Teaching EU substantive law classes always ends up with a student asking the question: “Why do so many cases before the ECJ deal with alcohol?” The next two minutes are usually dedicated to the explanation of the contents of crème de cassis: a drink rather unfamiliar to Dutch students.

And, indeed, many landmark cases of the Court of Justice do deal with the different treatments of products containing alcohol, both in free movement law (Cassis de Dijon, C - 120/78, Dassonville, C- 8/74, Deutsches Reinheitsgebot, C - 178/84) and in competition law (Delimitis, C - 234/89). The obvious answer to the student’s question is that it is not so much the crème de cassis or beer that matters, but the legal questions concerning market access and non-discriminatory market conditions.

Despite the emphasis on alcohol, a dedicated teacher would reframe the question, just like the ECJ probably would do in a preliminary reference procedure. The real question would be, why do so many cases concern the, unsuccessful, invocation of cultural heritage arguments by Member States? Why are the national heritage characteristics of “Branntwein” or “Beer purity” set aside from the functioning of EU internal market law? And, more importantly, do genuine national cultural preferences and interests still play a role in the internal market?

To answer these questions, let’s focus on perhaps one of Belgium’s most important national heritage products: beer.

In the case of Bierhuis Delmeyer vs Duvel Moortgat (Belgium Court of Appeals, Antwerp, 27 October 2016, NjW 2017, 370, p.743.) the applicant argued that Duvel, a Belgian beer brand, brewed such special and unique beers (such as La Chouffe, Duvel and Liefmans) that the relevant market should be determined as “special beers in Belgium.” The Duvel brewery has indeed claimed in the past to be the “market leader in Belgian special beers”. This claim resulted in an “abuse of dominance” lawsuit led by one of Duvel’s suppliers: Delmeyer. The Court of Appeals ruled that Duvel’s statement was not enough to establish “special beers” as a separate product market. Rather, as was the case in the Delimitis, the product market concerns “the national beer distribution market”, which requires a broad selection of beers: Belgian and non–Belgian beers. Therefore, the Court of Appeals dismissed Delmeyer’s argument that special beers and “lager beers” are not interchangeable. However the Court did so, not out of principle, but because of a lack of evidence. Apparently, there’s no accounting for taste when it comes to judicial review.

The above-mentioned judgment should be useful for every EU staffer in Brussels when arguing with their Belgian colleagues as to whether Belgian beers are incomparable to their own favoured national brands. Setting aside the “pub value” of this judgment, on a more serious note, the Duvel case shows that a national court is obliged to weigh the application of EU internal market law to some extent against “national cultural identity” arguments.

This also holds true for the enforcement of EU law by the European Commission. In its decision-making practice, the Commission frequently refers to article 167 TFEU when it comes to market coordination of the cultural sector. Article 167 (1) and (4) TFEU provide that “The Union shall contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore”. “The Union shall take cultural aspects into account in its action under other provisions of the Treaties, in particular in order to respect and to promote the diversity of its cultures.”

A good example in which the Commission had to take cultural aspects into account, with respect to the TFEU, is the recent prolongation of the Multiplied Gif Deduction Act (Geefwet) in the Netherlands (Case SA.49411, 12 December 2017 and Case SA.34357, 20 March 2013). Under this act, donations to cultural institutions are deductible from the taxable income of undertakings. There is only one condition: these cultural institutions must be registered as an “institute for general benefit” (“algemeen nut beogende instelling” or ANBI). Cultural ANBI’s must have a charitable nature. It is up to the Dutch government to list cultural entities, including undertakings with ANBI status. For instance, both the Rijksmuseum and a local theatre can have ANBI status.

In 2011, only Dutch cultural entities were eligible for ANBI status. After concluding an infraction procedure, the Commission determined that Dutch tax relief discriminated against foreign charities according to article 63 TFEU (Press release IP/11/429). After announcing a referral to the ECJ for infringing the free movement of capital, the Netherlands has submitted to the Commission’s demands and also registered non-Dutch cultural institutions as ANBIs.

In 2013, the Commission continued its investigation into the Multiplied Gift Deduction Act by establishing whether or not this measure constituted unlawful state aid. The Commission considered that, although ANBIs are charitable, state aid rules may apply when they perform economic activities. Under this scheme, corporate donors can deduct their gifts to cultural ANBIs. In 2013, and again in November 2017, the Commission concluded that these deductions did not provide an advantage to corporate donors (Case SA.49411, 12 December 2017 and Case SA.34357, 20 March 2013). However, the tax deduction scheme, indirectly accountable to the state, does trigger donations to a predefined group of undertakings in the cultural sector. Therefore the Commission considered that the tax reduction effects trade when it comes to those cultural ANBIs that attract international tourism, such as the biggest national museums. Nevertheless, the Commission declared any aid to such undertakings to be compatible with the internal market, on account of the fact that the measure contributes to the EU objective of promoting culture under article 167 TFEU.

The ANBI case delivers a clear-cut message from the Commission. Although preferential tax cuts are the most harmful aid instrument on the internal market, this does not necessarily apply to genuine cultural goals (Commission Statement 17/3714, 4 October 2017). If the gifts for museums and other cultural undertakings are used for non-commercial purposes, the Commission is ready to respect the discretion of the Member States. It is for the Member States to make this clear distinction. Accordingly, the Commission leaves the museums alone and focusses on bigger fish: multinationals that receive tax advantages, such as Apple and IKEA.

This case is exemplary of the broad interpretation and discretion that the Commission allows Member States when it comes to the invocation of cultural goals under article 167 TFEU. Previously the Commission went even further, by declaring aid for the hosting of international football tournaments as mainly promoting culture and therefore compatible with the goals of article 107 (3) (d) and 167 TFEU (Decision SA 35501, 18 december 2013, Euro 2016 and decision, SA.37109, 20 november 2013, Belgium). This is remarkable since, despite the wordings of article 167 TFEU, the discretion of Member States has never stopped the Commission in its tracks when it came to full scrutiny of other policy areas in which the Member States have discretionary powers, such as healthcare, social security and, indeed, tax policy.

The Commission’s policy may be leading us to a slippery slope. In the future, member States may want to interpret cultural objectives too broadly, in breach of internal market goals. But then again, when it comes to establishing genuine cultural objectives, the Duvel is in the details.