EUR-Lex - 31978D0066 - EN

Article 85 (1) of the EEC Treaty prohibits as incompatible with the common market all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market.

The agreements and decisions concerning the organization and operation of vegetable auction sales at Saint-Pol-de-Léon and Saint-Méloir-des-Ondes, which are agreements between undertakings or decisions by associations of undertakings as the case may be for the purpose of Article 85 of the Treaty, impose on the parties thereto obligations and rules, some of which restrict competition. 1. The agreements between the producers' organizations participating in the Saint-Pol-de-Léon and Saint-Méloir-des-Ondes auctions and the dealers which obtain supplies there require those dealers to make all their purchases at those auctions. In practice, although this obligation is imposed by the agreements, the producers' organizations do not prevent dealers from purchasing from the other auction centres or in other regional markets. At present such purchases in other regions or at other auction centres are small. However, it is quite possible that if such purchases became more common, for example because access to other markets became freer, the exclusivity obligations could be enforced by those in charge of the auction sales. In any event the fact that this obligation is an integral part of the agreements entered into by the dealers and the producers' organizations participating in the auction sales enables the producers at any time to require compliance with the obligation. If they were to do so, the three Breton auction centres would then be segregated from each other, substantially restricting competition between dealers on the various local submarkets. The exclusive buying obligation in those agreements therefore has the object of restricting competition within the common market.

1. The obligation to have a packing centre in the catchment area of the relevant auction centre is contained in Article 18 of the agreement between the SICA de Saint-Pol-de-Léon and the Union des Expéditeurs. It is also imposed by the agreements between the dealers and SIPEFEL, since these agreements confine access to the auctions to dealers that are members of the Syndicat des Expéditeurs de Saint-Malo and the Statutes of the Syndicat require dealers to have a packing centre in the Saint-Malo area. This requirement for admission has the effect of making entry to the market more difficult for new dealers, especially as the investment entailed in complying with such a requirement is often unnecessary, as a large proportion of the vegetables offered at the auction sales are prepacked. Accordingly this requirement constitutes a substantial restriction of competition.

1. The Statutes of the Syndicat des Expéditeurs de Saint-Malo require a majority of the Board of Directors to be in favour before a new member can be admitted. This condition, imposed by the general meeting on 19 March 1975 in place of a clause originally adopted on 5 November 1973, requiring the approval of two-thirds of the members of the Syndicat, constitutes a decision by an association of undertakings for the purpose of Article 85 (1) of the Treaty. By virtue of the agreements between SIPEFEL and the Syndicat des Expéditeurs de Saint-Malo, only those dealers who are members of the Syndicat have access to the auctions at Saint-Méloir-des-Ondes. The decision of the Syndicat des Expéditeurs therefore has the effect of preventing new dealers from having access to the auctions at Saint-Méloir-des-Ondes. Since the Board of Directors of the Syndicat is composed of 12 dealers appointed by the general meeting, it may be assumed that the majority of the dealers buying at the Saint-Méloir-des-Ondes auctions are most unlikely to vote for the admission of a major new competitor, since the result of a new admission is likely to be a decline in the market shares held by the existing dealers, with a possible rise in the prices at which lots are sold at auction. It is by virtue of this condition that the application by GREX for admission to the Saint-Méloir-des-Ondes auctions has so far been refused. The resulting restriction of competition is particularly serious in that virtually all the autumn (1)Cauliflowers, artichokes and potatoes are among the products listed in Annex II to the Treaty.

Article 2 (1) of Council Regulation No 26 of 4 April 1962 provides that Article 85 (1) of the Treaty shall not apply to such of the agreements, decisions and practices referred to in the preceding Article as form an integral part of a national market organization or are necessary for attainment of the objectives set out in Article 39 of the Treaty. In particular, it shall not apply to agreements, decisions and practices of farmers, farmers' associations, or associations of such associations belonging to a single Member State which concern the production or sale of agricultural products or the use of joint facilities for the storage, treatment or processing of agricultural products, and under which there is no obligation to charge identical prices, unless the Commission finds that competition is thereby excluded or that the objectives of Article 39 of the Treaty are jeopardized.

