Masterfoods Ltd contra HB Ice Cream Ltd.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Writing for the Court: Sevón
• ECLI: ECLI:EU:C:2000:249
• Date: 16 May 2000
• Docket Number: C-344/98
• Procedure Type: Reference for a preliminary ruling

61998C0344

Opinion of Mr Advocate General Cosmas delivered on 16 May 2000. - Masterfoods Ltd v HB Ice Cream Ltd. - Reference for a preliminary ruling: Supreme Court - Ireland. - Competition - Articles 85 and 86 of the EC Treaty (now Articles 81 EC and 82 EC) - Parallel proceedings before national and Community courts. - Case C-344/98.

European Court reports 2000 Page I-11369

Opinion of the Advocate-General

I Introduction

1. In this case the Court is asked to give a preliminary ruling on three questions referred to it by the Supreme Court of Ireland pursuant to Article 177 of the EC Treaty (now Article 234 EC). The first question refers to the relationship between the national courts and the Community administrative and judicial institutions in cases raising an issue of ad hoc interpretation and application of Articles 85(1) and 86 of the EC Treaty (now Articles 81(1) EC and 82 EC). The two subsequent questions concern the compatibility with the Community rules of contractual exclusivity clauses imposed by a manufacturer and distributor of ice-cream on retailers in connection with the use of freezer cabinets which the distributor provides for the other contracting party.

II Facts and procedure

2. The case concerns agreements entered into by HB Ice Cream Ltd, now Van Den Bergh Foods Ltd (hereinafter HB), in connection with the distribution of impulse ice cream in Ireland. HB's commercial policy involves providing freezer cabinets to retailers distributing its ice cream subject to the condition that those freezers will be used exclusively for its own products (hereinafter the exclusivity clause). HB, which, since 1974, has belonged to the Unilever Group, is the largest manufacturer and distributor of ice cream in Ireland; it has a dominant position in the market, its market share never having dropped below 70%.

3. Masterfoods Ltd (hereinafter Masterfoods) is a subsidiary of the US multinational Mars Inc. which entered the ice cream market in Ireland in 1989. From the summer of that year many retailers began to stock Mars ice cream in the freezer cabinets supplied by HB. HB asked them to comply with the exclusivity clause contained in the freezer cabinet agreement.

4. In March 1990 Masterfoods brought an action before the High Court of Ireland for a declaration that the exclusivity clause was contrary to Articles 85 and 86 of the EC Treaty. HB asked the court to restrain Masterfoods from inducing retailers to stock Mars ice cream in HB freezer cabinets. In April 1990 the High Court granted HB an interlocutory injunction.

5. On 28 May 1992 the High Court gave judgment, dismissing Masterfoods' action and granting HB a permanent injunction restraining Masterfoods from inducing retailers to stock Mars ice cream in freezers belonging to HB. However, HB's claim for damages was dismissed.

6. On 4 September 1992 Masterfoods appealed against the High Court's judgments to the Supreme Court. In its appeal it asked the Supreme Court, first, to set aside the High Court's judgment and injunction; secondly, to declare that the exclusivity clauses at issue were unlawful and void, since they were contrary to Articles 85 and 86 of the EC Treaty; thirdly, in the alternative, to order the case to be reheard by the High Court; and fourthly, to order the other party to pay the costs.

7. It should be noted that, in parallel with those proceedings before the national courts, on 18 September 1991 Masterfoods lodged a complaint with the Commission, alleging that the exclusivity terms in the ice cream supply agreement between HB and the retailers were contrary to the Community competition rules. On 29 July 1993, the Commission reached the provisional conclusion that HB's distribution system constituted an infringement of Articles 85 and 86 of the Treaty and issued a statement of objections. It gave HB the opportunity of suggesting alterations to its ice cream distribution system. On 8 March 1995, following discussions with the Commission, HB notified the Commission of its proposals for alterations. The Commission initially expressed the prima facie view that the changes would merit exemption. On 15 August 1995 it issued a notice stating its intention to take a favourable view of the (revised) distribution arrangements notified. Subsequently, however, finding that the changes had not achieved the expected results on the market, and in the light of the market situation at the time, the Commission revised its expressed intention and sent a new statement of objections to HB (22 January 1997). Lastly, on 11 March 1998, it adopted Decision 98/531/EC (hereinafter Decision 98/531).

