On 14 November 2017, The European Court of Justice (ECJ) provided a welcome guidance on the implementation of antitrust rules to the sensitive and strategic agricultural industry. The ECJ clarified that practices agreed within producer organization (PO) or association of producer organizations (APO) active in the agricultural sector escape the antitrust rules provided that a number of requirements are met:
- The practice should be implemented by an entity entrusted with the achievement of the objectives pursued by the common agricultural policy and recognized as such by a Member State under the rules of the common organization of the market ;
- The practice should be adopted within a single PO or APO. A practice adopted between POs or APOs would not fall outside the scope of antitrust rules ; and
- The practice agreed within the PO or APO concerned must be necessary to achieve the objectives pursued by the OP or APO. The practice should be connected strictly to the pursuit of one or more of the objectives assigned to the OP or APO. It could relate to the exchange of strategic information necessary to ensure that production is planned and adjusted to demand or to stabilize producers' prices. Equally, the objective of stabilizing producer prices to ensure a fair standard of living for the agricultural community may justify the coordination on the quantities of production within the same PO/APO. Conversely, the collective fixing of minimum sale prices may not be considered as proportionate to the objectives of stabilizing prices and concentrating supply.
The exclusion from antitrust rules should be interpreted restrictively.
In light of the above, the ECJ notes that the French endives operators were not recognized as POs or APOs by the French authorities. Furthermore, the practices under scrutiny were adopted between several POs and APOs. Finally, the practices adopted by the French endives producers were not necessary as they related to collective fixing of minimum prices sales.
The French Supreme Court (Cour de cassation) should now decide the case in light of the ECJ’s judgment.
02 01 2018