EUR-Lex - 31976D0684 - EN

Furthermore, the circular did indeed have an effect. The complainant and similar firms were unable to enter into new contracts to secure regular supplies, although it is clear from BNIA's own statistics that substantial quantities of grade 5 Armagnac were available. Even if the complainant did not formally seek an exemption on the terms the circular announced - without specifying the conditions thereof - this does not detract from the circular's restrictive effect because, and this is not disputed, there was in fact little likelihood of obtaining an exemption. Indeed it is a fact that no exemptions were granted for deliveries to Germany. Only those quantities which had already been contracted for could be supplied. Finally, the fact that, even after the prohibition was revoked, the complainant bought only grade 1 Armagnac is explained on the ground that he was obliged to change his arrangements for supply in the light of the new market situation. This does not reduce the restrictive effect which the measure in question had while it was in force.

BNIA's assertion that the measure in question was justified by the aim of improving the regulation of quality and of ensuring that Armagnac was no longer supplied under false designations cannot be accepted. It is clear that any fraudulent dealings in respect of the quality of a product can be adequately dealt with by application to administrative authorities or through the courts, and proceedings of this nature have in fact been instituted. The measure in question went so far beyond what was necessary for the attainment of these two objectives that its deleterious effects on competition and trade between Member States cannot be considered to have been unforeseeable or involuntary.

Firstly, it did not apply to old contracts or to deliveries of less than 10 hl. By virtues of these exceptions, large quantities of grade 5 Armagnac were supplied, the specified quality apparently being correct since the BNIA required the submission of samples and the production of analyses. The BNIA was thereby achieving the control of quality even in respect of those deliveries to which the measure in question did not apply. It is therefore difficult to see why the conclusion of new agreements for the supply of grade 4 and 5 Armagnac was prohibited.

Secondly, the formalities concerning the production of a dispatch note were rendered generally more stringent by the BNIA circular 16/74 dated 9 December 1974. This confirms the impression that the obligation to suspend deliveries was far in excess of what was required for the purpose of adequately controlling quality.

Consequently, it was not necessary to take the measure impugned in order to improve quality control and to prevent false designations of quality. The aim of this measure, for purely commercial reasons was artificially to reduce the supply on the market. Such a reduction inevitably has the effect of distorting competition.

1. The prohibition on deliveries particularly affected exports to other Member States of bulk Armagnac of grades 4 and 5 with the consequent effect that, apart from a number of small deliveries of quantities of less than 10 hl, no new export agreements could be concluded. The prohibition on deliveries was therefore likely directly to affect trade between Member States.

1. The restrictive measure complained of has affected trade between Member States and competition to a considerable extent. The volume of stocks available at the time demonstrates that, in the absence of the measure, French exporters could have entered into new agreements for bulk deliveries of grade 5 Armagnac, exports of which to other Member States, particularly Germany, represent a major proportion of total sales.

1. Council Regulation No 26(1), which provides for certain exceptions to the rules of competition with respect to agricultural products, is not applicable in this case since Armagnac, being an industrial product, is not among the agricultural products listed in Annex II to the Treaty.

III

Under Article 85 (3), the provisions of Article 85 (1) may be declared inapplicable in the case of any agreement or decision which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives or afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

The measure in question was not notified to the Commission. It is an agreement of the kind referred to in Article 4 (1) of Regulation No 17 and, until it has been notified, no decision in application of Article 85 (3) may be taken.

In any event, the Commission is unable to conclude that a prohibition on deliveries was indispensable to the attainment of the objectives of the control of quality by the BNIA.

IV

Under Article 90 (2), undertakings entrusted with the operation of services of general economic interest are subject to the rules on competition contained in the Treaty in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Community.

Even if the Commission accepted that the BNIA was an undertaking which, in respect of the control of quality, was entrusted by decree 62/20 with the operation of services of general economic interest, the prohibition in question would still constitute a quantitative restriction on trade between Member States which was not necessary to the performance of the BNIA's duties and effected the development of trade within the Community to an extent contrary to the interests of the Community. To ensure that measures of this kind are not introduced in the future, a Decision is adopted under Article 3 of Regulation No 17 that the offending measure infringed Article 85 (1), (1)OJ No 30, 20.4.1962, p. 993/62.

HAS ADOPTED THIS DECISION: