COMMISSION DECISION of 2 August 1989 relating to a proceeding under Article 85 of the EEC Treaty (IV/31.553 - Welded steel mesh) (Only the Dutch, French, German and Italian texts are authentic) (89/515/EEC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Economic 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 the Act of Accession of Spain and Portugal, and in particular Articles 3 and 15 thereof,

Having regard to the Commission Decision of 26 January 1987 to open on its own initiative a proceeding under Article 3 of Regulation No 17,

Having given the parties concerned the opportunity to make known their views on objections raised by the Commission, pursuant to Article 19 of Regulation No 17 and Commission Regulation No 99/63/EEC of 25 July 1963 on the hearings provided for in Article 19 (1) and (2) of Council Regulation No 17 (2),

After consulting the Advisory Committee on Restrictive Practices and Dominant Positions,

Whereas:

I. THE FACTS

A. The relevant products

(1)

Welded steel mesh is a prefabricated reinforcement product made from smooth or ribbed cold-drawn

reinforcing steel wires joined together by right-angle spot welding to form a network. It is a technically mature and proven reinforcement material that is used in almost all areas of reinforced concrete construction, both on the building site and for inclusion in prefabricated components. Welded mesh can be laid out more quickly and satisfactorily than reinforcing bars, a related product which is delivered in the form of long bars to the site, where they are cut to size, bent and installed. The use of welded mesh results in a saving on time and wage bills and in a smaller scrapped material loss.

Welded mesh is laid in concrete to increase its tensile strength and is employed exclusively for the reinforcement of flat or bar shaped constructional components.

(2)

The value added in welded mesh compared with its intermediate material, wire rod, is relatively small (20 to 25 %). Its final price depends greatly, therefore, on the price of the intermediate material.

(3)

There are different types of welded mesh:

(a) mesh from stock or standard mesh;

(b) catalogue mesh;

(c) tailor-made mesh (3).

As far as the purpose for which they are used is concerned, these types are in competition with one another. A high degree of substitutability exists, especially between standard mesh and catalogue mesh (see also 138 and 141). There is also a close connection as far as prices are concerned in that the price of one type of mesh exercises an appreciable influence on the price of another, especially as the value added is small for all types. This is acknowledged by some of the participant undertakings themselves (see 114). The relevant product market can therefore be said to be the market

for welded steel mesh in general, within which there is a sub-market for tailor-made mesh.

B. The market

(4)

There is substantial trade in welded mesh between Member States. Trade with third countries, on the other hand, is smaller. The following table gives a picture of intra-Community trade and of trade with third countries.

Table 1

EEC import and export data for welded mesh

(in tonnes)

Year

Imports

Exports

from other

Member States

from non-

Member States

Total

to other

Member States

to non-

Member States

Total

(1)

(2)

(3)

(4)

(5)

(6)

1980

212 392

3 197

215 589

210 852

58 501

269 353

1981

177 737

1 812

179 549

184 132

101 294

285 426

1982

160 805

973

161 778

153 188

84 827

238 015

1983

195 955

3 264

199 219

190 734

67 515

258 249

1984

230 374

8 417

238 791

224 141

74 789

289 930

1985

265 090

27 260

292 350

272 956

104 470

377 426

1986

310 335

12 708

323 043

338 282

72 207

410 489

1987

358 402

26 115

386 517

376 052

94 342

470 394

Source: Eurostat, NIMEXE code 73.27-20.

The following table gives figures for total production and consumption in the six original Member States, in which the undertakings to which this Decision relates are based:

Table 2 Total produced and consumed in the six original Member States

(B, D, F, I, L, NL) (¹)

(in tonnes)

Year

Production

Consumption

1980

1981

1982

1983

1984

1985

1986

1987

2 097 658

2 146 839

1 827 231

2 095 785

1 869 969

1 797 349

1 863 314

1 994 358

2 068 576

2 079 227

1 781 942

2 063 708

1 816 439

1 705 929

1 775 977

1 877 719

(¹) These figures are in part based on estimates, as data for the Italian market are incomplete.

(5)

Intra-Community trade is most intensive in

the border regions. This is because transport costs are high having regard to the high volume of welded mesh compared with that of the intermediate product, wire rod. Accordingly many integrated welded mesh producers prefer to deliver wire rod rather than welded mesh to neighbouring countries and produce welded mesh there in local subsidiaries or in other undertakings with whom they have a long-term cooperation arrangement regarding deliveries.

However, when the price of the product is relatively high in a particular market, transport costs do not present an insurmountable obstacle.

(6)

The building and construction industry is a

principal source of demand for welded mesh. The sale and hence the production of welded mesh therefore depends essentially on trends in building activity.

C. Survey of the different relevant national and regional markets

I. FRENCH MARKET

(7)

The French market shows the following picture for the years 1980 to 1987:

Table 3

France: market data for welded mesh 1980 to 1987

(in tonnes)

Year

Total

deliveries

by home

producers

Imports

Exports

from

Member

States

from non-

Member

States

Total

(2) + (3)

to other

Member

States

to non-

Member

States

Total

(5) + (6)

Market

supply

(total

(1) + (4))

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

1980

1981

1982

1983

1984

1985

1986

1987

213 104

205 245

158 493

186 986

134 925

148 883

163 857

201 124

64 109

73 184

56 687

61 926

77 516

91 725

114 695

132 712

1 983

901

413

632

3 094

748

3 138

3 159

66 092

74 085

57 100

62 558

80 610

99 207

117 833

135 871

25 343

19 118

14 406

16 471

19 401

17 070

17 366

18 241

6 915

17 444

9 500

10 915

11 234

16 422

3 078

3 013

32 258

36 562

23 906

27 386

30 635

33 492

20 444

21 254

279 196

279 330

215 593

249 544

215 535

248 090

253 246

315 741

Source: Eurostat and Syndicat national du trefilage d'acier (STA).

II. BENELUX-MARKET

(8)

The market data for the Benelux market for the years 1980 to 1987 show the following picture:

Table 4

BLEU (¹) and NL-Market data for welded mesh

(in tonnes)

Year

Total deliveries

by home producers

Imports

Exports

Market supply

(demand)

BLEU

NL

BLEU

NL

BLEU

NL

BLEU

(total

(1)+(3)-(5))

NL

(total

(2)+(4)-(6))

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

1980

96 752

126 461

28 869

56 665

76 145

31 614

49 476

151 512

1981

85 444

136 825

31 782

47 345

65 517

33 058

51 709

151 112

1982

76 496

119 136

26 561

42 975

55 118

28 947

47 739

133 164

1983

93 103

128 439

30 219

49 704

75 082

31 976

48 240

146 167

1984

86 544

128 187

32 999

44 585

72 009

34 234

47 534

138 538

1985

104 525

161 762

41 834

35 488

88 730

46 760

57 629

150 490

1986

103 639

189 492

46 552

39 845

97 960

58 803

52 231

170 534

1987

96 347

209 431

52 451

43 233

71 016

80 982

77 782

174 882

(¹) BLEU = Belgo-Luxembourg Economic Union.

Source: Benelux manufacturers + Eurostat.

