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On the Law on Alcohol Control and the Rules for Licensing the Production of Alcohol Products

Case No. 3/02-7/02-29/03

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

RULING

ON THE COMPLIANCE OF PARAGRAPH 4 (WORDING OF 2 JULY 1997) OF ARTICLE 1, PARAGRAPH 1 (WORDING OF 18 APRIL 1995) OF ARTICLE 2, ITEM 2 (WORDING OF 18 APRIL 1995) OF PARAGRAPH 1 OF ARTICLE 3, PARAGRAPH 2 (WORDING OF 10 DECEMBER 1998) OF ARTICLE 4, ARTICLE 13 (WORDING OF 18 JULY 2000), PARAGRAPH 1 (WORDING OF 2 JULY 1997) OF ARTICLE 30 AND PARAGRAPH 4 (WORDING OF 20 JUNE 2002) OF ARTICLE 44 OF THE REPUBLIC OF LITHUANIA’S LAW ON ALCOHOL CONTROL, AS WELL AS ON THE COMPLIANCE OF ITEMS 7 AND 9 (WORDING OF 22 JANUARY 2001) OF THE RULES FOR LICENSING THE PRODUCTION OF ALCOHOL PRODUCTS AS APPROVED BY THE RESOLUTION OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA (NO. 67) “ON THE APPROVAL OF THE RULES FOR LICENSING THE PRODUCTION OF ALCOHOL PRODUCTS” OF 22 JANUARY 2001 WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

26 January 2004
Vilnius

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Armanas Abramavičius, Egidijus Jarašiūnas, Egidijus Kūris, Kęstutis Lapinskas, Zenonas Namavičius, Augustinas Normantas, Jonas Prapiestis, Vytautas Sinkevičius, and Stasys Stačiokas

The court reporter—Sigutė Brusovienė

Egidijus Rumbutis, a senior consultant of the Legal Department of the Office of the Seimas, Girius Ivoška, a chief specialist of the said department, acting as the representatives of the Seimas of the Republic of Lithuania, a party concerned, and Andrius Miliūnas, a chief specialist of the Legal Division of the Legal Department of the Ministry of Agriculture of the Republic of Lithuania, acting as the representative of the Government of the Republic of Lithuania, a party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, on 7 January 2004, in its public hearing, considered case No. 3/02-7/02-29/03 subsequent to these petitions:

1) the 11 January 2002 petition of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether the provisions of Paragraph 4 (wording 2 July 1997) of Article 1 and Paragraph 1 (wording of 2 July 1997) of Article 30 of the Republic of Lithuania’s Law on Alcohol Control are not in conflict with the principle of a state under the rule of law which is entrenched in the Preamble to the Constitution of the Republic of Lithuania and the provisions of Paragraphs 2 and 3 of Article 25 of the Constitution of the Republic of Lithuania;

2) the 1 February 2002 petition of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether the norms of Paragraph 1 (wording of 18 April 1995) of Article 2, Item 2 (wording of 18 April 1995) of Paragraph 1 of Article 3, Article 4 (wording of 10 December 1998) and Article 13 (wording of 18 July 2000) of the Law on Alcohol Control and the norms of Items 7 and 9 (wording of 22 January 2001) of the Rules for Licensing the Production of Alcohol Products as approved by the Resolution of the Government of the Republic of Lithuania (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 are not in conflict with Paragraphs 1 and 4 of Article 46 of the Constitution of the Republic of Lithuania;

3) the 29 May 2003 petition of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether the provision of Paragraph 4 (wording of 20 June 2002) of Article 44 of the Republic of Lithuania’s Law on Alcohol Control that enterprises, establishments and organisations must pay a fine of ten thousand litas for the first violation of the requirements of Article 30 of this law, and a fine of twenty thousand litas for the same repeated violation committed within five years from the imposition of the fine are not in conflict with Paragraphs 2 and 3 of Article 46 of the Constitution of the Republic of Lithuania and the principles of justice and a state under the rule of law which are entrenched in the Constitution of the Republic of Lithuania.

By the Constitutional Court’s decision of 29 January 2003, the 11 January 2002 and 1 February 2002 petitions of the Vilnius Regional Administrative Court were joined into one case and it was given No. 3/02-7/02. By the Constitutional Court’s decision of 29 October 2003, the 29 May 2003 petition of the Vilnius Regional Administrative Court was joined with case No. 3/02-7/02 and it was given No. 3/02-7/02-29/03.

The Constitutional Court

has established:

I

1. The Vilnius Regional Administrative Court, the petitioner, considered an administrative case. The court suspended the consideration of the case by its 11 January 2002 ruling and applied to the Constitutional Court with a petition requesting an investigation into whether the provisions of Paragraph 4 (wording 2 July 1997; official gazette Valstybės žinios, 1997, No. 67-1660) of Article 1 and Paragraph 1 (wording of 2 July 1997) of Article 30 of the Law on Alcohol Control (Official gazette Valstybės žinios, 1995, No. 44-1073; hereinafter also referred to as the Law) are not in conflict with the principle of a state under the rule of law which is entrenched in the Preamble to the Constitution and the provisions of Paragraphs 2 and 3 of Article 25 of the Constitution.

2. The Vilnius Regional Administrative Court, the petitioner, considered an administrative case. The court suspended the consideration of the case by its 1 February 2002 ruling and applied to the Constitutional Court with a petition requesting an investigation into whether the norms of Paragraph 1 (wording of 18 April 1995) of Article 2, Item 2 (wording of 18 April 1995) of Paragraph 1 of Article 3, Article 4 (wording of 10 December 1998; official gazette Valstybės žinios, 1998, No. 114-3188) and Article 13 (wording of 18 July 2000; official gazette Valstybės žinios, 2000, No. 64-1939) of the Law on Alcohol Control and the norms of Items 7 and 9 (wording of 22 January 2001) of the Rules for Licensing the Production of Alcohol Products (hereinafter also referred to as the Rules) as approved by the Government Resolution (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 (Official gazette Valstybės žinios, 2001, No. 8-230) are not in conflict with Paragraphs 1 and 4 of Article 46 of the Constitution.

3. The Vilnius Regional Administrative Court, the petitioner, considered an administrative case. The court suspended the consideration of the case by its 29 May 2003 ruling and applied to the Constitutional Court with a petition requesting an investigation into whether the provision of Paragraph 4 (wording of 20 June 2002; official gazette Valstybės žinios, 2002, No. 65-2632) of Article 44 of the Law on Alcohol Control that enterprises, establishments and organisations must pay a fine of ten thousand litas for the first violation of the requirements of Article 30 of this law, and a fine of twenty thousand litas for the same repeated violation committed within five years from the imposition of the fine are not in conflict with Paragraphs 2 and 3 of Article 46 of the Constitution and the principles of justice and a state under the rule of law which are entrenched in the Constitution.

II

1. The 11 January 2002 petition of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether the provisions of Paragraph 4 of Article 1 and Paragraph 1 of Article 30 of the Law on Alcohol Control are not in conflict with the principle of a state under the rule of law which is entrenched in the Preamble to the Constitution and the provisions of Paragraphs 2 and 3 of Article 25 of the Constitution, is based on the following arguments.

1.1. The legislature points out the striving to influence certain choice of advertisement consumers as a distinctive criterion of information which should be considered alcohol advertising. The State Tobacco and Alcohol Control Service indicated that the statements “If we compare two people who have the same amount of cholesterol in their blood, those who never drink wine are at risk of the occurrence of heart and blood vessels diseases 3 times more frequent than those who occasionally drink it” and “Does wine protect arteries? Yes. Therefore, wine is not considered an alcoholic drink” made in the article “Some Answers to Some Questions and Statements About Wine” published in No. 2 of the July 2001 supplement Verslo teisė of the publication Verslo žinios which is mentioned in the administrative case undoubtedly influence the choice of advertisement consumers as far as they relate the consumption of alcohol with curative characteristics. The Service decided that the fact that any information relates the consumption of alcohol with curative characteristics is sufficient to regard such information as alcohol advertising, i.e. the Service did not investigate in what context the information had been published and what was its nature, i.e., whether it had been commercial or not commercial information.

1.2. Freedom of information is not only freedom to inform (i.e. to disseminate information), but also the right to receive information. Untrue information, i.e. disinformation, is usually prohibited by means of laws of states. Thus, the requirement of truth should be applied to information (as well as to advertisement). The petitioner pays attention to the fact that the State Tobacco and Alcohol Control Service considers the information mentioned in the administrative case to be untrue and misleading on the grounds of the fact that, under Article 1 of the Law on Alcohol Control, ethyl alcohol is classed as belonging to materials of narcotic effect, although this statement is immediately followed by an explanation that this is not a straightforward conclusion. An article published in the magazine Verslo klasė indicates: “This explains what foreigners call the paradox of French blood vessels. Seeing the quantity of wine which is drunk in this country, they do not understand why there are so few people with heart and blood vessels diseases in France.”

1.3. Given the said legal regulation of the limitation on alcohol products advertisement and the said practice of the limitation on alcohol advertising implemented by the state institution, the petitioner has doubts whether the notion of alcohol advertisement as entrenched in Paragraph 4 of Article 1 of the Law on Alcohol Control is not in conflict with the provisions of Paragraphs 2 and 3 of Article 25 of the Constitution. In the opinion of the petitioner, while applying Paragraph 4 of Article 1 of the Law on Alcohol Control together with the limitations on alcohol advertisement established in Paragraph 1 of Article 30, a threat arises that also non-commercial information will be classed as limited alcohol advertising, i.e. as prohibited information, in the absence of either the grounds or necessity for limiting it.

