2003/600/EC: Commission Decision of 2 April 2003 relating to a proceeding pursuant to Article 81 of the EC Treaty (Case COMP/C.38.279/F3 — French beef) (notified under document number C(2003) 1065)

• Published date: 19 August 2003
• Official Gazette Publication: Gazzetta ufficiale dell’Unione europea, L 209, 19 agosto 2003,Diario Oficial de la Unión Europea, L 209, 19 de agosto de 2003,Journal officiel de l’Union européenne, L 209, 19 août 2003

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2003/600/EC: Commission Decision of 2 April 2003 relating to a proceeding pursuant to Article 81 of the EC Treaty (Case COMP/C.38.279/F3 — French beef) (notified under document number C(2003) 1065)

Official Journal L 209 , 19/08/2003 P. 0012 - 0041

Commission Decision

of 2 April 2003

relating to a proceeding pursuant to Article 81 of the EC Treaty

(Case COMP/C.38.279/F3 - French beef)

(notified under document number C(2003) 1065)

(Only the French text is authentic)

(2003/600/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation No 17 of 6 February 1962, first Regulation implementing Articles 85 and 86 of the Treaty(1), as last amended by Regulation (EC) No 1/2003(2), and in particular Article 15(2) thereof,

Having regard to Council Regulation No 26 of 4 April 1962 applying certain rules of competition to production of and trade in agricultural products(3), as amended by Regulation No 49(4), and in particular Article 2 thereof,

Having regard to the Commission decision of 24 June 2002 to initiate proceedings in this case,

Having given the undertakings concerned the opportunity of being heard on the matters to which the Commission has taken objection, in accordance with Article 19(1) of Regulation No 17 and Article 2 of Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles 85 and 86 of the EC Treaty(5),

Having consulted the Advisory Committee on Restrictive Practices and Dominant Positions,

Having regard to the final report of the Hearing Officer in this case(6),

Whereas:

1. THE FACTS

1.1. Subject of the case and procedure

(1) This Decision relates to a written agreement, dated 24 October 2001, concluded between six French federations in order to set a minimum purchase price for certain categories of cattle and suspend imports of beef into France. Four of the federations which signed the agreement represent cattle farmers: the Fédération nationale des syndicats d'exploitants agricoles (FNSEA), the Fédération nationale bovine (FNB), the Fédération nationale des producteurs de lait (FNPL) and the Jeunes agriculteurs (JA, formerly the Centre national des jeunes agriculteurs or CNJA). The two other federations which signed the agreement represent cattle slaughterers: the Fédération nationale de l'industrie et des commerces en gros des viandes (FNICGV) and the Fédération nationale de la coopération bétail et viande (FNCBV). This Decision also relates to the verbal agreement concluded at the end of November and beginning of December 2001 between the same parties and having the same object, applicable following the expiry of the agreement concluded on 24 October 2001.

(2) On 30 October 2001, having learned of the signature of the agreement of 24 October 2001, the Commission wrote to the French Permanent Representative to the European Union requesting further information on the agreement and on the involvement of the French State. A reply was received by letter dated 9 November 2001.

(3) On 9 November 2001, the Commission wrote to five of the federations which had signed the agreement requesting information pursuant to Article 11 of Regulation No 17; since the Commission was not at that time aware that the FNCBV had also signed the agreement, the request for information was not addressed to that federation. The five federations in question replied accordingly to the requests for information on 15 and 23 November 2001.

(4) On 26 November 2001, in the light of the information thus obtained, the Commission sent the six federations a letter of formal notice stating that the facts which had come to its knowledge indicated, at first sight, that the Community competition rules had been infringed. The addressees were asked to submit their comments by 28 November. Each of them replied that the agreement would end on 30 November 2001 and that it would not be extended.

(5) On 17 December 2001, having information indicating that the agreement was in fact continuing, the Commission carried out investigations on the premises of the FNSEA and the FNB in Paris pursuant to Article 14(3) of Regulation No 17, and on the premises of the FNICGV, also in Paris, on the basis of Article 14(2) of Regulation No 17.

(6) On 24 June 2002, the Commission adopted a statement of objections addressed to the six federations. The parties submitted their written comments between 23 September and 4 October 2002. They also made known their views at the hearing held on 31 October 2002.