III. GERMAN MARKET

(9)

The market data for the Federal Republic of Germany can be seen from the following table:

Table 5

Federal Republic of Germany: market data(¹) for welded mesh 1980 to 1987

(in tonnes)

Year

Production

Exports

Home deliveries

(total (1)-(2))

Imports

Market supply

(total (3)+(4))

(1)

(2)

(3)

(4)

(5)

1980

1 374 083

86 919

1 287 164

84 573

1 371 737

1981

1 417 763

112 977

1 304 786

53 510

1 358 296

1982

1 194 200

100 703

1 093 497

51 888

1 145 385

1983

1 409 871

97 323

1 312 548

77 177

1 389 725

1984

1 206 678

101 863

1 104 815

74 745

1 179 560

1985

1 098 687

124 117

974 570

83 503

1 058 073

1986

1 159 451

133 969

1 025 482

99 675

1 125 157

1987

1 195 110

188 439

1 006 671

101 674

1 108 345

(¹) These figures include lattice girders, which account for approximately 10 % of each quantity.

Source: Data of the Fachverband Betonstahlmatten e. V.

IV. ITALIAN MARKET

(10)

The Italian market is strongly export-oriented, as is shown by the following table:

Table 6

Italy: import and export data for welded mesh

(in tonnes)

Year

Imports

Exports

from other

Member States

from non-

Member States

Total

to other

Member States

to non-

Member States

Total

1980

1 371

26

1 397

51 276

39 087

90 363

1981

1 107

31

1 138

36 381

34 558

70 939

1982

1 498

29

1 527

26 261

35 170

61 431

1983

1508

11

1 519

31 621

40 772

72 393

1984

1 894

6 275

8 169

39 056

42 723

81 779

1985

2 070

18 781

20 851

41 740

61 001

102 741

1986

1 717

8 661

10 378

66 790

46 406

113 196

1987

3 139

23 979

27 118

76 452

56 670

133 122

Source: Eurostat, external trade, analytical tables

Note: In Italy a distinction is made between welded mesh with a diameter of 3 mm or more (Nimexe code 73.27-20)

and welded mesh with a diameter of less than 3 mm (Nimexe code 73.27-39). The latter is taken into account to the extent of 80 % in the above table. Precise figures for production and market supply are available in Italy only for welded mesh with a diameter of 3 mm or more; these are given in the following table:

Table 7

Italy: production and market supply, welded mesh

(diameter 3 mm or more)

(in tonnes)

Year

Production

Market supply

1980

255 000

216 655

1981

265 000

238 780

1982

255 000

240 061

1983

250 000

230 032

1984

283 000

235 272

1985

250 000

191 647

Source: Assider.

Note: Assider has no figures for welded mesh with a diameter of less than 3 mm because most producers are not Assider members.

D. The participating undertakings

(11)

The following undertakings participated in one or more of the agreements or concerted practices dealt with here:

1. Tréfilunion SA, Petite-route de Marnaval, F-52102 Saint-Dizier Cedex (´TU');

2. Société Métallurgique de Normandie, 42 rue de la Boétie, F-75008 Paris (´SMN');

3. Tecnor [until 1983 Chiers-Chatillon-Gorcy (´CCG')], La Défense 9, 4 Place de la Pyramide, F-92800 Puteaux (Hauts-de-Seine);

4. Société des treillis et panneaux soudés, La Défense 9, 4 Place de la Pyramide, F-92800 Puteaux (Hauts-de-Saine) (´STPS');

5. Sotralentz SA, 24 rue du Professeur Froehlich, F-67320 Drulingen (´Sotral' or ´Sotralentz');

6. Tréfilarbed Luxembourg-Saarbruecken Sarl (formerly Tréfilarbed SA), 16 a avenue de la Liberté, L-2339 Luxembourg (´TA') and its subsidiaries in France, Belgium and the Netherlands;

7. Tréfileries Fontaine L'Evêque, 1 ruelle aux Loups, B-6140 Fontaine l'Evêque (´TTE');

8. Frère-Bourgeois Commerciale SA, B-6090 Couillet (´FBC');

9. NV Usines Gustave Boël, Afdeling Trébos, B-2991 Tildonk (Haacht) (´Boël/Trébos');

10. Thibo Draad- en Bouwstaalprodukten BV, NL-5740 SX Beek en Donk, Bosscheweg 28 (´Thibodraad');

11. Van Merksteijn Staalbouw BV, Kanaalstraat O Z 8, NL 8102 Raalte (´Van Merksteijn');

12. ZND Bouwstaal BV, J. F. Kennedylaan 22, NL-5555 XD Valkenswaard (´ZND');

13. Baustahlgewebe GmbH, Burggrafenstr. 5, D-4000 Duesseldorf 11 (´BStG');

14. ILRO SpA, Via G. B. Vico 8, I-22053 Lecco-Pescarenico (´ILRO');

15. Ferriere Nord SpA (Pittini), I-33010 Osoppo (Ud), Franzione Rivali (´Ferriere Nord');

16. GB Martinelli fu GB Metallurgica SpA, Via Breda 152, Milano, Italia (´Martinelli').

E. Particulars of the participating undertakings

I. France

(12)

The participant French undertakings are as follows:

1. Undertakings belonging to the former Sacilor group

(a) Tréfilunion (TU)

Until 1 January 1987 Tréfilunion, based in Saint-Dizier, was a wholly owned subsidiary of Sacilor, via Unimetal, with a capital of FF 150 000 000 (Tréfilunion I). Apart from welded steel mesh, TU also made other wire products. TU was the leading French producer of welded steel mesh, with a market share of about 30 % in France (1984). On 1 January 1986 TU's welded mesh business was transferred to ACOR, which likewise belonged to what is now the Usinor-Sacilor group. In the course of the second half of 1987 Tréfilunion was absorbed by Tecnor (see 2 (a) below) with retroactive effect from 1 January of that year. The company which thereby emerged was renamed Tréfilunion (Tréfilunion II). In what follows ´Tréfilunion' and ´TU' refer to Tréfilunion I except where otherwise indicated.

(b) Société Métallurgique de Normandie (SMN)

SMN is likewise a wholly-owned subsidiary of Sacilor (now via Unimétal), based in Paris,

with a capital of FF 100 000 000. Its main activity is the production of wire rod and bars. In 1984 it accounted for about 3 % of the French welded mesh market. SMN has since ceased welded mesh production.

2. Undertakings belonging to the former Usinor group

(a) Chiers-Chatillon-Gorcy (CCG), in 1983 renamed Tecnor

Tecnor was formerly a wholly owned subsidiary of Usinor, based in Puteaux. Its capital amounted to FF 231 121 000. In 1984 its share of the French welded steel mesh market came to about 7,5 %. In the first half of 1987 it halted its welded mesh activities. In the second half of 1987 it absorbed Tréfilunion with retroactive effect from 1 January 1987 and was renamed Tréfilunion (Tréfilunion II, see 1 (a) above).

(b) Société des treillis et panneaux soudés (STPS)

Until 1987 STPS was a wholly owned subsidiary of Usinor (via Usinor Tréfileries), based in Puteaux, with a capital of FF 12 000 000. Since 1987 STPS has been a subsidiary of ACOR (see 1 (a)). In 1984 its share of the French welded steel mesh market came to about 8,8 %.

3. Independent undertakings

Sotralentz (Sotral)

This undertaking, based in Drulingen, has a capital of FF 12 500 000. Its activities included welded mesh production. In 1984 it had about 7 % of the French market.

