Opinion of the Advocate-General

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Mr President,

Members of the Court,

1 . In this reference for a preliminary ruling the Court must once again consider the scope of Article 30 of the EEC Treaty . It will be required to give a ruling on the question whether the prohibition of measures having an effect equivalent to quantitative restrictions on imports which is contained in that article also applies to a national measure which in principle prohibits the sale of goods on Sunday .

Background

2 . The main proceedings are criminal proceedings brought by a United Kingdom local authority, the Torfaen Borough Council ( hereinafter referred to as "the Borough Council "), against a large operator of do-it-yourself stores, B & Q plc ( hereinafter referred to as "B & Q ").

B & Q is charged with having contravened Sections 47 and 59 of the United Kingdom Shops Act 1950 ( hereinafter referred to as "the Shops Act ") by opening its retail shop premises in Cwmbran to the public on Sundays .

For the wording of the relevant sections of the Shops Act I refer to part I.2 . of the Report for the Hearing . As is indicated therein, there are a good many exceptions to the prohibition; furthermore, it is not disputed that the law is disregarded to a considerable extent and that in many places it is enforced only sporadically . It must also be observed that the law is not applicable in Scotland .

3 . The parties to the main proceedings are agreed that B & Q has contravened the aforementioned provisions of the Shops Act and that the only possible defence for B & Q' s conduct might be found in Article 30 of the EEC Treaty . Nor is there any dispute between the parties about the evidence which B & Q has adduced in support of its arguments concerning the consequences of the ban on Sunday trading for imports from other Member States . The main points which emerge from that evidence and which were accepted as established facts by the Cwmbran Magistrates' Court ( 1 ) are as follows :

( 1 )... ( not relevant ).

( 2 )... ( not relevant ).

( 3)In the year 1987/88 B & Q purchased from other Member States items worth well in excess of U*L 40 000 000 . *hat amount represents approximately 10% of B & Q' s total purchases .

( 4)As a result of the enforcement of the ban on Sunday trading there has been a substantial and continuing reduction in sales turnover in a number of B & Q' s stores ( including the store at Cwmbran ). The evidence indicates that this loss of sales has not recovered over time but has been maintained . The average loss of sales for the stores in question in the years 1986/87 and 1987/88 is nearly 23 %.

( 5)The reduction in sales is across the board, in the sense that all the items of stock appear to be affected .

( 6)The reduction in sales has been confirmed by checking the level of orders placed by B & Q with a number of its EEC suppliers . Following the enforcement of the ban on Sunday trading a significant reduction in those orders was observed .

( 7 )... ( not relevant ).

( 8)It follows that the enforcement of the ban on Sunday trading indirectly leads to a reduction in absolute terms in the volume of imports into the United Kingdom from other Member States of many goods sold by B & Q in their shops .

4 . In those circumstances the Cwmbran Magistrates' Court decided to refer three questions to the Court concerning the compatibility of the Shops Act with Articles 30 and 36 of the EEC Treaty . Those questions read as follows :

"( 1)Where a Member State prohibits retail premises from being open on Sunday for the sale of goods to customers, save in respect of certain specified items sales of which are permitted, and where the effect of the prohibition is to reduce in absolute terms the sales of goods in those premises, including goods manuafactured in other Member States, and correspondingly to reduce the volume of imports of goods from other Member States, is such a prohibition a measure having equivalent effect to a quantitative restriction on imports within the meaning of Article 30 of the Treaty?

( 2)If the answer to Question 1 is in the affirmative, does such a measure benefit from any of the exceptions to Article 30 contained in Article 36, or from any other exception recognized by Community law?

( 3)Is the answer to Question 1 or Question 2 above affected by any factor so as to render the measure in question a means of arbitrary discrimination or a disguised restriction on trade between Member States or a measure lacking in proportionality or otherwise unjustified?"

