Article 7
This Decision is addressed to Amministrazione Autonoma dei Monopoli di Stato, Piazza Mastai, 11, I-00153 Rome. This Decision shall be enforceable pursuant to Article 192 of the Treaty. Done at Brussels, 17 June 1998. For the Commission Karel VAN MIERT Member of the Commission (1) OJ 13, 21. 2. 1962, p. 204/62. (2) OJ 127, 20. 8. 1963, p. 2268/63. (3) Law on the salt and tobacco monopoly, GURI (Gazzetta Officiale della Repubblica Italiana) No 199, 28. 5. 1942. (4) GURI 1 4, 7. 1. 1976. (5) GURI No 9, 13. 1. 1958. (6) GURI No 308, 22. 12. 1958. (7) Case 118/85 of 16 June 1987, Commission v. Italy [1987] ECR, p. 2599. (8) Judgment of the Court of Justice of 20 March 1985 in Case 41/83 Italy v. Commission [1985] ECR, p. 873. (9) OJ C 372, 9. 12. 1997, p. 5. (10) Article 1 of Law No 724/1975. (11) The Decree Law of 31 December 1992, converted into Law No 427 of 29 October 1993, transposes into Italian law Council Directive 92/12/EEC on the intra-Community movement of products subject to excise duty (OJ L 76, 23. 3. 1992, p. 1), as last amended by Directive 96/99/EC (OJ L 8, 11. 1. 1997, p. 12). (12) See the judgment of 14 December 1995 in Case C-387/93 Banchero [1995] ECR I, p. 4663. (13) See the judgment of 13 February 1979 in Case 85/76 Hoffmann-La Roche v. Commission [1979] ECR, p. 461. (14) In the course of the proceedings, examples were provided of recent launches of new brands by AAMS: in June 1996, the first month of the launch, AAMS sold 33 217 kilograms of MS E. Slim cigarettes and, in July 1996, also in the first month, it sold 35 543 kilograms of MS Personal cigarettes. These quantities are some seven times greater than the maximum allowed for foreign cigarettes. (15) It was stressed in the course of the proceedings that AAMS cigarettes are automatically distributed, from the first month of being launched, to all 'magazzini` and retailers. (16) AAMS states only that 'products may remain in stock for a long time in the distribution circuit (i.e. in the warehouses themselves) before reaching the retailer, in other words before the moment at which [AAMS] receives from the tobacco retailers the price for the sale of the products`. (17) OJ L 359, 8. 12. 1989, p. 1. (18) OJ L 151, 11. 6. 1992, p. 30. (19) OJ L 137, 30. 5. 1990, p. 36. (20) OJ L 210, 7. 8. 1985, p. 29. (21) According to AAMS, the supervisory power 'is a power consisting exclusively in checking that the activity of retailing complies with the requirement of the act granting such powers`. (22) In its judgment of 6 March 1974 in Joined Cases 6 and 7/73 Commercial Solvents v. Commission ([1974] ECR, p. 223), the Court of Justice held that the Commission had discretionary power to order measures to ensure its decision was effective, by requiring undertakings to do certain acts (paragraph 45). (23) The terms and conditions for public contracts to manage State monopoly goods shops are State measures and are not covered by these proceedings. However, the amendment to the specifications is taken into account here as relevant to the assessment of the need to impose specific measures on AAMS to ensure that the abuses in question are not repeated. (24) See footnote 23. (25) It should be noted here that Italian law requires, as an absolute precondition for placing a new brand of cigarettes on the Italian market, publication in the Official Gazette of the Italian Republic of a decree of the Minister for Finance adding the brand to certain schedules (Article 2 of Law No 825 of 13 July 1965 on the tax rules for products covered by the State monopoly, as amended by Article 27 of Decree-Law No 331 of 30 August 1993, converted by Law No 427 of 29 October 1993 (GURI No 225, 29.10.1993), and by Article 9 of Law No 76 of 7 March 1985. (GURI No 65, 16.3.1985)). The completion of this procedure is therefore to be regarded, to all intents and purposes, as a pre-condition to the placing on the market of new cigarette brands. (26) See point 61 and footnote 23. (27) Article 5 of Council Directive 72/464/EEC of 12 December 1972 on taxes other than turnover taxes which affect the consumption of manufactured tobacco (OJ L 303, 31.12.1972, p. 1). (This matter is currently governed by Article 9 of Council Directive 95/59/EC (OJ L 291, 6.12.1995, p. 40).) Up to August 1993, Italian legislation (Article 2 of Law 825/65) stipulated that 'the inclusion of each product subject to the State monopoly in the tariffs (...) and changes in that regard shall be effected by decree of the Minister for Finance in relation to the prices requested by suppliers for imported goods, after obtaining the opinion of the Administrative Board for State Monopolies, and in relation to the prices proposed by the said Board for other goods`. The Court of Justice of the European Communities declared that Italy had failed to fulfil its obligations under Article 5 of Directive 72/464/EEC by retaining legislation which did not expressly indicate and did not clearly entail an obligation on the part of the competent administrative authority to observe, under the conditions and within the limits laid down by the Directive, the principle that manufacturers and importers are free to determine the maximum prices of manufactured tobacco imported into Italy (judgment of 28 April 1993 in Case C-306/91 [1993] ECR I, p. 2133). In order to bring its legislation into line with that judgment, Italy adopted Decree-Law No 331/93, Article 27 of which, amending Article 2 of Law No 825/65, provides that 'retail selling prices and changes in those prices shall be established in line with the requests of manufacturers and importers`.