Question 1

SnacsForYou ('SFY') is a French snack food manufacturer which supplies its products in France and Germany. SFY's most successful product is its 'snaxchips'. SFY attributes the huge success of its snaxchips to the attractiveness of the product packaging. Five years ago, SFY developed a new colour-enhancing coating, which contains the chemical benzyme, for use on its snaxchips' paper packaging.

SFY now plans to supply its snaxchips in Greece but has learned of Greek legislation which may affect its plans. In response to lobbying from Greek supermarkets wishing to protect their market, Greece has recently introduced regulations prohibiting the sale of snack foods in theatres and cinemas.

Additionally, the Greek Government has introduced environmental legislation which prohibits the use of benzyme for product packaging, claiming that benzyme can render paper non-recyclable. However, a spokesperson for the Greek re-cycling industry has stated that another chemical, marzine, also used in the manufacture of paper packaging, has a far greater adverse impact on the paper re-cycling process than benzyme. Most Greek packaging manufacturers use marzine in their products. None uses benzyme.

Answer 1

SFY cannot import its products to Greece because of the legislation, which may be a breach of Union free movement of goods provisions. The prohibitions on the sale of snack foods in theatres and cinemas and the use of benzyme are MEQRs. These were defined by the Court of Justice in Dassonville, a case concerning imports of Scotch whisky. Here, Belgian legislation required imported goods bearing a designation of origin to be accompanied by a certificate of origin issued by the state of origin. Traders who imported Scotch whisky from France into Belgium were prosecuted for breach of this legislation. In their defence, the traders claimed that the legislation was an MEQR. The ECJ held that the requirement for a certificate of origin for certain goods breached Article 34 TFEU because it hindered the import of the product. Similarly, the two Greek provisions hinder the import of snaxchips. They constitute a disincentive for SFY to import because the prohibition on sale in theatres and cinemas reduces sales overall and the prohibition on benzyme means that the snaxchips cannot be sold in their current packaging. However, it could be that Greece can justify the benzyme prohibition under the Cassis rule of reason. In Cassis, the ECJ held that environmental protection comprises a 'mandatory requirement'. Provided the relevant measure satisfies a mandatory requirement and is proportionate to its objective, it will not breach Article 34 TFEU. A mandatory requirement sets aside the assumption that provided goods have been lawfully produced and marketed in one Member State, there is no reason why they should not be introduced into another (the principle of mutual recognition). Greece may have some difficulty in arguing persuasively that it has evidence of the risk of bnezyme and that the measure is proportionate, given the statement by the spokesperson for the Greek re-cycling industry concerning the effects of benzyme and marzine. Whilst the Greek Government could conceivably justify the prohibition on benzyme, there appears to be no good reason for its prohibition on the sale of snack foods in theatres and cinemas. Therefore, this measure is an MEQR and a breach of Article 34 TFEU.

Bad points

This is not a strong answer. It muddles together discussion of two separate factual and legal issues (the two separate restrictions), missing one important area of the law (Keck on 'selling arrangements'). The answer includes some superfluous matter, giving too much detail on the facts of Dassonville. A better answer would have been divided into shorter paragraphs.

The answer makes a fundamental mistake, which is common in many answers on the free movement of goods. It fails to make a clear distinction between the two restrictions on trade, namely the prohibition on sale in theatres and cinemas and the prohibition of the use of benzyme. These measures must be discussed separately, since different legal rules must be applied to them.

One consequence of combining discussion of the two provisions is that an important area of the law is missed. In relation to the prohibition on sale in theatres and cinemas the answer should first consider the application of Dassonville and then move on to consider the application of Keck. In fact, this measure is very likely to fall within Keck, as a 'selling arrangement' that applies to all affected traders operating within the national territory and affecting in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States. Thus, the prohibition is very unlikely to breach Article 34 TFEU. If the prohibition were to be held to be in breach, it could not be justified by the Greek Government on the grounds of pressure from the supermarkets, as this would fall neither within the Cassis rule of reason nor within the Article 36 TFEU derogation.

The answer gives too much superfluous detail on the facts of Dassonville. A better answer would focus on the legal principle; the definition of MEQRs - and its application, with minimal reference to the facts of the case.