8. Article 1 of Decision 98/531 states that: [t]he exclusivity provision in the freezer-cabinet agreements concluded between Van den Bergh Foods Limited and retailers in Ireland, for the placement of cabinets in retail outlets which have only one or more freezer cabinets supplied by Van den Bergh Foods Limited for the stocking of single-wrapped items of impulse ice cream, and not having a freezer cabinet either procured by themselves or provided by an ice-cream manufacturer other than by Van den Bergh Foods Limited constitutes an infringement of Article 85(1) of the EC Treaty.

9. Article 3 of Decision 98/531 states: Van den Bergh Foods Limited's inducement to retailers in Ireland not having a freezer cabinet either procured by themselves or provided by an ice-cream manufacturer other than by Van den Bergh Foods Limited, to enter into freezer-cabinet agreements subject to a condition of exclusivity by offering to supply to them one or more freezer cabinets for the stocking of single-wrapped items of impulse ice cream, and to maintain the cabinets, free of any direct charge, constitutes an infringement of Article 86 of the EC Treaty.

10. On 21 April 1998 HB brought an action before the Court of First Instance of the European Communities for the annulment of the Commission decision (Case T-65/98).

11. On 16 June 1998 the Supreme Court decided, by order, to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

1. In the light of the judgment and orders of the High Court of Ireland dated 28 May 1992, the decision of the Commission of the European Communities dated 11 March 1998 and the applications by Van den Bergh Foods Limited pursuant to Articles 173, 185 and 186 of the Treaty establishing the European Economic Community (EC Treaty) to annul and suspend the latter decision:

(i) Does the obligation of sincere cooperation with the Commission as expounded by the Court of Justice require the Supreme Court to stay the instant proceedings pending the disposal of the appeal to the Court of First Instance against the aforesaid decision of the Commission and any subsequent appeal to the Court of Justice?

(ii) Does a decision of the Commission which is addressed to an individual party (and which is the subject of an application for annulment and suspension by that party) declaring such party's freezer cabinet agreement to be contrary to Article 85(1) and/or Article 86 of the EC Treaty thereby prevent such party from seeking to uphold a contrary judgment of the national court in that party's favour on the same or similar issues falling under Articles 85 and 86 of the Treaty where that decision of the national court is appealed to the national court of final appeal?

Questions 2 and 3 only arise in the event of a negative answer to Question 1(i).

2. Having regard to the legal and economic context of the cabinet agreements at issue in the market for single-wrapped items of impulse ice cream, does the practice whereby a manufacturer and/or supplier of ice cream provides a freezer to a retailer at no direct charge or otherwise induces the retailer to accept the freezer subject to the condition that the retailer stock no ice cream in such freezer other than that supplied by the said manufacturer and/or supplier constitute an infringement of the provisions of Article 85(1) and/or Article 86 of the EC Treaty?

3. Are freezer exclusivity agreements protected from challenge under Articles 85 and 86 of the EC Treaty by reason of the provisions of Article 222 of the EC Treaty?

12. In addition, in the case brought before the Court of First Instance by HB's application of 21 April 1998, by order of 7 July 1998, the President of the Court of First Instance suspended the operation of the Commission decision until the Court of First Instance had given judgment terminating the proceedings in that case (T-65/98).

13. By order of 28 April 1999, the President of the Fifth Chamber of the Court of First Instance, pursuant to the third paragraph of Article 47 of the EC Statute of the Court of Justice, stayed the proceedings in Case T-65/98 until the Court of Justice had delivered judgment in the present case.

III The need to avoid inconsistency between the decisions of national courts and those of Community bodies

14. The central issue arising in the case before the Court is clearly the avoidance of inconsistency between the decisions of national courts and those of Community institutions in the context of the interpretation and application of Articles 85 and 86 of the EC Treaty (now Articles 81 EC and 82 EC). That danger arises, as the Court observed in Delimitis, because in respect of certain issues dealt with by Articles 85 and 86 of the EC Treaty including the question whether the conduct of an undertaking should be classified as compatible with Articles 85(1) and 86 of the EC Treaty the Commission does not have exclusive competence but rather shares competence with the national courts.

A When does a risk of inconsistent decisions arise?

(a) Generally

15. The following introductory remarks must be made with regard to the question of when there is a conflict or the risk of a conflict between, on the one hand, a decision of the Commission applying Articles 85(1) and 86 of the EC Treaty to a...