1.4. The petitioner maintains that the notion of alcohol advertisement introduced in the Law on Alcohol Control should be considered legally deficient, because it does not establish any clear criteria on how commercial information should be set off against non-commercial; in addition, it no longer contains a notion of indirect alcohol advertisement which included more criteria for the classification of information as alcohol advertisement in the law in its former wording. The law also provides for no exceptions for the forms of information (for instance, special publications for respective groups of specialists (doctors, businessmen, etc.)). The legislature presents only one basic criterion of information which should be considered alcohol advertisement: the striving to influence the respective choice of advertisement consumers. The petitioner notes that the practice of the State Tobacco and Alcohol Control Service demonstrates that both the news from special foreign magazines and a note on a glass presented in a humorous context are regarded as alcohol advertisement only upon this single criterion. As long as such a notion of alcohol advertisement exists, persons publishing information are not certain whether any information on alcohol published by them will be considered as alcohol advertisement. In the opinion of the petitioner, due to such indefinite regulation, the law creates preconditions for the executive institution to establish the content of the norm itself while applying the law. The Law on Alcohol Control establishes fairly strict liability for violations of limitation on alcohol advertisement which, according to the amount of fines, more corresponds to criminal liability. Due to the specified arguments the petitioner has doubts as to whether Paragraph 4 of Article 1 of the Law on Alcohol Control in conjunction with Paragraph 1 of Article 30 which limits alcohol advertisement are not in conflict with the principle of a state under the rule of law as entrenched in the Preamble to the Constitution, which implies clarity of legal norms.

1.5. The petitioner also has doubts as to whether the limitation on information which is not clearly defined does not violate the constitutional right to impart and receive information, i.e. Paragraphs 2 and 3 of Article 25 of the Constitution, because due to the strict sanctions which are established in Paragraph 4 of Article 44 of the Law on Alcohol Control the spreader of information can be constrained to refuse to publish any information on alcohol including the results of scientific research, sociologic polls, etc., and, alongside, such information would become inaccessible to people. On the other hand, those who prepare information usually specify foreign mass media, including states of the European Union, as the sources of the said information, while these sources may be directly available in Lithuania and the same information is easily accessible for the public on the Internet.

2. The 1 February 2002 petition of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether the norms of Paragraph 1 of Article 2, Item 2 of Paragraph 1 of Article 3, Article 4 and Article 13 of the Law on Alcohol Control and the norms of Items 7 and 9 of the Rules for Licensing the Production of Alcohol Products as approved by the Government Resolution (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 are not in conflict with Paragraphs 1 and 4 of Article 46 of the Constitution, is based on the following arguments.

2.1. According to the petitioner, under Paragraphs 1 and 4 of Article 46 of the Constitution, the priority is granted to the freedom of economic activity, private business, fair competition, monopolisation of the market is prohibited, participants (subjects of economy) of the market are nor differentiated according to the structure of their capital, etc. The petitioner points out that the legislature, while detailing the provisions of the Constitution in other legal acts, prescribed that it is prohibited to establish different rights, duties or privileges of certain legal persons for the purposes of discrimination.

2.2. In the opinion of the petitioner, the impugned norms of Paragraph 1 of Article 2, Item 2 of Paragraph 1 of Article 3, Article 4 and Article 13 of the Law on Alcohol Control and the impugned norms of Items 7 and 9 of the Rules for Licensing the Production of Alcohol Products as approved by the Government Resolution (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 grant privileges to concrete subjects of economy, Item 2 of Paragraph 1 of Article 3 of the Law aims at limiting the private profit received from production and import of as well as trade in alcoholic drinks, while the goal which is worded in Paragraph 1 of Article 2 of the Law to decrease the general consumption of alcohol, alcohol abuse and its damage on health and economy may be achieved by creating equal conditions for all participants of the market. In the opinion of the petitioner, the impugned norms of the Law and the Rules are in conflict with Paragraphs 1 and 4 of Article 46 of the Constitution.

3. The 29 May 2003 petition of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether the provision of Paragraph 4 of Article 44 of the Law on Alcohol Control that enterprises, establishments and organisations must pay a fine of ten thousand litas for the first violation of the requirements of Article 30 of this law, and a fine of twenty thousand litas for the same repeated violation committed within five years from the imposition of the fine are not in conflict with Paragraphs 2 and 3 of Article 46 of the Constitution and the principles of justice and a state under the rule of law which are entrenched in the Constitution, is based on the following arguments.

3.1. Article 44 of the Law on Alcohol Control provides for economic sanctions for violations of this law. Item 4 of this article provides that enterprises, establishments and organisations must pay a fine of ten thousand litas for the first violation of the requirements of Articles 29 and 30 of this law, and a fine of twenty thousand litas for the same repeated violation committed within five years from the imposition of the fine. The petitioner maintains that these norms of the law do not provide for a possibility of differentiating an economic sanction according to the noxiousness of violations, the number and extent of violations committed at one time, as well as according to other circumstances. The legislature has established a strictly defined amount of a fine, but not the minimum and the maximum limits or an amount relative to annual or fixed in another way income of a subject of commercial-economic activity. The petitioner has doubts as to whether the legal regulation, when an economic sanction is established by a strictly defined sum, is in compliance with the provisions entrenched in the Constitution. The purpose of the Law on Alcohol Control is to decrease the general consumption of alcohol, alcohol abuse, its damage on health and economy, to establish legal grounds for vesting the right to produce, sell and import alcohol products specified in this law with subjects of economy. In order to achieve this objective, the legislature provided for state regulation means. The petitioner maintains that economic sanctions provided for subjects of commercial-economic activity should be in compliance with the principles of justice and a state under the rule of law which are entrenched in the Constitution, should be adequate to a violation of law, and should correspond to the sought and universally significant objectives. The petitioner doubts as to whether the uniform economic sanction of ten thousand litas and twenty thousand litas for a repeated violation as provided for in Item 4 of Article 44 of the Law on Alcohol Control are not in conflict with the principles of justice and a state under the rule of law which are entrenched in the Preamble to the Constitution.

3.2. The petitioner maintains that the provision of the Law on Alcohol Control to impose a concrete fine for the committed violation is applied to the subjects of commercial-economic activity which have different turnover and income. A fine of ten thousand or twenty thousand litas can lead to the bankruptcy of certain subjects of economy, while others, which have larger income, can only lose a part of their profit. In the opinion of the petitioner, a state under the rule of law should establish and apply just means not disrupting the business. Thus, the petitioner has doubts whether Item 4 of Article 44 of the Law is not in conflict with Paragraphs 2 and 3 of Article 46 of the Constitution.

III

In the course of the preparation of the case for the Constitutional Court’s hearing written explanations were received from the representatives of the Seimas, a party concerned, who were E. Rumbutis, senior consultant of the Legal Department of the Office of the Seimas, G. Ivoška, chief specialist of the said department, and a representative of the Government, a party concerned, who was V. Grušauskas, the Secretary of the Ministry of Agriculture.

1. E. Rumbutis maintains that the provision of Paragraph 2 of Article 25 of the Constitution that the human being must not be hindered from seeking, obtaining, and imparting information as well as ideas implies that the state, its institutions, officials, natural and legal persons may not restrict this right, nor create artificial obstacles for its implementation. However, Paragraph 3 of Article 25 of the Constitution, which provides that freedom to express convictions, to receive and impart information may not be limited otherwise than by law, if this is necessary to protect the health, honour and dignity, private life, and morals of a human being, or to defend the constitutional order, in fact implies that freedom of information is not absolute and unlimited. Freedom of information may be limited, but only by law and in an attempt to protect the constitutional values specified in Paragraph 3 of Article 25: the right to health, honour and dignity, private life, and to defend the constitutional order.

E. Rumbutis notes that contradictions often arise between rights and freedoms of the person on the one part, and interests of society on the other part. In a democratic society such contradictions are solved by co-ordinating different interests and pursuing not to violate their balance. One of the means of the co-ordination of interests is a limitation on rights and freedoms of the person. A possibility of limiting rights and freedoms of the persons is also provided for in the Convention on Human Rights and Fundamental Freedoms, Paragraph 2 of Article 10 whereof prescribes that the exercise of freedom to hold opinions, to receive and impart information and ideas without interference by public power and regardless of frontiers, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary. Thus, in the opinion of the representative of the party concerned, according to this convention and settled practice of the Constitutional Court, the limitations on rights and freedoms of the person are considered to be grounded if: firstly, they are legitimate, i.e. a possibility of limiting rights and freedoms of the person is provided for by means of laws which have been publicly published, while their norms are formulated sufficiently distinctly; secondly, they are necessary in a democratic society; thirdly, they have to be aimed at the defence of such values as state security, territorial integrity or the protection of society, interests of public order, health or morals of people, etc.

E. Rumbutis pays attention to the fact that the Constitution does not define the extent of limitations on the freedom of information. This means that the choice and establishment of the extent of limitation is undoubtedly within the prerogative of the legislature. Naturally, the above-mentioned criteria of justice and necessity in a democratic society should be taken into account and they must be aimed to defend the said values, in order for such limitations to meet the concept and requirements of justice.

