C-71/74

JUDGMENT OF 15. 5. 1975 — CASE 71/74 FRUBO v COMMISSION

CELEX: 61974CJ0071
Datum: 1975-05-15
Källa: eur-lex.europa.eu

THE COURT composed of: R. Lecourt, President, J. Mertens de Wilmars and A. J. Mackenzie Stuart, Presidents of Chambers, A. M. Donner, R. Monaco, P. Pescatore, H. Kutscher, M. Sørensen and A. O'Keeffe (Rapporteur), Judges, Advocate-General: J. P. Warner Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts

I — Facts

II — Procedure

III — Conclusions of the parties

IV — Submissions and arguments of the parties

(a) First objection as to form

(b) Second objection as to form

(c) Third objection as to form

(d) Fourth objection as to form

(e) Cumulative effect of objections as to form

(f) First objection as to substance: inapplicability of Regulation No 26

(g) Second objection as to substance: classification of the agreement as an agreement between undertakings within the meaning of Article 85 (1)

(h) Third objection as to substance: restriction of competition

(i) Forth objection as to substance: obstacles to trade between Member States

(j) First alternative objection as to substance: indispensability of the auction sale obligation

(k) Second alternative objection as to substance: Dutch market as substantial part of the common market

(l) Objections as to the reasons given for the Decision

(m) Intervention by the Fruitunie association

Law

First submission as to form

Second submission as to form

Third submission as to form

Fourth submission as to form

First submission as to substance

Second submission as to substance

Third and fourth submissions as to substance

First alternative submission as to substance

Second alternative submission as to substance

Costs

I —. Facts

1. No one may take part in the auction sales, which shall take place at Rotterdam, without authorization from the committee responsible for seeing that the provisions of the agreement are observed (Articles 2 and 3); neverthelesss, importers admitted to the auction sales may authorize exporters or foreign wholesalers to take part provided that this is exclusively in connexion with purchases of goods in transit (Article 5);

2. Authority to take part in the auction sales in the capacity of seller is granted on application to any importer established in the EEC who:

3. Authority to take part in the auction sales in the capacity of purchaser is granted on application to any fruit and vegetable wholesaler established in the Netherlands who:

4. Importers and wholesalers allowed to take part in the auction sales in Rotterdam shall be prohibited from marketing in the Netherlands, otherwise than by means of an auction sale on importation, citrus fruits produced outside the EEC or apples and pears of non-European origin unless they have already been sold at an auction sale on importation (Article 9 (1)); an exception to this rule is made in cases where the fruits referred to in paragraph 1 are bought from an importer or a wholesaler established in another Member country of the EEC and by whom the fruit has actually been despatched, cleared through customs and unloaded (the condition concerning undloading not being required after 24 June 1974), (Article 9 (2)); if so required by the committee responsible for seeing that the agreement is observed, the purchaser who takes advantage of the provision in paragraph 2 must be able to show that the conditions laid down in this paragraph have been fulfilled (Article 9 (3));

5. The obligation to proceed through import auction sales shall not apply to:

6. The Rotterdam auction sales shall take place regularly every week, at 11 o'clock on Mondays, Tuesdays and Wednesdays; fruit may be placed on sale only if the quantities involved have been notified in advance; the sale of larger quantities is authorized only if they exceed the quantity notified by 20 % or less;

7. As regards arrangements for the sales, the agreement includes a series of further provisions relating to samples of the fruit placed on sale, inspectors responsible for checking the condition of the fruit, the quantities of fruit placed on sale, sampling and so-called blind sales, i.e. sales of fruit of which it has not been possible to exhibit samples in time;

8. The committee responsible for seeing that the agreement is observed may impose the following penalties for failure to observe the agreement:

(a). declared that the provisions made in Article 9 of the agreement concluded between the importers' association and the wholesalers' association and relating to the organization of auction sales for citrus and other fruit imported into the Netherlands and also the act of implementing these provisions were in breach of Article 85 (1) of the EEC Treaty;

(b). ordered the said associations and the undertakings taking part in the Rotterdam auction sales, listed in an Annex to the Decision, to bring the stated infringements to an end without delay.

II —. Procedure

III —. Conclusions of the parties

IV —. Submissions and arguments of the parties

(a). First objection as to form

(b). Second objection as to form

(c). Third objection as to form

(d). Fourth objection as to form

(e). Cumulative effect of objections as to form

(f). First objection as to substance: inapplicability of Regulation No 26

1. that though the products covered by the agreement appear in Annex II to the EEC Treaty, the provisions of Article 2 of Regulation No 26 cannot be applied because:

2. Two of the objectives set out in Article 39 are designed to increase agricultural productivity in the Community and thus to ensure a fair standard of living for growers, whereas the agreement is concerned only with imports of fruit produced outside the Community;

3. As regards the other objectives of Article 39:

(g). Second objection as to substance: classification of the agreement as an agreement between undertakings within the meaning of Article 85 (1)

(h). Third objection as to substance: restriction of competition

1. Article 9 (1) of the agreement has as its object and effect the restriction of competition within the common market. The article prevents wholesalers from themselves acting as importers and thus compels them to obtain their main supplies at the Rotterdam auctions. Although this does not prevent them from also abtaining supplies in the other auctions which exist in the EEC, at Antwerp and at Hamburg, the possibilities there are very limited.

2. There is no certainty that the citrus fruit in dispute, wherever it comes from, possesses the same quality or the same degree of freshness as that on offer at the big import markets of the EEC. There is growing competition between Spanish citrus fruit, delivered by rail to the Netherlands market much more quickly, and citrus delivered by sea from more distant places. Thus, wholesalers admitted to the auctions do not always observe the provisions of the agreement and from time to time make purchases without going through the Rotterdam auction; this proves that economic interests are involved.

(i). Forth objection as to substance: obstacles to trade between Member States

(j). First alternative objection as to substance: indispensability of the auction sale obligation

1. By concentrating supply and demand, the system of sale by auction enables the transport and marketing costs to be reduced in the case of the goods concerned. Though, in the present case, these advantages are present in the case of citrus fruit imported by sea from distant countries, they are practically non-existent in the case of Spain because of the disadvantages arising from the inherent inflexibility of the system. The fact that these sales are held only on certain days of the week and that there must be prior access to the goods so that samples can be selected is sometimes the cause of delay in deliveries to retailers and affects the freshness and even the quality of the fruit.

2. The economic value of a system of this kind lies in the economies effected when compared with separate action by the various operators concerned and, in the present case, is mainly reflected in more favourable import prices, which itself constitutes sufficient incentive for Dutch wholesalers to continue obtaining their supplies at the Rotterdam auction sales. The result of removing the obligation referred to would not be that the wholesalers would switch to imports by sea from distant countries but that they would, for example, conclude purchases in Spain or on the other EEC import markets every time they could get the benefit of better prices than those in Rotterdam or, when prices were the same, obtain quicker delivery of fruit in fresher condition.

3. For all these reasons, therefore, the obligation appearing under Article 9 of the agreement is not an indispensable condition for obtaining the benefits provided by the agreement.

(k). Second alternative objection as to substance: Dutch market as substantial part of the common market

(l). Objections as to the reasons given for the Decision

(m). Intervention by the Fruitunie association

1. By application lodged at the Court Registry on 23 September 1974 the Nederlandse Vereniging voor Fruit en Groentenimporthandel and the Nederlandse Bond van Grossiers in Zuidvruchten en ander Geïmporteerd Fruit Frubo asked the Court to annul the Decision of the Commission of 25 July 1975 finding that they had infringed Article 85 (1) of the EEC Treaty;

2. In 1952, the applicants concluded an agreement for the establishment of a system of sales by auction for citrus fruit produced outside the Community and for apples and pears of non-European origin imported into the Netherlands; since then the agreement has been the subject of several minor amendments and, on 8 February 1968, of objections from a Dutch wholesaler, submitted pursuant to Article 3 (2) (b) of Regulation No 17 implementing Articles 85 and 86 of the Treaty.