Sotral is the only French producer of welded mesh which exports to the Federal Republic of Germany.

II. LUXEMBOURG

Tréfilarbed (TA)

(13)

Tréfilarbed SA was until 1 August 1984 responsible for coordinating sales of and sales policy relating to the relevant products in the Arbed group, including that part of the production on the St Ingbert works which was intended for export. Since that date the company has changed its name to Tréfilarbed

Luxembourg/Saarbruecken Sarl. Its market share in 1983 was about 38 % in Belgium and 22 % in the Netherlands. In France its share during the year ended June 1984 was about 7 %.

III. BELGIUM

(14)

The participant Belgian undertakings are as follows:

1. Tréfileries de Fontaine l'Evêque (TFE)

TFE is a company based in Fontaine-L'Évêque with a capital of Bfr 121 000 000. It belongs to the Cockerill-Sambre group, which owns 67 % of the shares. The remaining 33 % are held by the Belgian State and the Société Régionale d'Investissement de Wallonie. Welded mesh is TFE's staple product, accounting for about 75 % of its total output. In 1984 this came to about 25 400 tonnes. In 1983 its market share in Belgium was about 14,5 %.

2. Frère-Bourgeois Commerciale SA (FBC)

FBC is a wholly owned subsidiary of Cockerill-Sambre (on 1 April 1986 it was renamed Steelinter SA). Its activities include selling welded steel mesh made by TFE.

3. NV Usines Gustave Boël, afdeling Trébos, Tildonk (Haacht) (Boël/Trébos)

Boël/Trébos, which is part of the Boël group, produces welded steel mesh. In 1983 it had around 15 % of the Belgian market.

IV. NETHERLANDS

(15)

The participant Dutch undertakings are as follows:

1. Thibo Draad- en Bouwstaalprodukten BV, Beek en Donk (Thibodraad)

This undertaking is a wholly-owned subsidiary of Hoogovens NV. On 1 January 1987 it was divided into two companies, likewise wholly owned by the Hoogovens group, namely: Thibo Draad BV and Thibo Bouwstaal BV. Up to the end of 1985 annual sales of welded steel mesh amounted to some 30 000 tonnes. In 1983 it had about 23,5 % of the Dutch market.

2. Van Merksteijn Staalbouw BV, Raalte (Van Merksteijn)

This undertaking produces about 80 000 tonnes a year (1985 figure). Its market share in the Netherlands is about 50 % and in Belgium 24 % in the field of standard mesh. In addition to its exports to Belgium, it recently started exporting also to the Federal Republic of Germany.

3. ZND Bouwstaal BV, Valkenswaard (ZND)

This undertaking is the third largest Dutch producer of welded steel mesh with an annual output of about 6 000 tonnes. In 1983 its market share in the Netherlands was about 4 %.

V. FEDERAL REPUBLIC OF GERMANY

Baustahlgewebe GmbH, Duesseldorf (BStG)

(16)

BStG is a joint venture owned:

- 34 % by Thyssen Draht AG, Hamm (Westf.) (until 31 December 1985: Thyssen Draht AG):

- 33,5 % by Kloeckner Draht GmbH,

- 25,001 % by Saarstahl Voelklingen GmbH: (since 4 July 1986: before that date this share was held by Arbed Saarstahl and until 1 January 1986 by Arbed) and,

- 7,499 %by Roesler Draht AG, Schwabenthal.

Its capital amounts to DM 20 million. BStG has its own production facilities (Aalen near Stuttgart and Glinde near Hamburg) but it also sells part of the output of the works of the owners Thyssen (Hamm I and Gelsenkirchen), Kloeckner (Hamm II and Kehl) and Roesler (Waldneil) and of the St Ingbert works, which is now under the control of Technoarbed Deutschland.

In addition, BStG sells all the mesh that is delivered from Arbed's Roermond works (NL) to the Federal Republic of Germany, the entire output of Bayerische Stahlmatten GmbH, Neufahrn, in which BStG has a 51 % holding, and the entire output of Baustahlmatten Hochheim GmbH (BStG holding: 49 %).

With annual sales of some 320 000 tonnes, BStG controls by far the largest share (about 36 %) of the German market.

VI. ITALY

(17)

The participant Italian undertakings are as follows:

1. ILRO SpA, Civate (Lecco) (Ilro)

ILRO is the largest Italian exporter of welded steel mesh to France.

2. Ferriere Nord SpA (Pittini), Rivali di Osoppo (Udine) (Ferriere Nord)

Ferriere Nord exports mostly to Germany.

3. Martinelli GB fu GB Metallurgica SpA, Milano (Martinelli)

Martinelli is a relatively small welded mesh producer.

F. Commission investigations

(18)

On 6 and 7 November 1985, Commission officials acting under Article 14 (3) of Regulation No 17 carried out simultaneous investigations without prior warning at the premises of seven undertakings and two associations, viz: TU, Sotralentz, TA, Ferriere Nord, BStG, Thibodraad, NV Bekaert, Syndicat national du tréfilage d'acier (STA) (4) and Fachverband Betonstahlmatten eV (5).

(19)

On 4 and 5 December 1985, Commission officials acting under Article 14 (2) of Regulation No 17 conducted further investigations at the premises of ILRO, Martinelli, Boël/Trébos, TFE, FBC, Van Merksteijn and ZND.

(20)

In all these investigations certain documents were secured which, together with further information which the Commission obtained under Article 11 of Regulation No 17, constitute the evidence on which this Decision is based.

G. Further procedure

(21)

On 12 March 1987 the undertakings concerned were sent a Statement of Objections. The undertakings made known their views on the objections it contained.

On 23 and 24 November 1987 a hearing took place attended by representatives of the undertakings and associations concerned.

H. Summary of the restrictions of competition considered

(22)

The restrictions of competition considered below derive from a set of agreements or concerted practices (hereinafter referred to as ´agreements') fixing prices and delivery quotas and sharing markets for welded steel mesh. Particular agreements essentially concerned just one part of the common market (the French, Benelux or German market as the case may be); but there was always an effect on cross-border trade, especially because almost all those operating on the relevant market, including importers, were parties.

There was no general agreement between all manufacturers in all the Member States concerned, but rather a complex of different agreements, the parties to which were not always the same.

Nevertheless, as a result of the regulation of the individual sub-markets this complex of agreements had the effect of producing far-reaching regulation of a substantial part of the common market.

J. The restrictions of competition in detail

I. French market

1. The first set of agreements in 1981/82 between French producers and producers from Italy, the Federal Republic of Germany and Belgium who traditionally exported to France

(23)

The first set of agreements, between French producers and producers from Italy, Germany and Belgium who exported welded mesh to France, came into being in 1981 and 1982. These agreements covered both prices and market shares; they lasted from April 1981 to March 1982.

The parties to these agreements, in addition to the French producers, were the Italian undertakings ILRO, Ferriere Nord and Martinelli; the Belgian undertakings Boël/Trébos, TFE and FBC, which markets TFE's products, and the German-Benelux undertaking TA. The following paragraphs set out the evidence for the existence of these agreements (24 to 29) and for the participation of Italian, German and Belgian producers (31 to 50).