In the opinion of the representative of the party concerned, the legislature, on the grounds of Paragraph 3 of Article 25 of the Constitution, may limit the information concerning alcoholic drinks. Such limitation is determined by the necessity to at least minimally protect consumers, their health, and juveniles. On the other hand, the prohibition on alcohol advertisement provided for in Article 30 of the Law on Alcohol Control does not imply an absolute prohibition on presenting information to consumers concerning alcoholic drinks. E. Rumbutis notes that the limitation on advertisement is only one of the means for decrease of unlimited distribution and consumption of substances hazardous to the health of the human being. Other ways of limitations are provided for in laws. For instance, Paragraph 1 of Article 3 of the Law on Alcohol Control prescribes that the principles of state alcohol control policy shall be: to reduce accessibility of alcoholic beverages through taxation; to limit, by state regulatory means, private profit, obtained from the production of alcoholic drinks, import and trade in alcoholic beverages; to limit the encouragement of realisation and consumption of alcoholic beverages; to increase public informativeness concerning the questions of social and economic harm to health and economy, resulting from alcohol use, etc. In addition, in order to ensure the control over the observance of the provisions of the Law on Alcohol Control, a special system of institutions has been created and liability for violations of the laws has been established.

The representative of the party concerned also maintains that the constitutional principle of a state under the rule of law implies, among other things, clarity of legal norms. In his opinion, the norms of Articles 1 and 30 of the Law on Alcohol Control are clear and, if the said provisions are applied inseparably from each other and if the established judicial practice on this issue is referred to, there should arise no uncertainty. Thus, in the opinion of E. Rumbutis, the issue of constitutionality of the norms of Articles 1 and 30 of the Law on Alcohol Control is the problem of practical application of these norms, but not that of their essence, i.e. their content.

Therefore, in the opinion of the party concerned, there exist no legal grounds to maintain that the provisions of Paragraph 1 of Article 30 and Paragraph 4 of Article 1 of the Law on Alcohol Control are not in conformity with the principle of a state under the rule of law which is established in the Preamble to the Constitution and with Paragraphs 2 and 3 of Article 25 of the Constitution.

2. In his explanations concerning the compliance of the norms of Paragraph 1 of Article 2, Item 2 of Paragraph 1 of Article 3, Article 4 and Article 13 of the Law on Alcohol Control and the impugned norms of Items 7 and 9 of the Rules for Licensing the Production of Alcohol Products as approved by the Government Resolution (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 with Paragraphs 1 and 4 of Article 46 of the Constitution, E. Rumbutis maintains that Paragraph 1 of Article 46 of the Constitution consolidates the basic values upon which the national economy is based: private ownership and individual freedom of economic activity and initiative. However, individual freedom of economic activity is not absolute. While implementing it, interests of society are affected in various aspects, therefore, according to the provisions of Paragraph 3 of Article 46 of the Constitution, the state regulates economic activity so that it serves the general welfare of the Nation. In the opinion of E. Rumbutis, the provision of Article 46 of the Constitution means that it is not permitted to introduce a monopoly, i.e. a subject of economy may not be granted by law any exclusive rights to act in some economic field, however, it does not mean that it is prohibited under certain circumstances to state in the law the existence of a monopoly in a certain sphere of economic activity.

According to E. Rumbutis, the impugned norms of the Law on Alcohol Control were adopted by taking account of the fact that the production of alcohol used to be and is a natural monopoly in Lithuania. He noted, alongside, that the prohibition on conducting certain commercial-economic activity or the licensing of certain commercial-economic activity could not in itself be regarded as an ungrounded restriction on individual freedom of economic activity and initiative. The Seimas, pursuant to the provisions of Paragraphs 3 and 5 of Article 46 of the Constitution, has the right to establish a prohibition on conducting certain economic activity by taking account of objective circumstances: the situation of the national economy, the variety and changes in the economy and social life, economic, social and other interests of the state. In certain spheres, where the competition is not possible and undesirable due to the specificity of the market, because it would violate the interests of consumers, the state may regulate economic activity so that it serves the general welfare of the Nation and defend the interests of consumers. According to E. Rumbutis, monopolisation must be prohibited by the legislature. While prohibiting monopolisation of production and the market, the legislature should take into consideration the situation of the national economy, the variety and changes in the economy and social life.

In the opinion of E. Rumbutis, while adopting the impugned norms of the Law on Alcohol Control, it was stated that there exists a monopoly in the sphere of alcohol production, and special means for the protection of the interests of consumers were established. In his opinion, the norms of the Law on Alcohol Control are in compliance with the provisions of Paragraphs 1 and 4 of Article 46 of the Constitution.

3. The representative of the Government, a party concerned, who was V. Grušauskas, in his written explanations maintains that Article 46 of the Constitution consolidates several constitutional values: individual freedom of economic activity and initiative, freedom of fair competition, general welfare of the Nation and the interests of consumers. All these values are of equal value and none of them may be granted priority. Paragraph 3 of Article 46 of the Constitution provides for the principle of state regulation of the economy and indicates that general welfare of the Nation is the purpose of such regulation. In the opinion of V. Grušauskas, for this purpose the turnover of alcohol and its products, which may be hazardous to the health of human beings, is limited by categorising them as the goods the production and trade whereof is licensed.

According to V. Grušauskas, under Article 46 of the Constitution, the legislature should prohibit monopolisation. Paragraph 4 of Article 46 of the Constitution creates constitutional preconditions for the legislature to state by law the existence of a monopoly by taking account of the situation of the economy, changes in the economy and social life. This has to be said, first of all, about certain spheres of state economy where competition is not desirable because it may violate interests of consumers.

In the opinion of V. Grušauskas, there exists a natural monopoly in the production of strong alcoholic beverages in Lithuania, thus, it is logical that Paragraph 1 of Article 2, Item 2 of Paragraph 1 of Article 3, Articles 4 and 13 of the Law on Alcohol Control, as well as Items 7 and 9 of the Rules for Licensing the Production of Alcohol Products, establish monopolistic norms related solely to the production of strong alcoholic beverages.

4. The representative of the Seimas, a party concerned, G. Ivoška, specifies in his explanations that Article 46 of the Constitution establishes the principles constituting the constitutional basis of the Lithuanian economy, while Paragraph 4 of Article 44 of the Law on Alcohol Control consolidates the legal norm regulating the relationships of liability for violations of the Law on Alcohol Control. G. Ivoška pays attention to the fact that the Constitutional Court, having considered the compliance of the provisions of Item 1 of Paragraph 3 of Article 50 of the Law on Tax Administration with Paragraphs 1, 2 and 3 of Article 46 of the Constitution, held that relationships of legal liability for violations of laws are different if compared with the object of regulation of Article 46 of the Constitution. Thus, in his opinion, Paragraph 4 of Article 44 of the Law on Alcohol Control which establishes liability for violations of the Law on Alcohol Control is not in conflict with Paragraphs 2 and 3 of Article 46 of the Constitution.

The representative of the party concerned notes that Paragraph 4 of Article 44 of the Law on Alcohol Control consolidates sanctions defined in an absolute manner: enterprises, establishments and organisations must pay a fine of ten thousand litas for the first violation of the requirements of Articles 29 and 30 of this law, and a fine of twenty thousand litas for the same repeated violation committed within five years from the imposition of the fine.

In the opinion of G. Ivoška, the legislature consolidated such sanctions by taking account of the necessity to implement the goal established in Article 2 of the Law on Alcohol Control to decrease the general consumption of alcohol, alcohol abuse, the harm it inflicts on health and economy, to establish legal grounds of awarding the right for subjects of economy to produce, sell and import alcohol products established in this law, as well as the necessity to implement the principles of the state alcohol control policy established in Article 3 of the Law. These principles must be observed both by natural and legal persons who realise alcohol products according to the procedure established by law, therefore, the decision of the legislature should not be considered as unlawful.

The representative of the party concerned maintains that the constitutional principles of justice and a state under the rule of law imply that sanctions which are established by the state for violations of law must be proportionate (adequate) for the violation of law, they must be in line with the sought legitimate and generally important objectives, they should not restrict the person evidently more than it is necessary to achieve these objectives. According to Article 48 of the Law on Alcohol Control, the subjects of economy who disagree with the decision of institutions specified in Paragraph 1 of Article 44 of this law concerning the application of economic sanctions have an opportunity to apply to court within one month from the day of the delivery of the decision requesting its annulment or amendment and compensation for damages.

Since the valid Law on Alcohol Control provides for an opportunity to apply to court concerning the changing of the decision of the competent institution, in the opinion of the representative of the party concerned, it should be assumed that the provision of Paragraph 4 of Article 44 of the Law on Alcohol Control that enterprises, establishments and organisations must pay a fine of ten thousand litas for the first violation of the requirements of Articles 29 and 30 of this law, and a fine of twenty thousand litas for the same repeated violation committed within five years from the imposition of the fine is not in conflict with the principles of justice and a state under the rule of law which are entrenched in the Constitution.

IV

In the course of the preparation of the case for the Constitutional Court’s hearing written explanations were received from G. Švedas, Vice-minister of Justice of the Republic of Lithuania, E. Bartkevičius, Secretary of the Ministry of Health of the Republic of Lithuania, A. Mačiulytė, Secretary of the Ministry of Economy of the Republic of Lithuania, R. Stanikūnas, Chairperson of the Competition Board of the Republic of Lithuania, V. Vadapalas, Director General of the European Law Department under the Government of the Republic of Lithuania, Assoc. Prof. Dr. V. Pakalniškis, Head of the Department of Civil and Commercial Law of the Faculty of Law, the Law University of Lithuania, A. Čepas, Director of the Law Institute, U. Trumpa, President of the Lithuanian Free Market Institute, P. Kovas, President of the Radio and Television Association of Lithuania, Assoc. Prof. Dr. B. Pociūtė, President of the Association of Psychologists of Lithuania.