I - The first question

5 . In the first question the Court is asked to assume that "the effect of (( the ban on Sunday trading )) is to reduce ... the sales of ... goods manufactured in other Member States, and correspondingly to reduce the volume of imports of goods from other Member States ". That part of the question is based on the factual assumption contained in the order for reference ( see paragraph 3 hereof, points 6 and 8 ) that the enforcement of the ban on Sunday trading leads directly to a reduction in absolute terms of imports into the United Kingdom from other Member States of many goods sold by B & Q in their stores .

The order for reference of the Cwmbran Magistrates' Court is a "consent order", which means that its terms, including the wording of the preliminary questions, have been settled by mutual agreement of the parties . Nevertheless, it appears from the written observations submitted by the Borough Council and the United Kingdom and from the arguments put forward at the hearing that there is still much disagreement about the way in which the first preliminary question is to be understood by the Court .

Should the reference be "reworded"?

6 . In the first place, the United Kingdom observes that it is not proven that on the Sunday in question B & Q sold goods originating in other Member States . It also takes the view that, since the Shops Act does not make the selling of goods an offence but simply the keeping open of a shop, B & Q has in any case contravened the law and the preliminary questions are unnecessary for the purposes of the main proceedings . In any event, it requests the Court to make it clear that any question of incompatibility between the relevant provisions of the Shops Act and Community law can arise only in so far as those provisions are applicable to imported goods .

Secondly, the United Kingdom and the Borough Council point out that it has not been demonstrated that the disputed provisions of the Shops Act actually restrict the total volume of imports into the United Kingdom ( see part II.1 and 3 of the Report for the Hearing ).

Thirdly, at the hearing the United Kingdom and the Borough Council put forward an additional argument in support of their submission that the Court should not attach any importance to the indirect effect which the national court found that the Shops Act had on imports into the United Kingdom . They take the view that the effect referred to in the order for reference is not relevant because it is only felt by an individual trader and there is no evidence of an effect as against a specific product .

7 . I find none of those three arguments convincing . As regards the usefulness of, or the necessity for, this preliminary question, I can be brief . As the United Kingdom itself states, the assessment of the necessity for or the usefulness of a preliminary question is a matter for the referring court alone . ( 2 )

The proposition that a national measure could be declared incompatible with Article 30 only in so far as such a measure was applicable to imported goods is correct in the sense that Article 30 ( or any other provision of Community law ) is not applicable in "purely internal" situations . ( 3 ) In the present case there is no question of the situation being purely internal : from the wording of the first question and the factual background it is clear that there is an "element going beyond a purely national setting ".

The second argument seems to me even less compatible with the case-law of the Court . In its judgment in Dassonville the Court made it clear, and since then has continuously repeated, that "all trading rules ... which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade" are to be regarded as measures having an effect equivalent to quantitative restrictions . ( 4 ) In its decisions the Court has accordingly made it clear that a trader who challenges a national measure on the ground that it constitutes a prohibited measure having equivalent effect does not need to demonstrate that the measure actually restricts intra-Community trade or restricts it overall . The Court has rejected attempts to show by means of statistics that imports of the product concerned have increased and disregarded the possibility that other factors might compensate for the hindrance in question . ( 5 ) This is logical : but for the restrictive measure imports could increase still further .

The only cases in which the Court has accepted that a measure was to be regarded as falling outside the scope of Article 30 on account of its effect in practice are those cases in which the Court came to the conclusion that the rules in question could not lead to a restriction of imports and exports between Member States, ( 6 ) or where the measure in question had "in fact no connection with the importation of ... products ...". ( 7 ) The factual context of those judgments was quite specific : each case concerned measures with respect to which the Court, on the basis of an empirical judgment, came to the conclusion that they did not, or could not, have an effect on intra-Community trade . The United Kingdom and the Borough Council suggest that in the present case the Court is faced by the same kind of situation and that those judgments are therefore determinative as regards the answer to be given to the preliminary question . In my view, this is not correct : according to the national court' s findings of fact, imports into the United Kingdom have been reduced to some extent as a result of the application of the ban on Sunday trading . The Court is therefore asked to assume that there is a causal link between the contested legislation and the reduction in imports; such a link was not found in the Oebel, Blesgen or Forest cases .