(a) The 1981/82 agreements in detail

(24)

Mr Duroux, Sales Director of TU's Structural Steels Division, in a memorandum dated 1 December 1981, reported in relation to the year 1981:

´Tréfilunion succeeded in damming-up the flow of imports by preparing and securing acceptance of a barrage in the form of an agreement among the producers including the significant foreigners. There followed an artificial situation in which prices became relatively high on our market in 1981 and import tonnages were broadly maintained at their 1980 level.'

(25)

This agreement enabled prices to rise spectacularly. In April 1981 they stood at about FF 1 900 per tonne. By

the end of 1981, they had reached FF 3 000 per tonne, a level much higher than in other Community producing countries, e.g. the equivalent of FF 2 243 per tonne in Germany, FF 2 444 per tonne in Italy, FF 2 220 per tonne in Belgium and FF 2 264 per tonne in the Netherlands. These figures were obtained from the abovementioned memorandum of 1 December 1981.

(26)

The share of the French market accounted for by imports rose from 21 % in January 1981 to 30 % in July/August 1981, but remained stable during the last four months of the year (29 %, 29 %, 32 % and 29 %).

(27)

The memorandum referred to above indicates that the agreement was concerned not only with prices but also with market shares and that the allocation of those shares to the participants depended to a large extent on their past performance. Thus the memorandum states:

´In the discussions between producers from different countries dealing with the market shares to be granted, the arguments of those who have gained access profiting from the positions they have acquired are obviously very strong.

The example offered in France, in the context of the recent agreement, shows the importance of these previously acquired positions. It should be noted that the object of these discussions was not to fix bilateral quotas, but simply to "cash in'' on a de facto situation created from outside.'

The same memorandum recognizes that security in relation to prices is bound up with self-limitation on tonnages:

´The secure maintenance of the agreement on prices means for the French producers at least self-limitation of their tonnages on their own market at the present level.'

(28)

In the same vein the memorandum, referring to TU's exports to Belgium and Holland, remarks:

´Finally it should be noted that it is in our interests to ensure acceptance of our position in these countries with a view to the talks which will not fail to be set in motion for the improvement of selling prices, which has clearly become a necessity for the Belgian and Dutch producers.'

(29)

The 1981 agreement ran from April 1981 to March 1982. The quotas allocated to the French producers are known to the Commission from a document sent with a covering letter dated 1 October 1982 found at TU. The document contains the following tables:

Deliveries of welded steel mesh, smooth and ribbed, in France Undertakings

1978

1979

1980

1981

Averages

1978-1981

Quotes

tonnes

%

tonnes

%

tonnes

%

tonnes

%

tonnes

%

(¹)

CCG + MD

26 526

13,27

25 939

14,44

27 173

12,90

26 535

13,03

26 543

13,37

13,84

13,40

Gantois

1 355

0,68

1 274

0,71

976

0,46

1 587

0,78

1 298

0,65

1,03

1,00

FFM

9 692

4,85

7 869

4,38

7 970

3,78

7 559

3,71

8 273

4,17

3,72

3,60

SMN

12 249

6,13

11 190

6,23

12 121

5,75

11 852

5,82

11 853

5,97

5,99

5,80

Sotralentz

20 458

10,23

17 273

9,61

20 446

9,70

20 742

10,19

19 730

9,94

10,02

9,70

STPS

21 355

10,68

21 565

12,00

30 456

14,46

24 308

11,94

24 421

12,30

12,91

12,50

TSE

8 520

4,26

9 029

5,03

9 485

4,50

9 786

4,81

9 205

4,64

4,03

3,90

TU

92 770

46,39

77 212

42,97

92 602

43,95

90 116

44,25

88 175

44,42

44,10

42,70

Tecta

7 039

3,52

8 324

4,63

9 450

4,49

11 149

5,47

8 990

4,53

4,36

100,00

92,60

Total

French producers

199 964

100,00

179 675

100,00

210 679

100,00

203 634

100,00

198 488

100,00

Estimate of imports

53 200

21,03

67 600

27,37

67 500

24,28

75 200

26,95

65 900

24,96

Total market approx.

253 000

247 000

278 000

279 000

264 000

(¹) + Tecta - Arbed.

Source: First half of 1982: French plants = 113 000

Source: First half of 1982:

French plants =

70 650

Imports =

42 350

113 000

tonnes = 37,50 %.

As can be seen from minutes dated 23 March 1982 discovered at TU, a TU executive committee meeting agreed that TU would ´continue to the end in carrying out the current agreement which expires on 31 March'.

(30)

The evidence of the involvement of Italian, German and Belgian producers in the 1981 agreement is set out below.

(b) Italian involvement in the 1981/82 French market agreement

(31)

As early as October 1980 Italian producers were involved in concerted practices with French producers on the French market. Thus a telex dated 15 October 1980 from Italmet, the agent for France of Ferriere Nord and Martinelli, to Martinelli states:

´We inform you that the participants at the meeting on welded mesh held in Paris on 9 October have unanimously accepted the conditions agreed during the Milan meeting of 3 October, which will be applied in the following manner . . .'.

In the same telex mention is made of the discounts on list prices to be granted in different parts of France. It is stated that the French producers will apply a

discount smaller by FF 50 to 60 per tonne, thus allowing the Italians a certain margin of penetration.

(32)

On 17 March 1981 Italmet sent a telex to Martinelli (which was found at Martinelli) announcing that the French producers had ´taken the initiative in calling a meeting of all producers (not only Tréfilunion but every French maker) with a view to studying the possibility of improving current market conditions.' The two main items on the agenda for the meeting were the adoption of a true price list (´listino verità') and the allocation of penetration quotas (´the main exporters to France are the Italians and Belgians, German penetration is almost negligible'). It is clear from the context that this last remark excludes Arbed, which accounted for 20 000 out of the 24 000 tonnes imported into France from Germany in 1980.

The telex also stated that TU, Usinor (the parent company of CCG and STPS), the Italians and the Belgians would attend the meeting, which was to be chaired by Mr Charbaut of STA. The telex added that ILRO had already agreed to take part. In another telex found at Martinelli dated 25 March 1981, Martinelli

informed Italmet that it would attend the meeting, which was scheduled for 1 April 1981 in Paris.

(33)

The meeting duly took place and a telex dated 9 April 1981 from Italmet to Martinelli (found at Martinelli) set out the agreed list prices and the discounts and penetration rebates agreed for the Italians. These terms were to apply to orders confirmed between 13 April and 15 May for delivery up to 29 May 1981. On the subject of quotas, the telex states: ´Stays fixed at 32 000 to 33 000 tonnes for Italy; our quota being, however, 8 000 tonnes to be divided between you (i.e. Martinelli) and Ferriere Nord.' The telex gives an example of how to make a price quotation for standard mesh, code No 88, as follows: FF 2 400 per tonne, less temporary rebates, 250 FF per tonne less penetration rebate, FF 50 = effective price carriage paid, not cleared through customs.

(34)

A memorandum dated 9 April 1981 by Mr Marie, Director of TU's Welded Mesh Division and President of ADETS from 1983, found at Ferriere Nord and Martinelli, sets out the main points agreed at the meeting of 1 April:

´We have noted your agreement on the following points:

iiv(i) Deliveries by your company to the French market during the period 1 April 1981 to 31 March 1982 will be 4 000 tonnes maximum . . .

iv(ii) These deliveries must take place as far as possible at regular intervals.

v(iii) Monthly declarations of tonnages . . .

ii(iv) Correction of excesses and shortfalls: differences recorded and brought to your notice between the tonnages agreed and your actual deliveries will be reabsorbed within two months of the recording of such differences.

iii(v) Prices charged: these must be those of the price lists in force, which will be communicated to you in due course . . .

ii(vi) Information: the French producers will take care to inform you regularly of the state of the market, price movements, etc. . . . (records, forecasts).

i(vii) Undertaking: you undertake not to depart from these agreements.