V

At the Constitutional Court’s hearing, the representatives of the Seimas, a party concerned, who were E. Rumbutis and G. Ivoška, virtually reiterated the arguments set forth in their written explanations.

The representative of the Government, a party concerned, who was A. Miliūnas, virtually reiterated the arguments set forth in the written explanation of V. Grušauskas.

The Constitutional Court

holds that:

I

On the compliance of Paragraph 4 (wording of 2 July 1997) of Article 1 and Paragraph 1 (wording of 2 July 1997) of Article 30 of the Law on Alcohol Control with Paragraphs 2 and 3 of Article 25 of the Constitution and the constitutional principle of a state under the rule of law.

1. The petitioner (the 11 January 2002 petition) requests an investigation into whether the provisions of Paragraph 4 of Article 1 and Paragraph 1 of Article 30 of the Law on Alcohol Control are not in conflict with Paragraphs 2 and 3 of Article 25 of the Constitution and the constitutional principle of a state under the rule of law.

It is clear from the petition of the petitioner that he has doubts as to whether Paragraph 4 (wording of 1 July 1997) of Article 1 and Paragraph 1 (wording of 2 July 1997) of Article 30 of the Law on Alcohol Control are not in conflict with the Constitution.

2. Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law on Alcohol Control provides:

Alcohol advertisement implies information published in any form and through any means, by which it is sought to influence consumers’ choices, in connection with the acquisition and consumption of alcohol products, and the commercial, economic and financial activities of enterprises.”

Article 1 has been amended and supplemented more than once, but its Paragraph 4 remained unchanged.

3. Article 30 (wording of 2 July 1997) of the Law on Alcohol Control used to establish:

In the Republic of Lithuania advertisement of all forms of alcohol shall be prohibited, which:

1) is intended for children and teenagers under the age of 18;

2) makes use of persons under the age of 18;

3) makes use of sports figures, physicians, politicians, art and science personages and other prominent public figures, their person, name, image, etc.;

4) links alcohol consumption with the improvement of physical condition;

5) links alcohol consumption with driving;

6) links alcohol consumption with the improvement of mental activity, solution of personal problems;

7) links alcohol consumption with stimulating, sedative and other therapeutic characteristics;

8) links alcohol consumption with social success, increased sexual activity;

9) favourably portrays immoderate consumption of alcoholic beverages or presents negative portrayal of abstinence and moderation;

10) presents higher volumetric concentration of ethyl alcohol as an advantage of alcoholic beverages;

11) presents false and misleading information about alcoholic beverages.

Advertisement of alcohol shall be prohibited:

1) in newspapers and their independent supplements, on the first and last pages (covers) of magazines and books;

2) specialised newspapers, magazines, books, television and radio programmes intended for children and teenagers;

3) over the national radio and television from 15:00 until 22:00, while on weekends and during school holidays, from 8:00 until 22:00 (except for the advertisement of beer and wine, whose ethyl alcohol concentration does not exceed 15 per cent);

4) on broadcasted and rebroadcasted programmes of other radio and television stations, cable radio and cable television stations registered in the Republic of Lithuania except for the broadcasts directly and continuously rebroadcasted from abroad from 15:00 to 20:00 hrs, and on weekends and during school holidays from 8 o’clock to 20:00 hrs (except for the advertisement of beer and wine whose alcohol concentration does not exceed 15 per cent);

5) in the places of concerts, circus, disco performances, other public events, theatre performances, cinema and video film demonstration;

6) at science and educational institutions;

7) at all health care institutions;

8) outside and inside public transport;

9) at petrol stations;

10) on postcards, envelopes, stamps sent by post.

It shall be prohibited to present alcoholic beverages as prizes in lotteries, games and contests to persons under 18 years of age.

A warning text must appear on the outer alcohol advertisements, concerning the harmful effect of alcohol on health. The Ministry of Health shall establish the form, content and place of this text in advertisements.

STACA shall control the limitation on alcohol advertisement, while municipalities shall control outer advertisement.”

Article 30 of the Law has been amended and supplemented more than once, as well as its Paragraph 1.

On 20 June 2002, the Seimas adopted the Republic of Lithuania’s Law on the Amendment of Articles 1, 2, 3, 6, 8, 12, 13, 14, 16, 17, 19, 20, 21, 23, 25, 27, 28, 30, 41, 44, 45, 48, and 52 of the Law on Alcohol Control and the Supplement Thereof with Article 53, by Article 18 whereof amended Article 30 of the Law on Alcohol Control and set if forth in a new wording: Paragraph 1 of Article 30 was supplemented with a new Item 4: “4) uses the names of state institutions, pictures of the buildings of these institutions, etc.”

On 15 May 2003, the Seimas adopted the Republic of Lithuania’s Law on the Supplement of Articles 20, 21 and 25 and the Amendment of Article 30 of the Law on Alcohol Control, by Article 4 whereof recognised Item 4 of Paragraph 1 of Article 30 as no longer valid.

4. Article 25 of the Constitution provides:

The human being shall have the right to have his own convictions and freely express them.

The human being must not be hindered from seeking, obtaining, and imparting information as well as ideas.

Freedom to express convictions, to receive and impart information may not be limited otherwise than by law, if this is necessary to protect the health, honour and dignity, private life, and morals of a human being, or to defend the constitutional order.

Freedom to express convictions and impart information shall be incompatible with criminal actions—the instigation of national, racial, religious, or social hatred, violence and discrimination, slander and disinformation.

The citizen shall have the right to obtain any available information which concerns him from State institutions in the manner established by law.”

5. The constitutional freedom to seek, obtain and impart information and ideas unhindered is one of the fundamentals of an open, just, and harmonious civil society and state under the rule of law. This freedom is an important pre-condition for the implementation of various rights and freedoms of the person which are entrenched in the Constitution, since the person can implement most of his constitutional rights and freedoms in a fully-fledged manner only if he has the right to seek, obtain and impart information unhindered. The Constitution guarantees and safeguards the interest of the public to be informed (the Constitutional Court’s ruling of 23 October 2002).

The freedom to express convictions, to obtain and impart information is one of the fundamental human freedoms. However, this freedom is not absolute. The provisions of Paragraph 2 of Article 25 of the Constitution that the human being must not be hindered from seeking, obtaining, and imparting information as well as ideas may not be construed as permitting using the freedom of information in the manner which would violate the values mentioned in Paragraph 3 of Article 25 of the Constitution: health, honour and dignity, private life, and morals of a human being, or constitutional order.

The Constitutional Court has held in its rulings more than once that, under the Constitution, human rights and freedoms, thus, the right to obtain and impart information may be subject to limitation if the following conditions are observed: this is done by law; the limitations are necessary in a democratic society in order to protect the rights and freedoms of other persons and values entrenched in the Constitution, as well as constitutionally significant objectives; the limitations do not deny the nature and the essence of rights and freedoms; the constitutional principle of proportionality is observed.

It has also to be noted that the Convention for the Protection of Human Rights and Fundamental Freedoms also provides for possibilities of limiting the right to obtain and impart information. Article 10 of this convention provides:

1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public power and regardless of frontiers. This article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises.

2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.”

7. The Constitutional Court has held in its rulings more than once that the constitutional principle of a state under the rule of law implies, along with the other requirements, that human rights and freedoms should be ensured, that natural justice must be respected, that all institutions exercising state power as well as other state institutions must act on the basis of law and in compliance with law, that the Constitution has the supreme legal force and that laws, Government resolutions and other legal acts must be in conformity with the Constitution. The principle of a state under the rule of law which is entrenched in the Constitution is inseparable from the imperative of justice.

Legal certainty and legal clearness are one of the fundamental elements of the principle of a state under the rule of law which is entrenched in the Constitution: legal regulation must be clear and harmonious, legal norms must be formulated precisely, they may not contain ambiguities.

In its 6 December 2000 ruling, the Constitutional Court held that the constitutional principles of justice and a state under the rule of law also presuppose the fact that the measures established by the state for violations of law must be proportionate (adequate) for the violation of law, must be in conformity with legitimate and commonly important objectives, must not restrict the person more than is reasonably necessary to achieve these objectives.

8. It has been mentioned that, according to Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law on Alcohol Control, alcohol advertisement implies information published in any form and through any means, by which it is sought to influence consumers’ choices, in connection with the acquisition and consumption of alcohol products, and the commercial, economic and financial activities of enterprises.

It needs to be noted that, under the Law, advertisement is not any information, but only that by which it is sought to influence consumers’ choices, i.e. to encourage them to purchase or consume certain alcoholic products. It is the encouragement to purchase or consume alcoholic products that indicates the commercial goal of such information: it aims at making positive influence on commercial, economic and financial activity of enterprises. Therefore, neither works of science, nor informational or other publications which present research or statistical data on characteristics, consumption, production and distribution of alcoholic products, nor works of art which reflect the production or consumption of alcoholic products and similar things are not by themselves alcohol advertising. While deciding whether certain information is alcohol advertising, all significant circumstances must be assessed in each particular case.

It needs also to be noted that the definition of alcohol advertising which is presented in Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law by itself implies neither a prohibition on alcohol advertising, nor legal liability for inobservance of such prohibitions. These relationships are regulated in other articles of the Law and other legal acts.

