Before Sweden became a member of the European Union (EU), Sweden had two monopolies on alcohol. First, a wholly state-owned company held the import monopoly on all alcoholic beverages to Sweden, and second, Systembolaget (the Swedish Alcohol Retail Monopoly), a wholly state-owned company, was the holder of the alcohol retail monopoly in Sweden. After Sweden became a member of the EU on 1 January, 1995, only the second, the retail sale monopoly, survived.

The monopoly and Systembolaget have been criticised for the high prices of alcoholic beverages, limited opening hours and limiting individuals' options.

The Swedish alcohol law (Alkohollagen) includes a regulation under which alcoholic beverages may be imported into Sweden only by persons authorised to undertake the wholesale of those goods and retail sales companies. In addition, alcoholic beverages may be imported by any individual of at least 20 years of age travelling to Sweden, if the beverages are intended for personal consumption. Sweden applied these regulations as they implied that private individuals were not allowed to import alcoholic beverages to Sweden without personally undertaking the transport thereof, i.e. including a prohibition to buy alcoholic beverages on the internet from another EU member state.

Despite the national legislation, some private individuals residing in Sweden imported alcoholic beverages by buying them on the internet. One of those individuals was Klas Rosengren. From his place of residence in Sweden Rosengren ordered, by correspondence and without an intermediary, cases of bottles of wine produced in Spain. These wine cases, imported into Sweden without being declared to customs, were confiscated on the ground that they had been unlawfully imported in contravention of the alcohol law.

The national District Court and the Court of Appeal confirmed the confiscation of the goods. The judgment of the Court of Appeal was appealed against to the Supreme Court. The national Supreme Court took the view that its decision depended on the compatibility of the Swedish legislation with the EC Treaty, as the issue in question concerned the prohibition in principle on all residents against directly importing alcoholic beverages into Sweden, without personally undertaking the transport thereof. It should be mentioned that the proceedings in Sweden were a criminal case.

The Swedish Supreme Court requested that the European Court of Justice (ECJ) renders a preliminary ruling on whether a measure under which private individuals are prohibited from importing alcoholic beverages amounts to a quantitative restriction on imports within the meaning of article 28 EC.

The ECJ declared that a measure such as the one in the alcohol law, under which private individuals are prohibited from importing alcoholic beverages directly into Sweden, without personally transporting them, amounts to a quantitative restriction on imports within the meaning of article 28 EC. The fact that the alcohol law required the holder of the retail sale monopoly, Systembolaget, on request, to supply and therefore, if necessary, to import the beverages in question did not make any difference, according to the court.

The ECJ also decided whether the paragraph could be justified under article 30 EC on grounds of protection of the health and life of humans. The Court declared that the measure under which private individuals are prohibited from importing alcoholic beverages as it is unsuitable for attaining the objective of limiting alcohol consumption generally and, as it is not proportionate for attaining the objective of protecting young persons against the harmful effects of such consumption, cannot be regarded as being justified under Article 30 EC on grounds of protection of the health and life of humans.

The judgment clearly states that member states in the area of alcoholic beverages can not automatically with success refer to public health as a reason for protectionist barriers.

As regards the Swedish alcohol retail monopoly, the ECJ judgment reduces the Swedish state monopoly, since from now imports by private individuals will be not only possible, but also legal. This implies that Systembolaget does not have a monopoly any longer and individuals residing in Sweden will have a right to import alcoholic beverages via the internet, without personally transporting them from other EU member states.

One of the reasons why private individuals residing in Sweden chose to buy alcoholic beverages through the internet was to avoid high taxes on alcohol. However, in its judgment rendered in November 2006, the ECJ confirmed that a person must transport the alcoholic beverages by himself to avoid paying tax on the alcohol in his country of domicile. This implies that a private individual importing alcoholic beverages to Sweden bought on the internet still has to pay Swedish taxes on the imported alcoholic beverages, i.e. the prices for alcoholic beverages bought on the internet will not be significantly lower compared to the Systembolaget prices for alcoholic beverages.

The ECJ judgment is groundbreaking as it clearly states that the Swedish monopoly was in conflict with the EC Treaty. The impact of the judgment for individual persons in Sweden is that they will be able to import any alcoholic beverages and will not be bound to Systembolaget's limited opening hours. This decision effectively opens the Swedish market to alcohol sales through new channels.

Sofia Haga is a senior associate at Magnusson in Stockholm, which represented the claimant in this case.