(viii) Italian market: in the event of an agreement being reached on welded mesh in the Italian market, the French producers undertake,

after negotiation, to respect its operative clauses.

ii(ix) The French producers give you the opportunity of applying a so-called penetration margin with a maximum of:

- FF 40 per tonne on sales invoiced carriage paid, cleared through customs;

- FF 50 per tonne on sales invoiced carriage paid, not cleared through customs.'

(35)

The Italian producers who participated in the French market agreement of 1981/82 were ILRO, Ferriere Nord and Martinelli. As can be seen from the abovementioned telex and memorandum and from a Tréfilunion table headed ´Imports of welded mesh from Italy', found at Ferriere Nord, the quotas for the 12-month period were: ILRO 24 000 to 25 000 tonnes, Ferriere Nord 4 000 tonnes and Martinelli 4 000 tonnes.

(36)

It should be noted that, whereas Italian exports to France had been 37 000 tonnes in 1979 and 37 500 tonnes in 1980, the agreement was designed to secure a reduction to 32 000 to 33 000 tonnes in the 12 months from April 1981 to March 1982. Apparent consumption in France had been 279 000 tonnes in 1980, but at the time of the April 1981 meeting was not expected to be more than 240 000 to 250 000 tonnes in 1981. On 4 May 1981, Mr Cattapan, Sales Director of Ferriere Nord, sent Mr François of Italmet, who had asked for comments on Mr Marie's memorandum, a letter in which he stated: ´Re points 1-2 of Mr Marie's memorandum, deliveries will be within the limits indicated by you if the market remains within the limits discussed'.

(37)

It would appear that for several months the agreement between the French and Italian producers worked smoothly. Thus a Ferriere Nord note on a meeting of 20 October 1981 attended by TU, ILRO, Ferriere Nord, Martinelli and Italmet reports:

´The results of the March agreement (from 1. 4. 81) are satisfactory on the whole and have caused the price quotations to rise both for the French and for the Italians'.

(38)

On 18 February 1982 a meeting took place in Paris between TU, ILRO, Martinelli, Italmet and Ferriere Nord. Mr Marie (TU) stated that an analysis of market trends showed that

´the agreement made at the beginning of 1981 has yielded the results hoped for in terms of quantity and price'.

This is reported in a note (found at Ferriere Nord) by the representative of Ferriere Nord, who writes:

´In 1981 the French market reached approximately 275 000 tonnes instead of the expected 253 000 tonnes. This should mean an improvement for the Italians as well, an improvement which will be discussed at the next meeting at the end of June.'

(39)

However, there were signs that relations between the parties to the agreement were becoming strained. Statistics for the first nine months of the agreement showed ILRO to be slightly above its quota and Ferriere Nord and Martinelli comfortably below their quotas according to the producers' voluntary returns. Customs statistics suggested, however, that exports from Italy to France had been considerably above the overall quota limit. This is apparent from TU statistical tables found at Ferriere Nord.

(40)

A telex (found at Ferriere Nord) dated 15 March 1982 from Mr Castelnuovo of Boël, Belgium, to Mr Pittini of Ferriere Nord states:

´Mr Montanelli of ILRO is selling in France, through a company in Briançon, fairly large quantities of mesh at prices well below those agreed in the context of the Franco-Belgian-Italian agreement of early 1981'.

(41)

The Italians in turn were concerned in March 1982 about prices that were being charged by the ´integrated' French producers, i.e. in particular, TU, SMN, CCG and STPS. At a meeting in Italy on 8 March 1982 between Mr Marie (TU), Mr Cattapan (Ferriere Nord) and Messrs Montanelli, Locatelli and Tedeschi (ILRO), Mr Marie explained that the French integrated producers had applied a temporary rebate of FF 325 during the month of March. According to a telex dated 9 March 1982 from Mr François of Italmet to Mr Cattapan:

´Mr Marie stressed that this was a temporary measure, of limited duration only, and that the French producers were not bound to ask the permission of their Italian, Belgian and German partners to revise their list but only to inform them of the decision taken'.

The telex continues with a reference to Mr Montanelli, who:

´stood by the fairly strong wording of the telex he sent Marie some days ago, i.e. his intention to leave the Club and apply rebates of 600 to 700 francs, etc.'

´So we are at war . . .', states Mr François.

(42)

Attempts were made to resolve the differences between the parties in discussions involving Mr

Marie, Mr Boël (´for mesh on the French market'), Mr Charbaut (STA), Mr Cattapan (Ferriere Nord), Mr Montanelli (ILRO) and Mr Martinelli (Martinelli), as can be seen from Mr Cattapan's note of a meeting held in Brussels on 6 April 1982 and from Mr Cattapan's telex to Italment (Mr François) of 20 April 1982. Mr Cattapan informed Mr Marie in a telex dated 19 April 1982 of the Italian interpretation of the agreed measures. This interpretation included a continuation of the Franco-Italian agreement for a further three months, from April to June 1982, under certain conditions concerning prices and quotas. The telex of 19 April states as follows:

´. . .

(c) Given the common determination to try to improve a sector already under pressure owing to weakness of demand, the Italian producers agree to the proposal that a reduction of FF 325 on the list price plus a small so-called penetration rebate be applied. The maximum quantities which the Italian producers undertake to export to France during the months of April, May and June amount to a total of 7 200 tonnes i.e. three times 1 800 + 300 + 300, on the express condition that the above estimates prove correct and that the situation evolves normally.

. . .

I think it is true to say that our common purpose and common ambitions have been achieved.

Consequently, as they are in keeping with our agreements, the decisions reached will be applied as from today.'

In a telex from Mr Marie to Mr Cattapan dated 23 April 1982, this interpretation is accepted by Mr Marie with certain additions designed to introduce safeguards on behalf of French producers, with the possible exception of Sotral whose definitive position was not yet known. A copy of the telex was sent to ILRO on 26 April 1982.

(43)

Ferriere Nord and Martinelli proceeded to give immediate effect to the extended agreement and on 20 April 1982 their agent Italmet reported to them by telex that it had sent the following telex to French customers:

´We are pleased to inform you that from today we are in a position to book orders for deliveries April/May/June on the following terms:

1-3. Tréfilunion list price (including allowances provided for in the list) less FF 385 delivered, not cleared through customs on the French side (FF 385 = FF 325 discount + FF 60 penetration rebate as agreed between the Italians and the French).

4.

We are unable to sell more than 600 tonnes per month (300 tonnes Martinelli/300 tonnes Ferriere Nord) up to the end of June 1982.

5.

For logistical reasons we cannot consider mixed loads Martinelli/Ferriere Nord. Any orders from you should take account of this.

6.

After being out of action for two months, a step we took to avoid aggravating an already tense situation, we sincerely hope you will be able to entrust to us those tonnages you need in order to sustain the welded mesh market.'