9. In its 13 February 1997 ruling, the Constitutional Court held that advertising is also information because it delivers certain knowledge to its receiver concerning goods, services or other advertised objects (subjects). Advertising is information, but not every information is advertising. Thus, advertising is considered a specific kind of information which is usually called commercial information. Advertising is inseparable from business, marketing, because it in fact serves them and is an important means of competition.

The essential feature of advertising is the striving to influence other persons while they choose or purchase certain products, encourage them to behave in a certain way.

10. The said elements of the content of the notion of advertising in fact coincide with the elements of the content of the notion of advertising which is used in the common language. Dabartinis lietuvių kalbos žodynas (A Dictionary of Contemporary Lithuanian) defines advertising (Lith. reklama) as follows: “1. imparting of news in order to proclaim, attract, interest; 2. advertisement, poster, demonstration, announcement on the radio, television and other means pursuing this goal” (Dabartinis lietuvių kalbos žodynas. Vilnius: Mokslo ir enciklopedijų leidybos inst., 2000, p. 652). According to Tarptautinių žodžių žodynas (A Dictionary of International Words), advertising is “imparting of news, data concerning something in order to make something popular, known, to increase the demand” (Tarptautinių žodžių žodynas. Vilnius: Alma litera, 2001, p. 635.).

11. In international legal acts a similar concept of advertising is consolidated.

Article 2 of the 5 May 1989 European Convention on Transfrontier Television of the Council of Europe presents the following description of the notion of advertisement: “<...> any public announcement intended to promote the sale, purchase or rental of a product or service, to advance a cause or idea or to bring about some other effect desired by the advertiser, for which transmission time has been given to the advertiser for remuneration or similar consideration”.

Paragraph 1 of Article 2 of Directive 84/450/EEC of the Council of European Communities of 10 September 1984 regarding the laws and other legal acts of the Member States concerning the co-ordination of misleading or comparative advertising (including the amendments made by Directive 97/55/EC of the European Parliament and the Council of European Union) defines that “‘advertising’ means the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations”.

Directive 89/552/EEC of the Council of European Communities of 3 October 1989 regarding the co-ordination of the provisions laid down in the laws and other legal acts of the Member States concerning the pursuit of television broadcasting activities (including the amendments made by Directive 97/36/EC of the European Parliament and the Council of European Union of 30 June 1997) provides that “television advertising means any form of announcement broadcast whether in return for payment or for similar consideration or broadcast for self-promotional purposes by a public or private undertaking in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations, in return for payment; ‘surreptitious advertising’ means the representation in words or pictures of goods, services, the name, the trade mark or the activities of a producer of goods or a provider of services in programmes when such representation is intended by the broadcaster to serve advertising and might mislead the public as to its nature. Such representation is considered to be intentional in particular if it is done in return for payment or for similar consideration”.

Item b of Article 2 of Directive 2003/33/EC of the European Parliament and the Council of European Union of 26 May 2003 on the approximation of the laws and other legal acts of the Member States relating to the advertising and sponsorship of tobacco products prescribes that “advertising means any form of commercial communications with the aim or direct or indirect effect of promoting a tobacco product”.

12. Therefore, certain information by the imparting of which it is sought to influence the choice of persons and to encourage the desired behaviour is usually considered advertising both in the common Lithuanian language, and in international legal acts. The definition of alcohol advertisement which is presented in Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law on Alcohol Control in fact does not differ from the general definition of advertising.

13. It has been mentioned that, under the constitutional principle of a state under the rule of law, norms of a law have to be formulated clearly and precisely.

It needs to be noted that the definition of alcohol advertisement which is presented in Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law contains neither contradictions, nor ambiguities; its formulations are sufficiently clear, comprehensible, thus, there exist no grounds to maintain that Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law is in conflict with the constitutional principle of a state under the rule of law.

14. Taking account of the arguments set forth, it should be concluded Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law on Alcohol Control is not in conflict with the constitutional principle of a state under the rule of law.

15. It has been mentioned that Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law presents a definition of alcohol advertisement. This impugned paragraph of Article 1 contains no provisions regarding the prohibition or limitation on alcohol advertising, or regarding legal liability for inobservance of such prohibitions. Thus, the definition of alcohol advertisement in itself cannot be in conflict with Paragraph 2 or 3 of Article 25 of the Constitution.

16. Taking account of the arguments set forth, it should be concluded Paragraph 4 (wording of 2 July 1997) of Article 1 of the Law on Alcohol Control is not in conflict with Paragraphs 2 and 3 of Article 25 of the Constitution.

17. It has been mentioned that Article 30 of the Law on Alcohol Control consolidates limitations on alcohol advertising in Lithuania. Paragraph 1 (wording of 2 July 1997) of Article 30 of the Law used to prescribe that the alcohol advertisement shall be prohibited, which: is intended for children and teenagers under the age of 18; makes use of persons under the age of 18; makes use of sports figures, physicians, politicians, art and science personages and other prominent public figures, their person, name, image, etc.; links alcohol consumption with the improvement of physical condition; links alcohol consumption with driving; links alcohol consumption with the improvement of mental activity, solution of personal problems; links alcohol consumption with stimulating, sedative and other therapeutic characteristics; links alcohol consumption with social success, increased sexual activity; favourably portrays immoderate consumption of alcoholic beverages or presents negative portrayal of abstinence and moderation; presents higher volumetric concentration of ethyl alcohol as an advantage of alcoholic beverages; presents false and misleading information about alcoholic beverages.

18. It needs to be noted that limitations on alcohol advertising are also provided for by international legal acts.

Paragraph 2 of Article 15 of the European Convention on Transfrontier Television provides that advertising and tele-shopping for alcoholic beverages of all varieties shall comply with the following rules: they shall not be addressed particularly to minors; no one associated with the consumption of alcoholic beverage in advertising or tele-shopping should seem to be a minor; they shall not link the consumption of alcohol to physical performance or driving; they shall not claim that alcohol has therapeutic qualities or that it is a stimulant, a sedative or a means of resolving personal problems; they shall not encourage immoderate consumption of alcohol or present abstinence or moderation in a negative light; they shall not place undue emphasis on the alcoholic content of beverages.

Article 15 of said Directive 89/552/EEC of the Council of European Communities of 3 October 1989 regarding the co-ordination of the provisions laid down in the laws and other legal acts of the Member States concerning the pursuit of television broadcasting activities provides that television advertising and teleshop for alcoholic beverages shall comply with the following criteria: it may not be aimed specifically at minors or, in particular, depict minors consuming these beverages; it shall not link the consumption of alcohol to enhanced physical performance or to driving; it shall not create the impression that the consumption of alcohol contributes towards social or sexual success; it shall not claim that alcohol has therapeutic qualities or that it is a stimulant, a sedative or a means of resolving personal conflicts; it shall not encourage immoderate consumption of alcohol or present abstinence or moderation in a negative light; it shall not place emphasis on high alcoholic content (strength) as being a positive quality of the beverages.

19. While deciding whether Paragraph 1 (wording of 2 July 1997) of Article 30 of the Law was not in conflict with the Constitution, it needs to be noted that alcoholic beverages belong to those groups of substances the consumption whereof can cause damage to the health of human beings.

Paragraph 1 of Article 1 of the Law provides that ethyl alcohol is the substance of narcotic effect which may cause addiction and dependence of it.

The consumption of alcohol can have negative consequences on physical, psychological and social state of persons, their groups or even the society.

Consequently, alcohol and its products are specific products, because their consumption can inflict damage on the health of people.

20. Under Paragraph 1 of Article 53 of the Constitution, the state shall look after the health of the people and shall guarantee medical aid and services for the human being in the event of sickness. Thus, looking after the health of the people should be interpreted as a state function (the Constitutional Court’s ruling of 14 January 2002). It follows from the provision of Paragraph 1 of Article 53 of the Constitution that the state shall look after the health of the people, that the protection of the health of the people is the constitutionally significant goal, the public interest (the Constitutional Court’s ruling of 14 March 2002).

It has been mentioned that Paragraph 3 of Article 25 of the Constitution provides that freedom to express convictions, to receive and impart information may not be limited otherwise than by law, if this is necessary to protect, inter alia, the health of a human being. Thus, the legislature, while seeking to defend this constitutional value—the health of the people—has the right to limit alcohol advertising.

It has been mentioned that, under the Constitution, human rights and freedoms, as well as the right to obtain and impart information, may be subject to limitation if the following conditions are observed: this is done by law; the limitations are necessary in a democratic society in order to protect the rights and freedoms of other persons and values entrenched in the Constitution, as well as constitutionally significant objectives; the limitations do not deny the nature and the essence of the rights and freedoms; constitutional principle of proportionality is observed.

21. While deciding whether Paragraph 1 (wording of 2 July 1997) of Article 30 of the Law on Alcohol Control was not in conflict with the Constitution, it has to be emphasised that the said limitations on alcohol advertising were established by law; that the said limitations pursued to defend another constitutional value—to protect the health of a human being; that the limitations on advertising were adequate to the objective sought, i.e. they did not violate the requirements of proportionality; that the established limitations were of a partial character, therefore, they should not be evaluated as the denial of the right to information.

22. Taking account of the arguments set forth, it should be concluded Paragraph 1 (wording of 2 July 1997) of Article 30 of the Law on Alcohol Control was not in conflict with Paragraphs 2 and 3 of Article 25 of the Constitution and the constitutional principle of a state under the rule of law.