8 . Nor can I agree with the third argument concerning the "relevance" of the national court' s findings of fact . According to the decisions of the Court, even where a trade restriction is found to exist with regard to an individual trader, the measure producing the restriction may fall within the scope of Article 30 . ( 8 ) In my view, that is the proper approach . Whilst it is true that an interpretation of Community law given in a preliminary ruling applies erga omnes, judgment is given with reference to the application of national rules to a well-defined factual situation arising in the main proceedings . It is certainly not always possible ( nor desirable ) that in a preliminary ruling the Court should express its views on application situations which go beyond those arising in the main proceedings and of which the precise facts are not known or insufficiently known .

Finally, I would also hesitate to accept the assertion that in the case now before the Court there is no evidence, on account of the general scope of the provisions of the Shops Act, of a barrier against a specific product . The question which arises in this case is whether the contested rules create a barrier within the meaning of Article 30 with regard to the products in which B&Q deals . This is what the national court clearly finds to be the case . ( 9 )

Does the Shops Act contain "trading rules"?

9 . The considerations set out above lead me to the conclusion that there are no convincing reasons to reject the national court' s factual assumptions as irrelevant and to re-word the first question .

The question in point is therefore whether, and if so which, national rules found to have a certain restrictive effect on imports may still fall outside the scope of Article 30 of the EEC Treaty . B & Q considers that this possibility does not arise : the contested provisions of the Shops Act must be classified as falling squarely within the principle laid down in Dassonville and therefore prima facie fall within the prohibition laid down in Article 30 . The Borough Council as well as the United Kingdom and the Commission have, however, argued that the principle laid down in Dassonville is either inapplicable in this case or does not lead to the conclusion that the contested provisions fall within the scope of Article 30 .

10 . According to the Borough Council, the contested legislation is not simply a set of "trading rules" within the meaning of the judgment in Dassonville but is an expression of the "police power" which the Member States have retained under Article 30 . In the observations of the Borough Council the expression "police power" or "police law" is primarily defined according to the consequences to which such a measure is likely to give rise . They are rules which are too remotely connected with intra-Community trade and whose restrictive effects are the unavoidable consequence of the general regulation of social or commercial life . The Borough Council' s contention ( which it considers to be borne out by the judgments in Oebel and Blesgen, cited above ) is that such rules fall outside the prohibition laid down in Article 30 if they are applied without distinction .

11 . Without linking its argument to the term "police measure" the United Kingdom argues that in its case-law on Article 30 of the EEC Treaty the Court makes a distinction between measures applicable to a specific product and measures having general scope . In the case of measures of the first kind, a disparity between the existing bodies of national legislation results almost inevitably in a restriction of inter-State trade . Where, however, measures having general scope are concerned, it appears from the case-law of the Court that these do not fall within the scope of Article 30 of the EEC Treaty unless they are of a discriminatory nature or in practice place imported products in a more unfavourable position than domestic products . Rules regarding working or opening hours, or rules stipulating which goods may be offered for sale in specific sales outlets, do not fall under the general regulation of social or commercial life . Even if they have a certain restrictive effect, they do not prevent the importation or the marketing of imported goods; their effect ( if they have any effect at all ) cannot be determined precisely .

12 . I can see various objections to the approach of the Borough Council and the United Kingdom . The application of the limiting criterion which they propose is certainly not straightforward . What is a "too remote link with intra-Community trade" and what falls under the term "general regulation" or "measures having general scope"? How many products or sectors must a measure be applicable to in order to be regarded and classified as a measure of general scope?