(Mr Cattapan (Ferriere Nord) wrote ´OK' on his copy of the telex.)

(44)

The evidence suggests that Ferriere Nord and Martinelli did their best to keep to the 1981/82 agreement and supported its extension. It also appears, however, that ILRD did not always abide by the 1982/83 agreement, and the Commission has no documentary evidence in its possession that would prove that that company agreed to the extension.

(45)

As for the French producers themselves, they agreed at a meeting on 21 April 1982, at which they, together with TA, were all present (except Sotral), that they would apply a maximum discount of FF 325 per tonne for all new orders deliverable in May, reduced to FF 275 per tonne in June (source: note of 23 April 1982 by Mr Knap of TA France reporting on this meeting to Mr Schurr, TA Luxembourg).

(c) German involvement in the 1981/82 French market agreement

(46)

The German involvement in the French market agreement of 1981/82 was essentially that of TA, which accounted for 85 % of German exports to France. TA had a quota under the agreement, about which information is available from a TU note dated 23 October 1981 concerning a meeting between TU and TA on 20 October 1981. At that meeting

´TU stated that TA had to deliver monthly about 500 tonnes to Woippy and Strasbourg (two warehouses belonging to Davum), which would leave it some 800 tonnes for other customers'.

This means that the TA quota was 1 300 tonnes a month or 15 600 tonnes a year. This corresponds to a share of 7,4 %, taking as a basis total deliveries by French producers in 1980, i.e. excluding other imports. (This percentage is confirmed by the document dated 1 October 1982 referred to at point 29 above). At the same meeting TA:

´Complained about what, in its view, was the excessive share given to the Italians and Belgians in the latest arrangements, which also favoured TU and CCG. TA considered, moreover, that it had always been treated as a poor relation in our (i.e. the French) market, where it had been one of the leading suppliers'.

(d) Belgian involvement in the 1981/82 French market agreement

(47)

The Belgian producers involved in the 1981/82 agreement were mainly Frère-Bourgeois/Fontaine-

L'Evêque (FBC/TFE) and Boël/Trebos. There was, however, also a TA interest through its Belgian producing subsidiary Tréfilarbed Bouwstaal NV, Ghent (´TA Ghent').

(48)

As regards FBC/TFE, it is known from the TU note of 23 October 1981, referred to at point 46 above, that the FBC/TFE quota was 4 000 tonnes a year.

´As for the recent agreement, TA claimed for Frère-Bourgeois a tonnage of 2 000 tonnes per month, whereas in fact it was 4 000 tonnes per year, as shown by written proof furnished to TA by Mr Marie. In reality, Frère-Bourgeois had only delivered 58 tonnes since April'.

(49)

As regards Usines Gustave Boël and its Trébos works (Boël/Trébos), a manuscript note of a meeting held in Paris on 1 April 1981 states:

´On Friday 3 April (the French) will have a meeting with Jacques Boël + Charleroi' (i.e. Boël + Frère Bourgeois).

The note also states that the volumes proposed for the Belgians ´already negotiated' were 8 000 tonnes. Since the FBC/TFE quota is known to have been 4 000 tonnes, the Boël/Trébos quota must also have been 4 000 tonnes.

(50)

As already mentioned in 40, in a telex dated 15 March 1982 Mr Daniele Castelnuovo of Boël complained to Mr Pittini of Ferriere Nord that ILRO was selling mesh in France at prices well below those agreed in the Franco-Belgian-Italian agreement of early 1981. The telex states that Mr Jacques Boël thanks Mr Pittini in advance for taking action, while the writer joins Mr Boël in expressing his gratitude to Mr Pittini for

´preserving the market from blows'. Mr Boël himself took part in discussions with French and Italian producers' representatives in Brussels in April 1982 in an attempt to bring ILRO back into the fold (source: Mr Cattapan's note of Brussels meeting held on 6 April 1982 and Mr Cattapan's telex of 20 April 1982 to Mr François of Italmet, referred to in 42. The Boël group was interested in this matter both as a Belgian producer and as a producer in France through its subsidiary Fabrique de Fer de Maubeuge).

2. The set of agreements in 1983/84 between French producers and producers from Italy, the Federal Republic of Germany and Belgium

(51)

The second set of agreements mainly concerned quotas; these agreements were concluded by the integrated French manufacturers (TU and SMN (Sacilor Group) and CCG and STPS (Usinor Group), the non-integrated French manufacturers including Sotralentz, and the other foreign undertakings operating on the French market, from Belgium (TFE/FBC, Boël/Trébos and TA), Italy (Ferriere Nord, ILRO and Martinelli), and Germany and Benelux (TA). The results of the negotiations which took place were set out comprehensively in a ´protocole d'accord' at the beginning of October 1983.

Alongside these quota arrangements there were also various price agreements between the same manufacturers.

The following paragraphs describe the agreements in detail.

(a) Preparing the ground

(52)

In the second half of 1982 the agreements to protect the French market did not appear to be working well for most participants, the main reason being that certain companies, in particular ILRO, and probably Sotralentz, were no longer cooperating. In early 1983, however, efforts were made to re-establish the agreed restrictions on the French market. Thus, on 4 January 1983, Mr Charbaut of STA met Mr Montanelli of ILRO and the latter's agent, Mr Barouch of SOVEP. Mr Montanelli was asked whether he would be writing to conclude an agreement limiting penetration into the French market. He replied that he ´wished to conclude a new agreement and stated he would enter into commitments on behalf of ILRO and Pittini . . . The problem of Martinelli would remain to be solved, but this could be the subject of a separate agreement

if Mr Montanelli was unable to intervene' (source: note of ´welded mesh meeting' held at Hotel Michelangelo, Milan, on 4 January 1983).

(53)

At a further meeting between the ´French integrated producers and some Italian producers interested in the French market' (including Mr Haller, Managing Director of CCG, Mr Marie of TU and Mr Montanelli, Mr Martinelli and Mr Cattapan, of ILRO, Martinelli and Ferriere Nord respectively) held on 23 February 1983 (source: notes by Mr Cattapan found at Ferriere Nord) French consumption for 1983 was estimated at about 225 000 tonnes. The French integrated producers claimed 61 % of this and were not prepared to discuss this level. It was agreed at the meeting that the remaining 39 % should be distributed as follows:

´19 % (non-integrated) French producers;

´ 3 % Belgium;

´ 7 % Germany;

´10 % Italy, corresponding to some 23 000 tonnes per year. This figure will need to be divided among ILRO, Martinelli and Ferriere Nord and will have to be agreed precisely . . .'

´At the same time a recovery of FF 200 to 300 per tonne is envisaged from April 1983. Our quota (i.e. that of Ferriere Nord) will not exceed 2 500 tonnes for 1983 if the market remains at the size mentioned . . . A further FF 300 rise is expected arround July'.

(54)

A note by Mr Haller (CCG) confirms the above quotas:

´Agreement was reached on a penetration rate of 10 % for the Italians, but the Italians requested a rapid rise in prices. Mr Marie said that we had to secure the agreement of Arbed to 7 %, of the Belgians to 3 % and of the other French to 19 % . . . Absolute discretion about these conversations was requested both vis-à-vis the representatives in France of the Italian companies and vis-à-vis other importing companies or French suppliers.'