Quite correctly, the answer addresses Dassonville, in which the Court of Justice defined MEQRs. However, the answer's treatment and application of Dassonville is incomplete. The Court's definition of MEQRs should be set out in full, or paraphrased, and then applied directly to the facts, in the two separate sections dealing with the two Greek provisions, respectively. As noted above, the section concerning the prohibition on sale should then move on to consideration of Keck.

There is an error of law; environmental protection was not one of the mandatory requirements set out in Cassis but was recognised by the Court of Justice as an additional mandatory requirement in Danish Bottles.

The answer should have been divided into manageable paragraphs. Overlong paragraphs are very unhelpful to the reader whereas short, punchy paragraphs provide focus to the reasoning. In addition, the main court of the European Union should now be referred to as the Court of Justice (of the European Union), rather than the Court of Justice.

Good points

The answer discusses Cassis reasonably fully, correctly identifies the Cassis rule of reason as applicable to the facts, correctly points out the importance of proportionality, and makes a good attempt at applying the legal principles to the facts.

Answer 2

The Treaty on the Functioning of the European Union (TFEU) provides for an internal market in which the free movement of goods between Member States is secured. This question concerns the free movement of goods.

The two Greek provisions, which will be considered separately, prevent SFY from importing its snaxchips into Greece. The measures may constitute MEQRs, thereby breaching Article 34 TFEU.

The prohibition on the sale of snack foods in theatres and cinemas falls within the Dassonville formula as a trading rule enacted by a Member State that is capable of hindering interstate trade. SFY's products cannot lawfully be sold in theatres and cinemas. This reduces their marketability to the extent that SFY may decide not to import them into Greece at all. However, the rule in Keck applies here, since the Greek rule is a 'selling arrangement' that applies to all affected traders in Greece and has no greater impact on imports than on the domestic products. This means that the Greek provision is not an MEQR and does not infringe Article 34 TFEU.

Applying Dassonville to the prohibition on the use of benzyme, it is likely that this provision constitutes an MEQR. The provision is a trading rule enacted by Greece which directly and actually hinders interstate trade. Snaxchips cannot be sold lawfully in Greece in their current packaging and therefore SFY has no incentive to import them into Greece. The provision is indistinctly applicable, falling within Article 3 of Directive 70/50, as a measure applying equally to both the imported and domestic products.

The benzyme prohibition may fall outside Article 34 TFEU if Cassis principles apply. In Cassis, the Court of Justice held that if a measure is justified by a mandatory requirement, there will be no breach of Article 34 TFEU, provided the measure is indistinctly applicable (Commission v Ireland), and proportionate to its objective. The Cassis mandatory requirements are: the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer. In Danish Bottles, the Court of Justice added environmental protection to the list of mandatory requirements set out in Cassis. Greece claims that the prohibition of benzyme is justified on environmental grounds.

The Greek government may have a legitimate justification for the prohibition. However, there must be evidence of the risk (San Jose Scale) and the prohibition must be proportionate (Cassis, Walter Rau). The statement by the spokesperson for the Greek re-cycling industry concerning the risks of benzyme and marzine raises doubts about the strength of the evidence and proportionality. Most Greek producers use marzine rather than benzyme. This suggests that Greece has adopted the provision as a protectionist measure.

This is a much better answer, providing more detail and generally focusing on relevant information.

Bad points

A significant omission in the answer is consideration and application of the principle of mutual recognition under Cassis, in relation to the justification of the benzyme prohibition. Both Cassis principles; mutual recognition and the rule of reason; must be discussed and applied.

The answer includes some unnecessary material. The full list of the four Cassis mandatory requirements is superfluous and detracts from the conciseness of the answer.

The answer tends to be too definitive in its conclusions. It is always useful to remember that the facts of a problem question are likely to be incomplete or leave areas of doubt and that it is rarely possible to be completely certain about a conclusion. So, for instance, a definitive conclusion regarding the application of Keck would depend on more extensive evidence of the impact of the Greek provision than is provided in the question.

The answer should end with a very brief conclusion.

Good points

The answer helpfully begins with a statement of the context, the free movement of goods in the internal market. It recognises the distinction between the two Greek provisions, both in factual and legal terms, and discusses them separately, dealing with the applicable law in each case.

The legal principles are clearly and concisely set out and applied. For instance, the answer sets out the Dassonville definition of MEQRs and applies it, separately, to each prohibition. The rule in Keck is clearly and concisely stated and applied. The Cassis rule of reason is explained and the relevant mandatory requirement is identified and applied.