3. Article 9 of the said agreement, which is the sole subject of dispute in this case, obliges wholesalers to deal in the products in dispute through the medium of an import auction unless they were bought from an importer-wholesaler established in another Member State of the EEC where they have actually been brought in, unloaded and cleared through customs (the obligation concerning unloading having been removed in the applicant's last draft amendment addressed to the Commission on 24 June 1974).

4. Despite the exception provided for and the proposed amendment, the Decision under challenge treats the clause in dispute as constituting an infringement of Article 85.

5. The applicants contend that the defendant has not, pursuant to the procedure provided for under the regulation, ruled on the applicability or otherwise of Regulation No 26 of the Council of 4 April 1962 applying certain rules of competition to production of and trade in agricultural products.

6. The defendant maintains that if, when a decision is taken applying Article 85 to agricultural products, it follows the procedure of Regulation No 17 and decides that an agreement whose exemption has been applied for does not come under Regulation No 26, this does not affect the rights of the applicants.

7. Article 1 of Regulation No 26, implementing Article 42 of the EEC Treaty, provides that the production of or trade in agricultural products are subject to the requirements of Article 85.

8. Nevertheless, Article 2 (1) of Regulation No 26 provides as follows: 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.

9. Article 2 (2) reads: After consulting the Member States and hearing the undertakings or associations of undertakings concerned and any other natural or legal person that it considers appropriate, the Commission shall have sole power, subject to review by the Court of Justice, to determine, by decision which shall be published, which agreements, decisions and practices fulfil the conditions specified in paragraph 1.

10. Article 2 (3) reads: The Commission shall undertake such determination either on its own initiative or at the request of a competent authority of Member State or of an interested undertaking or association of undertakings.

11. To require the Commission to consult the Member States even in cases where it is in no doubt that the exceptions provided for under Regulation No 26 cannot apply would oblige the Commission to fulfil unnecessary formalities and needlessly delay enquiries into the matters concerned.

12. The applicants criticize the Commission first for having addressed its first statement of objections of 12 November 1969 only to their members and not to the applicants themselves and, secondly, for having, after the second statement of objections of 19 November 1973, continued the procedure on the basis of the new text of Article 9 of the agreement as it appeared after the amendment of 21 February 1974.

13. The applicants cannot claim that they were not informed by the undertakings which they organize, because the subject of the statement of objections was, of course, the agreement concluded between the two associations.

14. Moreover, the nature of the amendment of 21 February 1974 did not require a fresh statement of objections.

15. The applicants contend that the Commission has, since 1961, used the Netherlands auctions as a source of information for the purpose of fixing the reference prices for fruit and vegetables.

16. It claims that the Commission cannot, consequently, raise objections to the agreement without departing from the principles of good administration and misusing its powers.

17. The Commission could make use of the details of prices supplied by the Rotterdam auctions as statistical information enabling it to direct the common agricultural policy without thereby legitimizing the conditions imposed in the agreement on the operations of wholesalers who take part in the sales by auction.

18. The applicants criticize the defendant for not having taken account of assurances given by the Director of the Restrictive Practices and Dominant Positions Directorate in his letter of 21 December 1971 regarding the compatibility of an amended version of the agreement with the requirements of Article 85 (3).

19. In the letter, the Director-General of Competition (sic), taking note of a specific amendment to the agreement which the applicants were prepared to accept, states that, in his view, the agreement as thus amended, can, notwithstanding the remaining restriction on competition, qualify for exemption under Article 85 (3).

20. Expressed in these terms, the opinion given could not convey any impression that it committed the Commission; nor, moreover, is the signatory authorized to enter into such a commitment.

21. The submissions as to form must, accordingly, be dismissed.

22. The applicants contend that, because the disputed Decision withheld application of Article 2 of Regulation No 26 to the disputed agreement on the ground that the agreement was not essential for the attainment of the objectives laid down under Article 39, the Decision infringed not only Article 2 but also Articles 39, 40 and 85 of the Treaty.

23. The stabilization of markets referred to in Article 39 covers not only adjustment of supply to demand in order to develop Community production but also the compatibility of trade in products imported from third countries with paragraphs (c), (d) and (e) of the said Article.