More important, however, is the question whether the aforementioned approach is in fact compatible with the case-law of the Court . For the creation of a new category of ( police ) measures which, on the one hand, are applicable to the production and marketing of goods but, on the other hand, are not trading rules there is no support at all in the decisions of the Court . That principle has just been confirmed in the Court' s judgment of 18 May 1989 in the case of The Queen v Pharmaceutical Society of Great Britain, ( 10 ) in which it was held that a rule requiring pharmacists to supply only the medicinal products specifically mentioned in the doctor' s prescription may constitute a measure having equivalent effect . Yet the measure concerned was a "neutral" rule of professional ethics which had no demonstrable connection with the importation of products . Nevertheless, from the established fact that imports of foreign pharmaceutical products had nearly dried up after the rule had been in force for a short while the Court concluded that the possibility could not be ruled out that the rule formed an obstacle to intra-Community trade; the question whether or not the rule was to be characterized as a trading rule was not considered . ( 11 ) Another example is provided by the judgment in the Buet case ( 12 ) in which the Court held that a French rule prohibiting the sale of "educational material" by means of canvassing constituted an obstacle to the importation of reading material for the learning of a foreign language ( see paragraphs 7 to 9 of the judgment ).

The aforementioned decisions provide an appropriate reminder that an analysis of a national measure with reference to Article 30 of the EEC Treaty should focus on its effects ( with regard to the restriction of trade ) rather than on its nature ( general or concerning specific products ). It is true that it is easier to adduce evidence of the existence of an obstacle to trade in the case of a measure applying to a specific product than in the case of a general measure . But I do not see why an obstacle to trade might not just as well arise from a general measure as from a measure directed at a specific product .

The various categories of "measures applying without distinction"

13 . Allow me to recall, by way of introduction to this point, the observations submitted by the Commission . The Commission proceeds on the basis of the generally accepted distinction between "discriminatory measures" and "measures applying without distinction ". In the second group it distinguishes three different categories according to the nature of the measures in question . The first category consists of measures which regulate the conditions ( as to nature or composition, size, shape, packaging, labelling and denomination ) which products must satisfy to be admitted to the market . A disparity between the various national rules in this category will inevitably create barriers to trade because goods legally manufactured or brought into circulation in the Member State of exportation have to be adapted in order to be sold in the Member State of importation . A second category of measures are those which prohibit the importation and manufacture ( or simply the marketing ) of certain products . These measures impose an absolute ban on importation in respect of the products which they concern and as such may be regarded as quantitative restrictions on imports rather than as measures having equivalent effect . The third category of measures relate to the circumstances in which goods may be sold or used ( where, when, how and by whom ). Restrictions on shop-opening hours clearly fall within this category .

In the case of measures in the third category, the Commission considers that the link with the importation of goods is more remote . They do not prevent imports but may reduce them by imposing restrictions on outlets or uses of the goods falling within their scope ( and thus on the demand for those goods ). Those barriers are, however, quite different in nature from the barriers which arise from the first two categories : whilst the trade barriers in the first two categories arise from the disparities between the various national rules, the barriers in the third category are created by the very existence of the rules; any disparity is immaterial . In the Court' s case-law the Commission has identified three cases in which the Court ruled on measures belonging to the third category : they are the Oebel, ( 13 ) Blesgen ( 14 ) and Forest ( 15 ) cases . In its view, those judgments are also decisive in the present case .

14 . Before I come to my own assessment, it would be useful to point out that a clear line of development is evident in the Court' s case-law on national measures falling under Article 30 of the Treaty . At the outset it was made clear that a national measure which was discriminatory ( in form or, as was quickly emphasized, in substance ) towards imported goods was caught by the prohibition laid down in Article 30 . In that situation, which does not arise in this case, the Court considered the measure in question to be permissible only on one of the grounds of justification mentioned in Article 36 .

15 . The Court subsequently considered the prohibition laid down in Article 30 also applicable in the case of measures applying to national and imported products without distinction . This situation involves measures which are not discriminatory in their aims but which are de facto more burdensome for imported products than for domestic products, in other words they place imported products in a disadvantageous position in relation to domestic products . In the famous judgment in the "Cassis de Dijon" case the Court held that in principle such measures also fall under the prohibition laid down in Article 30 :

"Obstacles to movement within the Community resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions may be recognized as being necessary in order to satisfy mandatory requirements ...". ( 16 )

The main consideration underlying that decision is that such disparities between national laws may result in serious obstacles to intra-Community trade since they may necessitate extra expense or additional efforts in order to make the manufacture or the marketing of the product comply with laws differing from one Member State to another . The rules involved here are either rules relating to the composition, size, shape, weight, presentation, labelling, designation or the packaging of products ( 17 ) or rules relating to permissible sales methods . ( 18 ) As the Commission has correctly pointed out, in this category there is a causal link between the disparity and the trade barrier . Such measures are therefore not permissible under Article 30, at least where they are not necessary in order to satisfy "mandatory requirements", nor acceptable on the basis of the grounds of justification listed in Article 36 . That prohibition applies, of course, only in the absence of common rules and pending the adoption of a harmonizing directive pursuant to Article 100 et seq . of the Treaty .