The answer is well-planned and is argued in a structured fashion. The language is clear and straightforward, avoiding complex and convoluted sentences. Paragraphs are no longer than they need to be and are used effectively to structure the argument.

Suggested answer

This question concerns the free movement of goods within the internal market. This internal market is defined in Article 26(2) TFEU as ‘an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties’. SFY wishes to import its product from France to Greece but is hindered in doing so by the two provisions of the Greek legislation, the prohibition on the sale of snack foods in theatres and cinemas and the prohibition of the use of benzyme in product packaging. SFY seeks advice on the application of the EU free movement of goods rules to these provisions.

The prohibition on the sale of snack foods in theatres and cinemas may be a measure having equivalent effect to a quantitative restriction. If so, it is a breach of Article 34 TFEU. Article 34 prohibits quantitative restrictions and all measures having equivalent effect (MEQRs). In Dassonville, the Court of Justice defined MEQRs as 'all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially interstate trade'. Applying this definition to the Greek provision, there is indeed an actual or potential, direct or indirect hindrance to interstate trade. The market for snaxchips in Greece is limited because it excludes theatres and cinemas. SFY's is therefore likely to be able to sell less of its products than otherwise. This could constitute a disincentive to import and a hindrance to interstate trade.

However, in Keck the Court of Justice held that 'selling arrangements' do not fall within the Dassonville formula 'provided that those provisions apply to all affected traders operating within the national territory and provided they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States'. Such provisions do not impede market access for imported products any more than for domestic products and fall outside Article 34. Keck applies to 'selling arrangements' and not to rules relating to the goods themselves, such as packaging, content, and labelling. Applying Keck, the Greek provision is a 'selling arrangement', seems to apply to all affected traders in Greece, and does not appear to have any greater impact on imported snack foods than on domestically produced snack foods. The provision is unlikely to be an MEQR and in breach of Article 34. If the prohibition were to be held to be a breach, it could not be justified by the Greek Government on the grounds of pressure from the supermarkets, as this would fall neither within the Cassis rule of reason nor within the Article 36 TFEU derogation.

The prohibition on the use of benzyme may be an MEQR. Applying Dassonville, the provision is a trading rule enacted by Greece which directly and actually hinders interstate trade. Snaxchips cannot be sold lawfully in Greece in their current packaging and therefore SFY has no incentive to import them into Greece. If SFY were to adapt its packaging to comply with the legislation, this would make snaxchips less attractive to consumers and entail cost. The Greek provision thus appears to be an MEQR and a breach of Article 34 TFEU. The provision is indistinctly applicable, falling within Article 3 of Directive 70/50, as a measure applying equally to both the imported and domestic products.

Greece claims that the prohibition of benzyme is justified on environmental grounds. In Cassis, the Court of Justice set out the principle of mutual recognition, holding that there is no reason why goods lawfully produced and marketed in one Member State should not be introduced into another. Applying this principle, since France and Germany clearly regard benzyme as acceptable, there is no reason why it should be banned in Greece. The assumption of mutual recognition will be set aside if one of the 'mandatory requirements' applies, under the Cassis 'rule of reason' or an Article 36 derogation applies. If a measure is justified by a mandatory requirement, there will be no breach of Article 34, provided the measure is indistinctly applicable (Commission v Ireland), and proportionate to its objective. In Danish Bottles, the Court of Justice added environmental protection to the list of mandatory requirements set out in Cassis.

Applying all these principles, the Greek government may have a legitimate justification for the prohibition. The measure is indistinctly applicable, so Cassis can apply. However, the Greek government will need to provide evidence of the risk (San Jose Scale) and demonstrate that the prohibition is proportionate to that risk (Cassis, Walter Rau). The statement by the spokesperson for the Greek re-cycling industry concerning the comparative risks of benzyme and marzine appears to raise doubts both about the strength of the evidence and the proportionality of the measure. Indeed, the fact that most Greek producers use marzine rather than benzyme suggests that Greece has adopted the provision as a protectionist measure.

In conclusion, the prohibition on the sale of snack foods in theatres and cinemas is unlikely to breach EU free movement of goods rules. By contrast, the prohibition on the use of benzyme could well constitute a breach that cannot be justified. As such, SFY could seek to challenge this prohibition in the Greek courts.