24. The agreement did, in fact, have the beneficial effect of concentrating the supply of and demand for fruit imported from third countries in the Rotterdam import auctions and thus of ensuring the stability of the market, the availability of supplies and their reaching consumers at reasonable prices.

25. The exception provided for under Article 2 (1) of Regulation No 26, however, applies only to agreements necessary for attainment of the objectives set out in Article 39 of the Treaty.

26. The applicants have not shown in what respect their agreement, which is concerned with products coming from third countries, can be necessary to increase agricultural productivity or to ensure a fair standard of living for the agricultural community, as the first two objectives of the common agricultural policy are expressed.

27. In consequence, the Commission could reasonably regard Article 2 of Regulation No 26 as inapplicable.

28. The applicants deny that the agreement made between them is, as it has been described in the disputed Decision, an agreement between undertakings within the meaning of Article 85 (1).

29. In their view, an agreement between associations is caught by this provision only if it has actually created obligations which are directly enforceable as between the affiliated undertakings, which is not the position in the present case since only the associations themselves can compel their affiliates to discharge the obligations imposed upon them by the agreement.

30. Article 85 (1) applies to associations in so far as their own activities of those of the undertakings belonging to them are calculated to produce the results to which it refers.

31. To place any other interpretation on Article 85 (1) would be to remove its substance.

32. As an association of undertakings, the applicants are therefore subject to the provisions of Article 85.

33. The applicants criticize the disputed Decision for having stated that the object and effect of Article 9 of the Agreement is to restrict competition within the Common Market and to affect trade between Member States.

34. They contend that wholesalers who are members of the association can, outside the auctions, themselves import into the Netherlands citrus fruit placed on the marked by third parties in other Member States which, if it comes from third countries, has been cleared through customs in those States.

35. Importers established in other Member States have access to the Rotterdam auctions.

36. Both the defendant and the intervener, the Fruitunie association which organizes wholesalers who lodged an objection pursuant to Article 3, paragraph 2 (b) of Regulation No 17, have provided numerous examples to prove that Dutch wholesalers are prevented from themselves acting as importers and that importers established in the other countries of the Community cannot, without going through the auctions, deliver fruit ot vegetables to a Dutch wholesaler subject to the provisions of the agreement, which inflicts special hardship on those based near the frontiers of the Netherlands.

37. The agreement prohibits any Dutch wholesaler who takes part in the import auctions from buying citrus fruit unless it has been already imported by third parties in another member country of the Community where it has been cleared through customs.

38. Because it restricts the freedom of members to import direct into the Netherlands, this clause is liable to interfere with the natural movement of trade and thus to affect trade between member countries.

39. All the submissions as to substance must therefore be dismissed.

40. According to the applicants, the Decision infringed Article 85 (3) when it declared that the obligation to sell at the auctions was not indispensable to the attainment of the advantages flowing from the agreement, namely reduced transport and marketing costs, and more favourable import prices.

41. They contend that these advantages are in fact obtainable only by means of the disputed obligation.

42. Though the applicants have submitted arguments capable of demonstrating that the advantages in question are underwritten by the obligation in Article 9 of the agreement, they have not demonstrated that it is an indispensable condition for the proper working of the system established by the agreement and, consequently, for the advantages accruing therefrom.

43. Consequently, and in view of the measure of discretion available to the Commission on this subject, the inaccuracy of the reasons given for the disputed Decision has not been established.

44. The applicants contend that the Decision infringed Article 85 (3) in that it wrongly decided that the disputed agreement was capable of eliminating competition in respect of a substantial proportion of the products involved.

45. In their view, as the public sale obligation included in the agreement does not impede direct competition on the Dutch market, there is no obstacle which might affect a substantial proportion of the supply of the products involved.

46. As the substance of this objection is the same as that of the third and fourth objections as to substance, which have been dismissed, it is not necessary to give it separate consideration.

47. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party shall be ordered to pay the costs.

48. As the applicants have failed in all their pleas they should, therefore, be ordered to pay the costs.

On those grounds, THE COURT hereby:

1 Dismisses the application;

2 Orders the applicants to pay the costs.