Mr Stabiumi, representing the Industrie Siderurgiche Associate (ISA) was also at the meeting as ´guarantor of the agreement' on behalf of the whole Italian welded mesh sector.

(55)

After the above meeting, negotiations proceeded between the various interested parties and by 24 May 1983 the handling of the affair had risen to a senior level in Sacilor, TU's parent company. On that day Mr Choppin de Janvry, Directeur Stratégique et Affaires

Internationales of Sacilor, sent a telex to Mr F. Buck of Tradearbed (like TA, an Arbed subsidiary). This telex stated inter alia:

´Following the meeting TU (Mr Marie)/CCG (Mr Haller)/Arbed (Mr Schuerr . . .) of 7 March 1983 in Luxembourg and the meeting TU/Arbed of 28 March 1983. The prospects of the price rise currently depend on Arbed's agreeing to the quotas which we (the French sector) propose to them. We recall that the Italians for their part have agreed to reduce their deliveries to 10 % of French consumption and that the agreement of the Belgians is virtually secured. The integrated French producers claim for their part 61 % of consumption, a figure presented as non-negotiable. This figure has been accepted by the whole French sector.'

The telex goes on to refer to difficulties which have arisen between the French producers and TA regarding the appropriate level of the quota for TA. Mr Buck replied on 25 May 1983 with a telex to Mr Choppin de Janvry, explaining the Arbed/TA point of view and making a ´final conciliatory gesture' in relation to TA's quota. This was followed by a ´compromise proposal' from the French producers, the terms of which are set out in a telex dated 14 June 1983, found at TU, conveying to Mr Marie the text of a telex dated 13 June 1983 to Mr Buck from Mr Jacques Michel, Deputy Managing Director of Usinor, CCG's parent company. The terms of the proposal, which related to ´Arbed's share of deliveries of welded mesh on the French market' and was aimed at ´facilitating the speedy conclusion of a welded mesh agreement on this market, an agreement which has already received the assent of the other parties concerned', are as follows:

´- right to supply 6,3 % of the market from Arbed's Luxembourg works (this is a mistake for ´German' works, Arbed having no works making welded mesh in Luxembourg),

´- right to supply 0,75 % of the market from Arbed's Belgian works, as already agreed,

´- full integration of tailor-made mesh to ensure complete clarity in the returns,

´- in exchange, the granting to the Arbed group of a right to 0,5 % (bringing 6,3 % up to 6,8 %) to take account of such integration.'

This offer was accepted, as is evidenced by a telex from Mr Albert of CCG to Mr Marie dated 22 June

1983 quoting the text of a telex from Mr Buck to Mr Michel:

´Following receipt of your telex of 13 June, I have attended to the matter personally and am pleased to inform you that we agree for a period of a year and a half to a right to supply 7,55 % from Arbed works, tailor-made mesh being included in the percentage. This means, therefore, that we have accepted your compromise proposal and I hope thus to have given satisfaction; I hope our collaboration will now lead to a rapid improvement in prices.'

(NB: 7,55 % = 6,3 % + 0,5 % + 0,75 %).

(56)

This wish in fact came true: the temporary rebate on the TU basic price of FF 3 075 per tonne was FF 700 per tonne in June 1983, in July it was FF 650 per tonne; in August FF 600 per tonne; in September FF 400 per tonne and in October FF 275 per tonne, followed by a rise in the basic price of FF 125 per tonne to FF 3 200 per tonne on 1 November 1983, with the rebate remaining at FF 275 per tonne. On 1 January 1984 the basic price was raised by a further FF 80 per tonne while the temporary rebate remained unchanged at FF 275 per tonne at least until October 1984. The total rise in the price was FF 630 per tonne between June 1983 and January 1984, or 26 %.

(57)

The acutal operation of the agreement by Martinelli during July/August/September 1983 is shown by the following telex sent by Martinelli to Italmet on 14 July 1983:

´We can authorize you to sell 3 to 4 trailer loads of standard mesh for delivery by our lorry to locations near the frontier on the terms of FF 400 rebate on the Tréfilunion list prices, for delivery in the second half of September, unless, that is, you have sold the remainder of the production quota.'

(58)

On 3 November 1983 Mr Duroux (TU) sent to Mr François of Italment (representing Ferriere Nord and Martinelli) a ´green sheet' (feuille verte) showing the basic prices of FF 3 200 and FF 3 290 and the temporary maximum rebate of FF 275 per tonne applicable to orders for delivery in December 1983.

(59)

On 4 November 1983 Mr Knap of TA France complained to Mr Schuerr (TA) in a note found at TU that the TA forecasts for sales in France in 1984 could have been 27 000 tonnes of welded mesh, or 11,75 % of a market estimated at 230 000 tonnes, whereas the quota of 7,55 % would restrict TA sales to 17 350 tonnes. He adds ´it is not very clear to us how we are going to be able to apportion the 17 350 tonnes of

welded mesh to complete the tables attached to your note'. This shows that TA was being prevented by the agreement from delivering to France the full quantity which it could otherwise have delivered.

(b) The ´protocole d'accord', October 1983

(60)

On 4 October 1983 the so-called ´protocole d'accord' came into being. In it are set out comprehensively the results of various negotiations, in particular those between:

(a) the French producers themselves, including their associations Adets and STA (6) (source: manuscript note on the meeting of 28 September 1983 at which the allocation of quotas between French producers and Arbed was discussed and which was attended by representatives of TU, Adets and STA),

(b) French producers and Arbed (see 55), and

(c) the French, Italian (see 52 to 54) and Belgian producers (except Arbed-Ghent). The Belgian involvement is apparent from the ´protocole d'accord' itself.

(61)

The ´protocole d'accord' contains the following main provisions:

ii(i) the parties undertake to ´apply strictly the price directives defined by the Secretariat (STA) for each month of deliveries'; the Secretariat is also charged with the management of the market-sharing part of the agreement, including the issue of monthly delivery programmes;

i(ii) the share of imports from Belgium, Italy and Germany (apart from those of Tréfilarbed) is fixed at 13,95 % of consumption on the French market ´within the framework of an agreement between those producers and French producers';

(iii) the remaining 86,05 % of deliveries on the French market is divided among ´the undersigned producers (who) have decided to respect between themselves the following delivery shares':

(in %)

(iii)

- integrated works

60,50

of which Sacilor group

(TU and SMN)

40,50

Usinor group

(CCG and STPS)

20,00

- other French works including Sotralentz (7,60)

18,00

- TA/Arbed

7,55

of which St. Ingbert

6,80

Ghent

0,75

86,05

(iv)

penalties are payable for deliveries in excess of quota;

(v)

the duration of the protocole d'accord is from

1 July 1983 to 31 December 1984, ´with renewal possible for 1985 in the light of consultations beginning September 1984'.

(62)

The allocation to TA's German works at St. Ingbert was 6,8 % of the market, as already indicated. There was no other quota for German works. Of the 13,95 % allocated to Italy and Belgium, 10 % was the Italian share and 3,95 % was the Belgian share (excluding TA's Ghent works). The 10 % for Italy was not subdivided by the French producers as between Ferriere Nord, ILRO and Martinelli, who were left to arrange their own subdivision. ILRO was, however, given a ´theoretical right' to 9 % in calculations dated 10 August 1984 used in preparing the TU budget for 1985 and 1986. Belgium's 3,95 % was divided among Boël/Trébos and FBC/TFE, which had 2,86 % and 1,09 % respectively. This is evidenced by documents found at TU recording monthly and cumulative comparisons between quotas and actual deliveries.

