2019 B

Question 2
Mario and Luigi own a private company that imports olive oil in plastic bottles
from Italy to Denmark. There have been widespread reports in the Danish
media that some Greek olive oil has been contaminated with potentially
poisonous chemicals at the stage of production. This was blamed by the media
on the use of plastic bottles. The Danish Minister of Health issues an emergency
order prohibiting the sale of olive oil in non-glass containers taking effect in one
week’s time. This is to protect the environment and ensure the safety of Danish
consumers. Advise Mario and Luigi on how European Union law related to the
free movement of goods may apply to these circumstances.
(Art 34, QR & MEQR, Art 36, Casis de, Keck)
General remarks
A question about free movement of goods, still the ‘core’ of the internal market.
Law cases, reports and other references the examiners would expect you to use
Dassonville (whisky in Belgium), Rewe-Zentrale AG v
Bundesmonopolverwaltung für Branntwein (Cassis de Dijon) Keck and
Mithouard, Italian Trailers, Scotch Whisky Association.

ANSWER:
This problem question raises various issues with regards to the law of the free movement of
goods.
In answering this question, advice will be given to Maria (M) and Luigi (L) in regards to whether
Denmark can be held liable for breach of free movement of Goods (FMOG). If there is a breach
it will be reported to the European Commission (EC), which play the role of a watchdog and
supervises the penalty that is to be imposed on defendant member states. The matters related
to this concept of European Union (EU) law will be discussed in details.
The FMOG is one of the fundamental aims of the EU in order to facilitate economic growth
within the member states. It is divided into Art. 28-300, Art 110 and Art. 34-36 of the Treaty of
the functioning of EU (TFEU), where first two deals with pecuniary and the last one dealing with
non-pecuniary hindrances.
Art. 28-30 is concerned with cross border taxation with the focus on the effect of the measures
as seen in the case of Commission v Italy (Statistical Levy), Art. 110 prohibits discriminatory
taxation (commission v UK (Wine and Beer). Art 34 is concerned with quantitative restriction on
import and Art. 35 deals with exports. This is the question which mainly deals with Art. 34 of
Treaty on the functioning Europium union as M and L imports olive oil in plastic bottle s to
Denmark. so, we now advise to M and L in regards to imports olive oil in Denmark.
According to the facts M and L own a private company of Olive oil, which may be consider ed as
a goods as per Commission v Italy (Art Ttreasure); where stated that goods are any product that
can be valued in terms of money and forms the basis of a commercial transaction. Also FMOG
provisions were only appl ied yin inter-state trade; here Italy to Denmark is in the ambit of
inter-state trade as they are different countr iesyand have to cross the border.
As per Art. 34 TFEU, quantitative restriction on imports and all measures having equivalent
effect (MEQR) shall be prohibited between member states (Walter Rau, Estee Lauder Cosmetics
v Lancaster). MEQR was defined by Art 2 (measures only apply in imported goods) and Art 3
(measures apply both domestic and foreign goods) of Directive 70/50 and later confirmed by
the case of Dassonville as a restriction will be an MEQR if it is hindering directly or indirectly,
actually or potentially, intra-community trade between member states which is equivalent to
quantitative restriction.
In this scenario, there are no restriction s on the number of imported goods, so this is not the
case of Quantitative restriction (QR) as per Geddo v Ente Nazionale Risi and Compagnie v
Promalvin.
But according to fact, this is the case of Measures having equivalent effect to a quantitative
restriction (MEQR) as they make a potential hinderance by blame to use of plastic bottles by M
and L company and the danish ministry order to prohibited the sale of olive oil in non-glass
container in Commission v Ireland (Buy Irish). Where the Irish goods council was carrying out a
publicity campaign to persuade Irish customers to buy local products rather than imports
goods. As like here Denmark was trying to encourage to not to buy the plastic bottles olive oil
which is one of the hindrances to M and L company and held to be a MEQR as per Buy Irish.
MEQR can be occurred either d istinctly and indistinctly applicable. Distinctly applicable
measures are those which make importation more difficult and costly compared to domestic
product and do not apply equally to domestic and foreign product as per Firma Denkavit, Van
Tiggel. And indistinctly applicable measures are those which are apply equally to domestic and
foreign goods but the effect s are disadvantage ous for the imported goods and a protection
nature can be shown as per Dassonville, Ccommission v Ireland (Buy Irish). According to facts
there is no direct statement for not to buy the L and M’s companies olive oil and it’s the rule
apply in domestic and foreign goods equally, that’s why it may be consider ed as an indistinctly
applicable measure. Also, it will be a MEQR if a “protective nature” can be shown.
It is important to distinguish between distinctly and indistinctly applicable MEQR because the
available derogations are different for each kind of breach. For distinctcly applicable MEQR,
only Art 36 derogation is available but Art 36 and later Cassis De Dijon’s defence are provided
for Indistinctly applicable MEQR.
Denmark may be held liable for breach of FMOG for applying indistinctly applicable MEQR.
Unless they can show that the measure taken by Denmark was proportionate and can be
justified either Under Art 36 or under the principles of Cassis De Dijon’s “mandatory
requirement.”
Proportionality is a principle that raises questions as to whether the measures adopted by a
member state are suitable for securing the objective it aims to achieve and secondly, whether
the measure is going above the beyond than what is necessary (De Coster, Blanco & Febretti). It
was applied successfully in the case of Omega v Bonn, where the English game of paintballing
was held to be against human dignity protected under German Constitution as it simulated
murder. The court held that even though this was a restriction of the right to provide services,
the measure taken were proportionate and justified and did not go beyond what was
necessary.
Therefore, if Denmark can show that the measures taken by them to protect the environment
and ensure the safety of Danish consumers was proportionate then they can move on to
justifying their actions eighter under Cassis De Dijon or the derogations of Art. 36. Denmark
may argue under Art 36 derogation of protect ingthe health and life of humans, animals and
plants and also the to protect the environment. Here, widespread reports state that Greek
olive oil has poisonous chemical on the use of Plastic bottles and may be argue that there was
risk for environment and danish consumers as per Commission v UK (UHT Milk), Poultry Meat,
Klas. Moreover, there was no specific evidence that there was a real risk, that’s why it is
unlikely that they will be able to get a defence.
Denmark may be able to argue a defence under consumer protection and as the prohibitions
w ere as for protect ing the to consumers rights as applied in Walter Rau. Also, the court also
ruled that MS can still have their own rules for domestic producers as they fulfilled the
conditions that Denmark’s prohibition is equal to domestic; the rule is to protect “mandatory
requirement” as defence of the consumers and protect environment; that’s why it will be
consider as a proportionate. So, we can say that all the conditions are met and the Denmark
breach was fall outside the scope of Art 34 TFEU and are legal. Here, the keck principles i sn
inapplicable as it was not concerned with product requirement s such as contents, shape, size
etc.., and not selling arrangement s such as when, where, how the product can be sold.
Therefore, M & L will be advised that Denmark will be held not liable for b reach of FMOG. If
they can justify their actions, which is likely.