II

On the compliance of Paragraph 4 (wording of 20 June 2002) of Article 44 of the Law on Alcohol Control with Paragraphs 2 and 3 of Article 46 of the Constitution and the constitutional principles of justice and a state under the rule of law.

1. The petitioner (petition of 29 May 2003) requests an investigation into whether the provision of Paragraph 4 of Article 44 of the Law on Alcohol Control that enterprises, establishments and organisations, which violate the requirements of Articles 29 and 30 of this Law for the first time, shall pay a fine of ten thousand litas, and for the same repeated violation, committed within a period of five years from the imposition of the penalty, a fine of twenty hundred thousand litas are not in conflict with Paragraphs 2 and 3 of Article 46 of the Constitution and the principles of justice and a state under the rule of law which are entrenched in the Constitution.

It is clear from the petition of the petitioner that it requests an investigation into whether Paragraph 4 (wording of 20 June 2002) of Article 44 of the Law on Alcohol Control is not in conflict with Paragraphs 2 and 3 of Article 46 of the Constitution and the constitutional principles of justice and a state under the rule of law.

2. Paragraph 4 (wording of 20 June 2002) of Article 44 of the Law on Alcohol Control provides:

Enterprises, establishments and organisations, which violate the requirements of Articles 29 and 30 of this Law for the first time, shall pay a fine of ten thousand litas, and for the same repeated violation, committed within a period of five years from the imposition of the penalty, a fine of twenty hundred thousand litas.”

3. Article 29 (wording of 16 March 2000) of the Law on Alcohol Control used to provide:

Enterprises which have the right to sell alcoholic beverages shall be prohibited from applying the following means of sales promotion:

1) to release a certain portion of goods without payment or as a bonus;

2) to apply discounts of the fixed amount to the holders of coupons published in the mass media;

3) to organise free distribution of samples of new alcoholic beverages;

4) to supply their products as prizes or as added incentive to a prize, lotteries, competitions or games, except for the beer and sparkling wines the volumetric concentration of the ethyl alcohol whereof does not exceed 15 per cent;

5) to organise competitions of retailers for the promotion of alcoholic beverages;

6) to sell special advertisement editions, published in the Republic of Lithuania or foreign countries, brought into the Republic of Lithuania and designed to promote the sale of alcohol products.

The Government of the Republic of Lithuania may also establish other limitations on alcoholic beverage sales promotion for the enterprises which have licences to sell alcoholic beverages issued in accordance with the established procedure.”

4. Article 30 (wording of 20 June 2002) of the Law used to provide:

In the Republic of Lithuania advertising of all forms of alcohol shall be prohibited which:

1) is intended for children and teenagers under the age of 18;

2) makes use of persons under the age of 18;

3) makes use of sports figures, physicians, politicians, art and science celebrities or other prominent public figures, their person, name, image, etc.;

4) uses the names of State institutions, pictures of the buildings of these institutions, etc.;

5) relates alcohol consumption with the improvement of physical condition;

6) relates alcohol consumption with driving;

7) relates alcohol consumption with the improvement of mental activity, solving of personal problems;

8) relates alcohol consumption with stimulating, sedating and other therapeutic characteristics;

9) relates alcohol consumption with social success, increased sexual activity;

10) favourably portrays immoderate use of alcoholic beverages or presents a negative portrayal of abstinence and moderation;

11) presents a higher volumetric concentration of ethyl alcohol as an advantage of alcoholic beverages;

12) presents false and misleading information about alcoholic beverages.

Advertising of alcohol shall be prohibited:

1) in newspapers and their independent supplements, on the first and last pages (covers) of magazines and books;

2) specialised newspapers, magazines, books, television and radio programmes intended for children and teenagers;

3) broadcasted and rebroadcasted programmes of radio and television stations, cable radio and cable television stations registered in the Republic of Lithuania except for the broadcasts directly and continuously rebroadcasted from abroad from 15:00 to 22:30 hours, while on weekends and during school holidays––from 08.00 to 22:30 hours (except for the advertisements of alcoholic beverages the volumetric concentration of ethyl alcohol whereof does not exceed 22 per cent);

4) at the places of concerts, circus and disco performances, places of other public events, theatre performances, and cinema and video film shows;

5) at science and educational institutions;

6) at all health care institutions;

7) outside and inside public transport means;

8) at petrol stations and the areas thereof;

9) on postcards, envelopes and stamps sent by post.

It shall be prohibited to present alcoholic beverages as lottery, game and contest prizes to persons under 18 years of age.

Outdoor advertising of alcohol shall be prohibited in the Republic of Lithuania except for the outdoor advertisement of wine of natural fermentation and cider.

Information on alcoholic beverages which appears in shopping areas, information bulletins which are intended only for those specialising in alcohol trade and also the registered names of the enterprises producing and trading in alcoholic beverages (if the name of the producer of alcoholic beverages is an integral part of the registered name of these enterprises) and the goods marks, when these names and goods marks appear on signs hanging on the buildings or branches and the special transport of the enterprises shall not be regarded as advertising.

In accordance with the procedure established by the Government of the Republic of Lithuania or an institution authorised by it, only the following information may be presented in trade places of alcoholic beverages:

1) the name, address, goods mark, type of trade (wholesale or retail) of the producer and trade enterprise;

2) names and groups of the alcoholic beverages;

3) the word ‘we trade in’ or ‘we sell’;

4) ethyl alcohol content volumetric concentration;

5) prices of the alcoholic beverages;

6) what the beverage is made of (fruit, grapes, grain etc.);

7) special indications regarding the consumption;

8) information regarding the harm inflicted on the health due to the consumption of alcohol.

Adherence to the requirements of this Article shall be controlled by STACS (except for violations in public information media), municipal institutions and STACS (violations in outer advertising) and the National Council for Consumers’ Rights Protection (violations in public information media).”

5. Paragraphs 2 and 3 of Article 46 of the Constitution provide:

The State shall support economic efforts and initiatives that are useful to the society.

The State shall regulate economic activity so that it serves the general welfare of the Nation.”

6. It has been mentioned that the constitutional principles of justice and a state under the rule of law also imply that that sanctions which are established by the state for violations of law must be proportionate (adequate) for the violation of law, they must be in line with the sought legitimate and generally important objectives, they should not restrict the person evidently more than it is necessary to achieve these objectives.

It has to be noted in the context of the case at issue that the constitutional principle of justice demands to differentiate the established penalties so that the nature of the violation of law, circumstances extenuating and aggravating the liability could be taken into account, that, while taking account of that, a milder punishment could be imposed than the minimum one provided for in the sanction, etc.

While establishing the sizes of sanctions for violations of laws, the legislature is bound by the constitutional principles of justice and a state under the rule of law, and other constitutional requirements. The Constitutional Court has emphasised that the constitutional principles of justice and a state under the rule of law also mean that there must be a fair balance (proportion) between the objective sought and means to attain this objective, between violations of law and penalties established for these violations. These principles do not permit the establishment of such penalties for violations of law, as well as such sizes of the fines, which would evidently be disproportionate (inadequate) to the violation of law and the objective sought (the Constitutional Court’s rulings of 6 December 2000 and 2 October 2001). Thus, according to the constitutional principles of justice and a state under the rule of law, penalties established for violations of the laws must be of such size which is necessary for the sought legitimate and generally important objective––to ensure the observance of the laws, the fulfilment of the established duties.

7. While deciding whether Paragraph 4 (wording of 20 June 2002) of Article 44 of the Law on Alcohol Control is not in conflict with the constitutional principles of justice and a state under the rule of law, account should be taken of the fact that, under Paragraph 1 of Article 53 of the Constitution “the State shall look after the health of the people”, while under Paragraph 3 of Article 25 of the Constitution, freedom to express convictions, to receive and impart information may not be limited otherwise than by law, if this is necessary to protect, inter alia, the health of a human being. Being obligated to look after the health of people, the legislature is empowered to establish the particularities of the production and realisation of alcohol and its products, to limit their advertising, as well as to establish legal liability for violations of such limitations and the established procedure. However, this does not mean that the legislature may establish penalties of any kind, as well as fines of any size for violations of the laws which regulate the procedure of production and realisation or advertising of alcoholic beverages. While establishing the liability for violations of the limitation on the promotion of the trade of alcoholic beverages and the limitation on alcohol advertising, the legislature is bound by the constitutional principles of justice and a state under the rule of law and other constitutional requirements.

It has been mentioned that the constitutional principles of justice and a state under the rule of law also mean that there must be a fair balance (proportion) between violations of law and penalties established for these violations. In addition, the legislature, while establishing such a sanction for a violation of the law, alongside must legislatively establish such legal regulation according to which a court or another institution, while imposing a penalty for the violation of the law, must have an opportunity to take account of all circumstances of the case and impose a milder punishment than that provided for by law.

While deciding whether Paragraph 4 (wording of 20 June 2002) of Article 44 of the Law on Alcohol Control which consolidates strictly determined (absolute) sizes of fines, is not in conflict with the constitutional principles of justice and a state under the rule of law, the fact that without establishing differentiated sizes of fines in the law, but establishing strictly determined (absolute) size of the fine, there remains no opportunity to individualise the size of the imposed fine by taking into consideration the nature of a violation and other circumstances.

Such legal regulation is inconsistent with the principles of justice and a state under the rule of law which are entrenched in the Constitution.