16 . In the present case it is established that the contested United Kingdom legislation does not affect imported products any differently than domestic products . The national court found that the reduction in sales occurring as a result of the enforcement of the ban on Sunday trading is "across the board", that is to say that it affects all the goods offered for sale by B & Q . Moreover, B & Q has not stated that it has to vary its marketing methods as a result of a disparity between the various bodies of national legislation governing closing days . There is therefore no evidence that the production or marketing of the imported products sold by B & Q is more difficult than the production or marketing of domestic products .

In such a case may it still be feared that the aim of Article 30, namely the integration of the national markets, will be jeopardized? In his Opinion in the Cinéthèque case ( 19 ) Mr Advocate General Sir Gordon Slynn answered that question in the negative :

"... where a national measure is not specifically directed at imports, does not discrimiante against imports, does not make it any more difficult for an importer to sell his products than it is for a domestic producer, and gives no protection to domestic producers, then in my view, prima facie, the measure does not fall within Article 30 even if it does in fact lead to a restriction or reduction of imports ". ( 20 )

In the case of the French legislation at issue in the Cinéthèque case, such an additional difficulty for imports was not demonstrable either . In the words of the Advocate General :

"The importer can in fact import . He is then on exactly the same footing as the domestic trader . The latter gets no extra benefit over the importer, the former suffers no extra detriment over the French trader as a result of the ban on the exploitation of video-cassettes . The factor which would lead a trader in France not to buy from a French video distributor ( inability to sell or hire ) is the same as that which would lead him not to buy from a distributor in another Member State . In this respect both distributors are subject to the same conditions of trade . They are effectively operating in the same market . Article 30 cannot have been intended in this respect to give the distributor in another Member State better conditions than the domestic distributor . It may be that if it was patently unreasonable to put imports on the same footing as domestic products that the measure could be bad for that reason . That however is not the position here and in my view this law does not fall within Article 30 ". ( 21 )

The Court did not take that view . Yet in the judgment it was acknowledged that the system of rules in question

"... does not have the purpose of regulating trade patterns; its effect is not to favour national production as against the production of other Member States, but to encourage cinematographic production as such" ( paragraph 21 ).

Even so, the Court considered that the prohibition laid down in Article 30 was in principle applicable :

"Nevertheless, the application of such a system may create barriers to intra-Community trade in video-cassettes because of the disparities between the systems operated in the different Member States and between the conditions for the release of cinematographic works in the cinemas of those States . In those circumstances a prohibition of exploitation laid down by such a system is not compatible with ( Article 30 ) unless any obstacle to intra-Community trade thereby created does not exceed that which is necessary in order to ensure the attainment of the objective in view and unless that objective is justified with regard to Community law" ( paragraph 22 of the judgment ).

17 . In expressing those considerations the Court made it clear that the prohibition laid down in Article 30 may also be applicable to rules which do not discriminate against imported goods nor make the production or marketing of imported goods more difficult than the production and marketing of domestic goods . In my view, this situation concerns the case where rules, either on their own or as part of an entire legal and economic context, can lead to a national market being screened off, or access to that market being made unacceptably difficult, less profitable or less attractive for economic operators from other Member States .

In fact, this situation arose in the Cinéthèque case : the Court found that the French rules imposed a marketing ban which as a rule lasted longer in France than in other Member States . ( 22 ) This marketing ban meant that access to the French market was ( temporarily ) closed to undertakings from other Member States which exploited video-cassettes and which were not subject to such strict rules in the country of exportation . The obstacle to intra-Community trade