1.2. The Parties

(7) The FNICGV is the trade organisation representing undertakings of all sizes and types of activity operating in the meat industry and meat wholesaling (beef and veal, pigmeat, mutton and lamb, horsemeat and offal). The FNICGV is a union (syndicat) established under French law and, on 1 January 2000, had more than 400 members throughout France. Its members account for more that 75 % of turnover in the sector. In its comments on the statement of objections, the FNICGV stated that its share "as regards slaughter" (en matière d'abattage) is 80 %, or 60 % if the cooperatives, which are ordinary rather than permanent, members are not included.

(8) The FNCBV is the federation representing the cooperative movement. It comprises 300 cooperative groups of producers in the cattle, pig and sheep farming sectors and some 30 slaughter and meat-processing groups or undertakings.

(9) The FNSEA, which is the main French farmers' union, has various branches. The basic level is the local farmers' union (syndicat d'exploitants agricoles); the local farmers' unions are grouped together at department (département) level. The grouping is called the Fédération départementale des syndicats d'exploitants agricoles (FDSEA) or Union départementale des syndicats d'exploitants agricoles (UDSEA), and these are members of the FNSEA. Regional federations coordinate the activities of the FDSEAs or UDSEAs in each region. The FNSEA also comprises 38 specialised associations representing the interests of each type of producer. These specialised associations include the FNB and the FNPL, both of which signed the agreement of 24 October 2001. Lastly, the FNSEA also comprises four social affairs sections, which are not covered by this proceeding. Young farmers (under 35 years of age) have their own representative body, the JA. To be a member of the local young farmers' centre, one must also be a member of the local FDSEA/UDSEA trade union. The FNSEA, the JA, the FNB and the FNPL are trade unions governed by French law.

1.3. The beef sector in France and the October 2000 crisis

(10) The cattle population in the Community numbers some 81 million head. French cattle numbers account for more than 25 % of this total. Every year, slaughtered adult cattle in France represent approximately 1,3 million tonnes of carcase weight equivalent (1,361 million in 1999, 1,277 million in 2000 and 1,315 million in 2001). Slaughtered dairy cattle (i.e. cows intended for milk production) or suckler cows (i.e. cows for the rearing of calves) represent approximately 50 % of this total (620000, 624000 and 600000 tonnes of carcase weight equivalent in 1999, 2000 and 2001 respectively)(7). In a report drawn up by the French body OFIVAL (Office national interprofessionnel des viandes, de l'élevage et de l'aviculture) in October 2002 on "the beef sector in France"(8), one of the tables is headed "operators". Against the heading "production", the table indicates "240000 farms with more than five" adult cattle, with turnover estimated at EUR 4,4 billion. Against the heading "slaughter", the table cites "443 slaughter and cutting enterprises with more than 20 employees"; turnover in "butcher's meat" is estimated at EUR 14 billion, including EUR 6,2 billion for "beef and veal".

(11) Total imports into France (live adult cattle, fresh and frozen meat) from other Member States amounted to 342000 tonnes of carcase weight equivalent in 1999, 331000 tonnes in 2000 and 262000 tonnes in 2001. Such imports account for virtually all French imports of beef and veal (only 5 % of French imports of such products come from non-Community countries). France is one of the main meat importers in the Community, just as it is one of the main exporters to the other Member States. In 2001, French imports were worth EUR 1354 million and French exports EUR 744 million(9). Most of the trade is in fresh or frozen meat, not live animals. It should be borne in mind that at that time France was unlawfully banning the import of beef originating in the United Kingdom. That France thereby failed to fulfil its obligations has been confirmed by the Court of Justice of the European Communities(10).

(12) In October 2000, a new case of bovine spongiform encephalopathy (BSE or mad cow disease) was discovered. It involved an animal from a herd from which, in the meantime, 11 other animals had been slaughtered and their meat put up for sale in a supermarket chain. Other cases of BSE were subsequently discovered in other Member States. At the same time, sheep in the United Kingdom were badly hit by an outbreak of foot-and-mouth disease, which had an impact on meat consumption in general in other Member States as well as the United Kingdom.

(13) This situation, which was widely reported in the media, created a new crisis in the beef sector. As from October 2000, there was a sharp drop in consumption in a number of Member States, including France, but also a substantial reduction in French imports and exports; for example, the last two months of 2000 saw a 50 % drop in French imports compared with the same months in 1999. However, as from the middle of 2001, consumption in France recovered considerably, so that the decline for 2001 as a whole compared to 2000 was ultimately on a much smaller scale than...