8. Taking account of the arguments set forth, it should be concluded Paragraph 4 (wording of 20 June 2002) of Article 44 of the Law on Alcohol Control to the extent that it does not provide for the imposition of a fine by taking account of the nature of a violation of the law and other circumstances is in conflict with the constitutional principles of justice and a state under the rule of law.

9. The Constitutional Court, having stated that Paragraph 4 (wording of 20 June 2002) of Article 44 of the Law on Alcohol Control to the extent that it does not provide for the imposition of a fine by taking account of the nature of a violation of the law and other circumstances is in conflict with the constitutional principles of justice and a state under the rule of law, will not consider whether the impugned Paragraph 4 (wording of 20 June 2002) of Article 44 of the Law is not in conflict with Paragraphs 2 and 3 of Article 46 of the Constitution.

III

On the compliance of Paragraph 1 (wording of 18 April 1995) of Article 2, Item 2 (wording of 18 April 1995) of Paragraph 1 of Article 3, Paragraph 2 (wording of 10 December 1998) of Article 4 and Article 13 (wording of 18 July 2000) of the Law on Alcohol Control and that of Items 7 and 9 (wording of 22 January 2001) of the Rules for Licensing the Production of Alcohol Products as approved by the Government Resolution (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 with Paragraphs 1 and 4 of Article 46 of the Constitution.

1. The petitioner (petition of 1 February 2002) requests an investigation into whether the norms of Paragraph 1 of Article 2, Item 2 of Paragraph 1 of Article 3, Paragraph 2 of Article 4 and Article 13 of the Law on Alcohol Control and whether the norms of Items 7 and 9 of the Rules for Licensing the Production of Alcohol Products as approved by the Government Resolution (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 are not in conflict with Paragraphs 1 and 4 of Article 46 of the Constitution.

It is clear from the petition of the petitioner that he has doubts as to whether the provision “the objective of the Law on Alcohol Control shall be <...> to establish legal grounds for the introduction of state monopoly on the production of alcohol products <...> and the granting of the right of state monopoly to produce <...> alcohol products specified in this Law to economic subjects” of Paragraph 1 (wording of 18 April 1995) of Article 2 of the Law, Item 2 (wording of 18 April 1995) of Paragraph 1 of Article 3, Paragraph 2 (wording of 10 December 1998) of Article 4 and Article 13 (wording of 18 July 2000) of the Law, as well as Items 7 and 9 (wording of 22 January 2001) of the Rules are not in conflict with Paragraphs 1 and 4 of Article 46 of the Constitution.

The provisions of the Law and the Rules which are impugned by the petitioner were amended and supplemented more than once. At the present time all of them are no longer valid.

In this case the Constitutional Court, subsequent to the petition of the petitioner, will only investigate the compliance of the impugned provision “the objective of the Law on Alcohol Control shall be <...> to establish legal grounds for the introduction of state monopoly on the production of alcohol products <...> and the granting of the right of state monopoly to produce <...> alcohol products specified in this Law to economic subjects” of Paragraph 1 (wording of 18 April 1995) of Article 2 of the Law, Item 2 (wording of 18 April 1995) of Paragraph 1 of Article 3, Paragraph 2 (wording of 10 December 1998) of Article 4 and Article 13 (wording of 18 July 2000) of the Law, as well as the compliance of the impugned Items 7 and 9 (wording of 22 January 2001) of the Rules with the Constitution.

2. Article 46 of the Constitution provides:

Lithuania’s economy shall be based on the right of private ownership and individual freedom of economic activity and initiative.

The State shall support economic efforts and initiatives that are useful to the society.

The State shall regulate economic activity so that it serves the general welfare of the Nation.

The law shall prohibit monopolisation of production and the market and shall protect freedom of fair competition.

The State shall defend the interests of the consumer.”

3. In its ruling of 23 February 2002, the Constitutional Court held that the legal norms set down in Article 46 of the Constitution are interrelated, therefore when a legal norm which is in a certain part of Article 46 of the Constitution is violated, the legal norms laid down in the other parts of this article are violated or pre-conditions are created for their violation.

3.1. The notion of individual economic activity is a broad one. It includes the freedom to freely choose business, freedom to freely conclude contracts, freedom of fair competition, equal rights of subjects of economic activity etc. The freedom of individual economic activity and initiative is the whole complex of legal opportunities which creates preconditions for an individual independently to adopt decisions necessary for his economic activity (the Constitutional Court’s rulings of 18 April 1996 and 14 March 2002).

The freedom of individual economic activity creates opportunities to realise various aspirations of persons. Under the Constitution, the national economy shall be based on the freedom of individual economic activity and initiative, therefore one may not establish any such legal regulation creating inappropriate conditions for the implementation of the freedom of economic activity (the Constitutional Court’s ruling of 14 March 2002).

According to the Constitution, the freedom of individual economic activity is not absolute. The state regulates economic activity by co-ordinating the interests of the person and society. While regulating economic activity by legal acts, state institutions are bound by the Constitution.

In its ruling of 6 October 1999, the Constitutional Court held that the provision of the Constitution “the State shall regulate economic activity so that it serves the general welfare of the Nation” consolidates the constitutional principle which outlines the directions, ways and boundaries of the regulation of economic activity. The general welfare of the Nation may be judged taking account of the social development of the Nation, opportunities for self-expression of a human being. The content of the notion “the general welfare of the Nation” is disclosed in each concrete case by taking account of economic, social and other significant factors.

3.2. Paragraph 5 of Article 46 of the Constitution establishes the duty of the State to defend the interests of consumers. This constitutional provision implies that various means for the defence of consumers’ interests must be established by legal norms, that state institutions must control how subjects of economy observe the established requirements, etc. (the Constitutional Court’s ruling of 18 October 2000).

3.3. The Constitutional Court, while construing the provision of Paragraph 4 of Article 46 of the Constitution that “the law shall protect freedom of fair competition”, noted that this also means the obligation of the legislature to establish by law such a legal regulation, according to which production and the market would not be monopolised, that the freedom of fair competition would be ensured, and that means for its protection would be provided for (the Constitutional Court’s ruling of 17 March 2003).

The constitutional guarantee of the protection of fair competition means, inter alia, the prohibition for state and municipal institutions which regulate economic activity against adopting decisions which distort or can distort fair competition.

3.4. The provision of Paragraph 4 of Article 46 of the Constitution “the law shall prohibit monopolisation of production and the market” means that a monopoly may not be introduced, i.e. it is not permitted to grant exceptional rights to an economy subject to conduct activity in some economic sphere due to which this sphere would be monopolised. However, the prohibition on monopolising the production does not mean that it is prohibited, under certain circumstances, to establish in the law the presence of monopoly in a certain sphere of economic activity or to reflect factual monopoly relationships by other ways and to regulate them respectively. This statement creates legal preconditions to apply respective requirements to the monopolist while defending the rights and legitimate interests of other subjects of economy and consumers (the Constitutional Court’s rulings of 6 October 1999, 18 October 2000, 9 April 2002, and 17 March 2003).

According to the Constitution, the introduction of a monopoly should be regarded as ungrounded granting of privileges to a certain subject of economy and, alongside, as discrimination of other subjects of economy and limitation on their freedom of economic activity.

3.5. The provision of Paragraph 4 of Article 46 of the Constitution that the law shall prohibit monopolisation of production and the market should be assessed within the context of other provisions of the Constitution, namely, in the context of Article 29 of the Constitution, which consolidates the principle of the equality of persons.

Paragraph 1 of Article 29 of the Constitution consolidates the formal equality of all persons, and Paragraph 2 of this article––the principle of non-discrimination and not granting of privileges. In its rulings of 28 February 1996 and 17 November 2003, the Constitutional Court held that the constitutional principle of the equality of persons should be applied not only to natural, but also to legal persons.

Granting privileges to a certain group of subjects of economy should be also related with discrimination of other subjects of economy and limitation on their freedom of economic activity and initiative. This is incompatible with the requirements of Articles 29 and 46 of the Constitution.

4. It has been mentioned that, according to the Constitution, freedom of individual economic activity is not absolute; that the state regulates economic activity by co-ordinating the interests of the person and society; that while regulating economic activity by legal acts, state institutions are bound by the Constitution.

In its ruling of 9 July 1998, the Constitutional Court noted that the production, import, trade or other realisation of alcohol need special regime of state regulation. However, economic activity must be regulated so that production and the market would not be monopolised, that fair competition and the freedom of economic activity would be protected.

According to the Constitution, rights and freedoms, as well as the freedom of economic activity may be subject to limitation if the following conditions are observed: this is done by law; the limitations are necessary in a democratic society in order to protect the rights and freedoms of other persons and values entrenched in the Constitution, as well as constitutionally significant objectives; the limitations do not deny the nature and the essence of the rights and freedoms; the constitutional principle of proportionality is observed.

It needs to be noted that the state and its institutions, having the discretion to establish a special legal regulation of alcohol production and the market, may not do so by choosing means so inadequate to the objectives sought, by which they would introduce the monopoly of production and the market of these products, would groundlessly restrict the freedom of economic activity and fair competition.

It needs to be noted in the context of the case at issue that other various other means but the introduction of a monopoly may be established while seeking to attain socially significant objectives.

5. Paragraph 1 (wording of 18 April 1995) of Article 2 of the Law on Alcohol Control used to establish:

The objective of the Law on Alcohol Control shall be to decrease the general consumption of alcohol, alcohol abuse, its damage to the health and economy, to establish legal grounds for the introduction of state monopoly on the production and trade of alcohol products, and the granting of the right of state monopoly to produce, sell and import alcohol products specified in this Law to economic subjects”.