The conditions for admission of buyers at these auctions do not qualify for exemption under Article 2 (1) of Regulation No 26, for the following reasons. 1. They do not form an integral part of a national market organization, and in any event a national organization may no longer exist for fruit and vegetables in France since there is a common organization of the market governed by Regulation (EEC) No 1035/72.

1. Furthermore they are not essential to the attainment of the objectives of Article 39 of the Treaty. It is clear from the third paragraph of the opening recitals to Regulation No 26 that the second exemption applies only where the application of Article 85 (1) would jeopardize the attainment of the objectives of the common agricultural policy in relation to the relevant products, and in any event the means for implementing the objectives of the common agricultural policy as set out in Article 39 of the Treaty are determined, as far as fruit and vegetables are concerned, by Regulation (EEC) No 1035/72. Although this Regulation made provision for certain rules being imposed on member producers' organizations, it did not make provision for rules applying to persons with whom the producers do business, notably dealers. As the conditions for admission were imposed only on dealers they do not come within Regulation (EEC) No 1035/72. Accordingly the obligations at issue, being imposed only on dealers, cannot be regarded as necessary for the attainment of the objectives of Article 39, nor are they necessary for the proper application of the measures provided for by Regulation (EEC) No 1035/72 in respect of producers' organizations, and the removal of these conditions in their present form would in no way affect the smooth operation of the auctions held by these organizations. The withdrawal of these obligations, at least in their present form, would in no way impede the smooth functioning of the auction sales. This is abundantly clear at least as regards the requirement for a majority vote in the Board of Directors of the Syndicat des Expéditeurs de Saint-Malo and the obligation to purchase and dispatch only on the dealers' own account, since the sole effect of these two restrictions is to reserve the Saint-Malo autumn cauliflower market for dealers already established in the area. The same considerations apply to the exclusive buying obligation and the obligation to have a packing centre in the catchment area of the auctions. These two obligations produce not only the geographical segregation of the three Breton auction centres, which is not necessary for the smooth operation of the auctions themselves, but they also exclude access to other sources of supply outside the area covered by the auctions, which is similarly unnecessary.

Article 1

(a) The clauses in the agreements between SICA de Saint-Pol-de-Léon and the Union des Expéditeurs de Saint-Pol-de-Léon and between SIPEFEL and the Syndicat des Expéditeurs de Saint-Malo, whereby dealers who obtain supplies at auction sales held at Saint-Pol-de-Léon and Saint-Méloir-des-Ondes are required to accept the obligations: - to buy exclusively at the auction sales to which they have been admitted,

and

• to be in possession of a packing centre,

constitute infringements of Article 85 (1) of the EEC Treaty.

(b) The decisions taken by the Syndicat des Expéditeurs de Saint-Malo: - subjecting admission of new buyers to the Saint-Méloir-des-Ondes auctions to a favourable decision by the management bodies set up by the Statutes of the Syndicat, without any reference to fixed and objective conditions of admission,

and

• obliging members to buy, pack and dispatch vegetables only on their own account,

constitute infringements of Article 85 (1) of the EEC Treaty.

Article 2

SICA de Saint-Pol-de-Léon, the Union des Expéditeurs, SIPEFEL and the Syndicat des Expéditeurs de Saint-Malo shall forthwith bring to an end the infringements referred to in Article 1.

Article 3

This Decision is addressed to the following associations of undertakings: - Société d'Investissements et de Coopération Agricoles, of Saint-Pol-de-Léon,

• Union des Expéditeurs et Exportateurs en Fruits et Légumes du Finistère, of Saint-Pol-de-Léon,

• Société Interprofessionnelle des Producteurs et Expéditeurs de Fruits, Légumes, Bulbes et Fleurs d'Ille et Vilaine "SICA-SIPEFEL", of Saint-Méloir-des-Ondes,

• Syndicat des Expéditeurs et Exportateurs en Légumes et Pommes de terre primeurs de la région Malouine, of Saint-Méloir-des-Ondes.

Done at Brussels, 2 December 1977.

For the Commission

Raymond VOUEL

Member of the Commission