of the Keck-rule, exempting it from application in the area of free movement services at the same time introducing a market access test. The ECJ stated clearly in the Gourmet case that the prohibition of all direct advertising for alcoholic beverages impeded access to the market by imported products more than by domestic products. By introducing an access to the market test the ECJ further made clear that the Keck-rule shall not be interpreted in a formal non-dynamic way.

The Gourmet case is a revolution in the "Cuisine Suèdoise" and a development of EU case law!