It has been mentioned that the petitioner doubts whether the provision “the objective of the Law on Alcohol Control shall be <...> to establish legal grounds for the introduction of state monopoly on the production of alcohol products <...> and the granting of the right of state monopoly to produce <...> alcohol products specified in this Law to economic subjects” of Paragraph 1 (wording of 18 April 1995) of Article 2 of the Law is not in conflict with Paragraphs 1 and 4 of Article 46 of the Constitution.

6. Item 2 (wording of 18 April 1995) of Paragraph 1 of Article 3 of the Law used to establish:

The principles of the state politics concerning alcohol control shall be: <…> (2) to limit by state regulation means private profit obtained from the production, import of alcoholic beverages and the trade of alcoholic beverages;”.

7. Article 4 (wording of 10 December 1998) of the Law used to establish:

Alcohol products are classed as special products, the production, import, trade and consumption whereof, in accordance with this and other laws and legal acts, shall be applied a special state regulation regime.

The Government of the Republic of Lithuania, following Paragraph 1 of Article 4 of the Law on Trade, under extraordinary circumstances, may introduce the state monopoly of the wholesale and retail trade of alcoholic beverages. The bases and conditions for introduction of the monopoly, the procedure of its implementation are established by means of laws and resolutions of the Government of the Republic of Lithuania.

The Government of the Republic of Lithuania, taking account of monitoring results of alcohol consumption and the economic harm inflicted by it upon health and the economy, may establish, upon the proposal of the Ministry of Health Protection, the quotas on the production and import of the groups of alcoholic beverages.”

It has been mentioned that the petitioner doubts as to the compliance with the Constitution not of whole Article 4 (wording of 10 December 1998) of the Law, but only of its Paragraph 2 which establishes the right of the Government to introduce, under extraordinary circumstances, the state monopoly of the wholesale and retail trade of alcoholic beverages.

8. Article 13 (wording of 18 July 2000) used to establish:

The right to produce non-methylated ethyl alcohol, methylated ethyl alcohol and alcoholic beverages which exceed 22 per cent of ethyl alcohol by volume shall be granted only to state enterprises and special purpose companies according to the procedure established by this law and other legal acts. This requirement shall not be applied to the enterprises specified in Paragraphs 2 and 3 of this article.

According to the procedure established by this law and other legal acts, the close stock company ‘Lietuviškas midus’ shall be granted the right to produce alcoholic beverages which are produced on the basis of products produced in the process of fermentation of natural bee honey.

According to the procedure established by this law and other legal acts, the company ‘Sema’ shall be granted the right to produce non-methylated ethyl alcohol as a supplementary product of basic yeast production, and methylated ethyl alcohol.

According to the procedure established by this law and other legal acts, enterprises of other types shall be granted the right to produce other alcoholic products including alcoholic beverages which do not exceed 22 per cent of ethyl alcohol by volume.

The conditions and procedure of introduction of state monopoly for the production of alcohol products shall be established by means of laws and resolutions of the Government of the Republic of Lithuania.”

9. The provisions impugned by the petitioner are interrelated. It is clear from them that the state monopoly for the production of alcohol products, as well as the right to produce certain alcohol products to subjects of economy specified only by law, was consolidated.

This legal regulation ignored the requirements of Paragraph 1 of Article 46 of the Constitution which prescribes that “Lithuania’s economy shall be based on the right of private ownership and individual freedom of economic activity and initiative”, as well as those of Paragraph 4 of this article, providing that “the law shall prohibit monopolisation of production and the market and shall protect freedom of fair competition”. Alongside, it needs to be noted that the legal regulation which had established the monopoly meant the granting of privileges to certain subjects of economy, as well as discrimination of other subjects of economy and a restriction on their freedom of economic activity, and due to this the requirements of Article 29 of the Constitution had been disregarded.

10. Taking account of the arguments set forth, it should be concluded the provision “the objective of the Law on Alcohol Control shall be <...> to establish legal grounds for the introduction of state monopoly on the production of alcohol products <...> and the granting of the right of state monopoly to produce <...> alcohol products specified in this Law to economic subjects” of Paragraph 1 (wording of 18 April 1995) of Article 2 of the Law, Item 2 (wording of 18 April 1995) of Paragraph 1 of Article 3, Paragraph 2 (wording of 10 December 1998) of Article 4 and Article 13 (wording of 18 July 2000) of the Law were in conflict with Article 29 and Paragraphs 1 and 4 of Article 46 of the Constitution.

11. On 22 January 2001, the Government adopted the Resolution (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” whereby it approved the Rules for Licensing the Production of Alcohol Products. It has been mentioned that the petitioner requests an investigation into whether Items 7 and 9 (wording of 22 January 2001) of the Rules are not in conflict with Paragraphs 1 and 4 of Article 46 of the Constitution.

11.1. Item 7 (wording of 22 January 2001) used to establish:

The licence established in Item 2.3 of these rules shall be issued only to state enterprises and special purpose companies.”

Item 2.3 (wording of 22 January 2001) used to establish the following types of licences for production of alcohol products:

alcohol products which do not exceed 22 per cent of ethyl alcohol by volume, alcoholic beverages, non-methylated and methylated ethyl alcohol (codes according to the Combined Nomenclature of Goods––2103.90.90.3, 2106.90.20, 22.06, 22.07, 22.08, 3302.10.10, 3302.10.40.2, 3302.10.40.3, 3302.10.90.2, 3302.10.90.3, 3302.90.10)”.

11.2. Item 9 (wording of 22 January 2001) of the Rules used to establish:

The licence of the type established in Item 2.5 of these Rules shall be issued to the closed stock company ‘Lietuviškas midus’ which is granted the right to produce alcoholic beverages which are produced on the basis of products produced in the process of fermentation of natural bee honey.”

Item 2.5 (wording of 22 January 2001) of the Rules used to establish the following types of licences for the production of alcohol products:

alcohol products, including alcoholic beverages which do not exceed 22 per cent of ethyl alcohol by volume, alcoholic beverages which are produced on the basis of products produced in the process of fermentation of natural bee honey (codes according to the Combined Nomenclature of Goods––2103.90.90.3, 2106.90.20, 22.04, 22.05, 22.06, 2207.20, 2208.70, 2208.90, 3302.10.10, 3302.10.40.2, 3302.10.40.3, 3302.10.90.2, 3302.10.90.3, 3302.90.10).”

12. Thus, the legal regulation established in Items 7 and 9 (wording of 22 January 2001) of the Rules, used to establish exceptional rights to state enterprises, special purpose companies and the closed stock company “Lietuviškas midus” to produce certain alcohol products.

It has been mentioned that consolidation of privileges to a certain group of subjects of economy in the legal regulation, discrimination of other subjects of economy, and a restriction on their freedom of economic activity would violate the requirements of Article 29 and Paragraphs 1 and 4 of Article 46 of the Constitution.

13. Taking account of the arguments set forth, it should be concluded Items 7 and 9 (wording of 22 January 2001) of the Rules for Licensing the Production of Alcohol Products as approved by the Government Resolution (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 were in conflict with Article 29 and Paragraphs 1 and 4 of Article 46 of the Constitution.

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1, 53, 54, 55 and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

1. To recognise that Paragraph 4 (wording of 2 July 1997) of Article 1 of the Republic of Lithuania’s Law on Alcohol Control is not in conflict with the Constitution of the Republic of Lithuania.

2. To recognise that Paragraph 1 (wording of 2 July 1997) of Article 30 of the Republic of Lithuania’s Law on Alcohol Control was not in conflict with the Constitution of the Republic of Lithuania.

3. To recognise that Paragraph 4 (wording of 20 June 2002) of Article 44 of the Republic of Lithuania’s Law on Alcohol Control to the extent that it does not provide for the imposition of a fine by taking account of the nature of a violation of the law and other circumstances is in conflict with the constitutional principles of justice and a state under the rule of law.

4. To recognise that the provision “the objective of the Republic of Lithuania’s Law on Alcohol Control shall be <...> to establish legal grounds for the introduction of state monopoly on the production of alcohol products <...> and the granting of the right of state monopoly to produce <...> alcohol products specified in this Law to economic subjects” of Paragraph 1 (wording of 18 April 1995) of Article 2, Item 2 (wording of 18 April 1995) of Paragraph 1 of Article 3, Paragraph 2 (wording of 10 December 1998) of Article 4 and Article 13 (wording of 18 July 2000) of the Republic of Lithuania’s Law on Alcohol Control were in conflict with Article 29 and Paragraphs 1 and 4 of Article 46 of the Constitution of the Republic of Lithuania.

5. To recognise that Items 7 and 9 (wording of 22 January 2001) of the Rules for Licensing the Production of Alcohol Products as approved by the Resolution of the Government of the Republic of Lithuania (No. 67) “On the Approval of the Rules for Licensing the Production of Alcohol Products” of 22 January 2001 were in conflict with Article 29 and Paragraphs 1 and 4 of Article 46 of the Constitution of the Republic of Lithuania.

This ruling of the Constitutional Court is final and not subject to appeal.

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court:                                                  Armanas Abramavičius

Egidijus Jarašiūnas

Egidijus Kūris

Kęstutis Lapinskas

Zenonas Namavičius

Augustinas Normantas

Jonas Prapiestis

Vytautas Sinkevičius

Stasys Stačiokas