Hamburg/Brussels – On 14 September 2023, the European Court of Justice (ECJ) dismissed with legally binding effect a lawsuit brought by the Danish Chamber of Commerce (Dansk Erhverv) against the European Commission. In a complaint directed at the Commission in 2016, Dansk Erhverv had alleged that the authorities in Schleswig-Holstein and Mecklenburg-Vorpommern were granting unlawful state aid to North German cross-border traders. The background to the case is that the authorities deem it lawful for cross-border traders not to collect the can deposit. Cross-border traders sell beverages in disposable cans to customers from Scandinavia without charging the deposit, while the latter make an export declaration to the effect that they will not consume the beverages until they reach their home countries. The Commission rejected the complaint as unfounded. When Dansk Erhverv took legal action against this decision, the General Court of the European Union (EGC) instructed the Commission to re-consider Dansk Erhverv’s complaint. The EGC held the view that there was considerable doubt as to whether the practice was in breach of EU state aid law. One of the grounds for the EGC believing there might be such a breach was that by recognising the sales practices of the cross-border traders, the authorities failed to step in and thus to impose fines.
The association of border shop traders (IGG), represented by CMS, lodged an appeal against this ruling with the ECJ. This court has now accepted the appeal in full (Case C-508/21), thereby definitively rejecting the complaint by Dansk Erhverv. The ECJ confirmed that state aid can be ruled out because the competent authorities (supported by two court decisions) proceeded on the basis that it was lawful not to charge the can deposit, and there was thus no question of imposing a fine. The ECJ also does not see any requirement under state aid law on the part of the German authorities to extend the deposit on non-refillable containers to cross-border trade. Non-deposit sale is not in breach of European Union law, it held. The court stated that the EU Packaging Directive in particular does not include any obligation to extend the German deposit on non-refillable containers to cross-border trade. It pointed out that the deposit serves the purpose of ensuring that empty cans are returned, but this purpose cannot be achieved if consumers are unable to obtain a refund in their home country. This is the first time the ECJ has applied its Radlberger case law to cross-border B2C trade.
Overall, the judgment establishes that Scandinavian consumers can continue to engage in cross-border shopping without paying the deposit.
Formed in 2002, the IGG represents the interests of its member companies. Cross-border trade in Schleswig-Holstein and Mecklenburg-Vorpommern is geared to the needs of Scandinavian customers and plays an important role in the economy of the border regions. CMS has been advising the IGG since it was formed, and represented it in the Commission’s complaint procedure and subsequently before the EGC and the ECJ. Back in 2003, CMS gained decisions from the administrative courts in Schleswig-Holstein in favour of cross-border trade.
CMS Germany
Dr Michael Bauer, Partner, EU State Aid
Dr Fritz von Hammerstein, Partner, Environmental Law
Press Contact
presse@cms-hs.com