(63)

The abovementioned documents also indicate that the penalty for excess deliveries was FF 150 per tonne.

(c) The operation of the 1983/84 agreements

(64)

Several documents with statistics for individual undertakings show not only that the ´protocole d'accord' functioned, but how it functioned. Some of these statistics are headed Adets. From these it appears that Adets played a coordinating role by regularly collecting and distributing statistical data to its members showing each month their individual deliveries and market share, which enabled the operation of the agreement to be monitored.

(65)

The same documents also show that the agreement worked effectively, at least during the first nine

months of its existence, i.e. from July 1983 to

March 1984. At the end of March 1984 the cumulative figures compared with the quotas were as follows:

Welded mesh deliveries on the French market July 1983 to March 1984 Undertakings

Tonnes

delivered

Percentage share

Quota

Actual

Usinor group

29 815

20,00

19,56

(of which CCG)

(14 422)

(10,35)

(9,46)

(STPS)

(15 393)

(9,65)

(10,10)

Sacilor group

61 995

40,50

40,67

(of which TU)

(54 933)

(35,80)

(36,04)

(SMN)

(7 062)

(4,70)

(4,63)

French integrated works

91 810

60,50

60,24

French independent works

26 761

18,00

17,56

(of which Sotral)

(11 927)

(7,60)

(7,83)

TA/Arbed

11 746

7,55

7,71

Italians (Ferriere Nord,

ILRO Martinelli)

16 243

10,00

10,66

Belgians (Boël,

Frère-Bourgeois)

5 840

3,95

3,85

Total contracting

parties

(152 400)

100,00

100,00

It will be noticed that only the Italians delivered appreciably in excess of their quota. It will be noted also that the quota shares are expressed as percentages of total deliveries by the contracting parties to the French market. This does not allow for deliveries by parties outside the agreements, but such deliveries (coming mainly from Germany and Italy) represented only 8 % of the total French market during the seven months September 1983 to March 1984.

(66)

The Italian excess of deliveries appears to have been due to one producer, namely ILRO. Mr Marie first expressed concern about this in a telex dated 15 March 1984 to Mr Cattapan of Ferriere Nord. He states:

´You will remember that the Italian share in relation to French consumption has been agreed to by both sides at 10 %. The report of performances over the last months shows a slight excess of 0,6 % which can easily be corrected, this performance being essentially attributable to one of the Italian partners . . . It is indispensable that the three Italian partners should establish a clear policy which enables the sum of Italian sales not to exceed the 10 % provided for, agreed and accepted in our discussions last July. Meanwhile I should be grateful if you would refrain from making any quotations'.

(67)

On 13 April 1984 Mr Marie sent a further telex to Mr Cattapan on behalf of the French producers inviting him to a meeting of Belgian, French and Italian producers together with Arbed. The invitees included Boël, Frère-Bourgeois, ILRO, Martinelli, Ferriere Nord, Arbed, CCG, STPS, Sotral, TU and SMN and the meeting was held on 15 May 1984 in Paris. Two of the items on the agenda for the meeting were ´the drawing up of a timetable for price rises with amounts to be established' and ´interpenetration of markets'.

(68)

It appears from Mr Cattapan's note of the meeting that:

1. ´in the last four months of 1983 the quotas agreed were fairly well respected. First three months of 1984, anomalies';

2. there are ´discounts' in ´Belgium and Holland - agreements have not been observed';

3. there is ´the grave matter as far as Italy is concerned of the 10 % accounted for by a single producer'.

(69)

The delivery figures reported in documents found at TU show that ILRO was not in practice observing the agreement as from January 1984. This can be seen from the following table:

Italian deliveries to France as reported Month

ILRO or its agent

Sovep

Italmet for Ferriere Nord

and Martinelli

total

Italy

tonnes

share (%)

tonnes

share (%)

tonnes (%)

January 1984

1 629

11,14

59

0,41

11,55

February 1984

1 044

8,03

228

1,75

9,78

March 1984

1 850

10,81

0

0,00

10,81

April 1984

not known

not known

not known

May 1984

2 071

12,81

125

0,78

13,59

June 1984

1 932

12,22

145

0,92

13,14

(70)

The statistics of ILRO deliveries to France in the months concerned are consistently higher than the above-reported figures, although they confirm that in February 1984 ILRO was temporarily back within the limits of the agreement. It can be assumed from the wording 3 of Mr Cattapan's note of the meeting of 15 May 1984 (see 68) and the absence of further comment on that point that ILRO was not represented at that meeting. The Commission takes it that ILRO was no longer a cooperating member of the agreement from May 1984 onwards.

(71)

A TU memorandum of 19 September 1984 entitled ´Current state of the welded mesh market in France' contains, among other things, a progress report on the agreements. It states:

´The very substantial increase in the selling price of welded mesh in the course of 1983 (more than FF 1 000 per tonne) resulted at the end of the year in

a ´´maximum permissible'' level having regard particularly to prices on neighbouring markets: BLEU, Federal Republic of Germany, Switzerland, Italy and Spain. Despite the weakness of sales volumes and a fairly strong thrust by two importers in the first half of 1984, prices continued to improve after the end of 1983 during the first quarter of 1984 . . . This is the direct result of a new awareness on the part of European producers operating on the French market, with two

exceptions: ILRO (Italy) and Horath (Germany) (a company outside the agreement) . . . In view of the differences in prices charged, this currently gives cause for a great deal of concern and is certainly harmful as it is likely to undermine the state of awareness referred to, which is next due to run out at the end of 1984. In just a few weeks' time, talks will have to be entered into which will have a direct bearing on the shape of our plans for 1985 and 1986. Our most ambitious and demanding partner will be Arbed.'

(72)

On 30 October 1984, Mr Marie stated in an internal TU memorandum that:

´The results of the plans for 1985 and 1986 are dependent on two fundamental factors, namely:

- our investments in wire-drawing and welding,

- negotiations for 1985 and, if possible, for 1986, which I must conduct on the same basis as those which have been applied since September 1983 and which expire at the end of December 1984'.

(73)

Meanwhile, it would appear that by May/June 1984 the Belgian companies were beginning to exceed their combined quotas. The following picture emerges from the statistics:

Producer

Quota

May 1984

June 1984

July 1983 to June 1984

combined total

tonnes

share (%)

tonnes

share (%)

tonnes

share (%)

1. Boël/Trébos

2,86

549

3,40

449

2,84

2. FBC/TFE

1,09

297

1,84

472

2,99

Total 1 + 2

3,95

846

5,23

921

5,83

8 324

4,16

Total

contracting parties

100,00

16 161

100,00

15 801

100,00

200 333

100,00

(74)

In 1984 as a whole, total imports into France from Belgium/Luxembourg, i. e. mainly from Boël/Trébos, FBC/TFE and TA Ghent, were 7,4 % of total deliveries to the French market, which is well above the combined quota of 3,95 % + 0,75 % (Ghent) = 4,7 % of total deliveries by the contracting parties.

(75)

As far as the Arbed group is concerned, its combined deliveries into France between July 1983 and

June 1984, i. e. the first year of the 1983/84 agreements, were slightly above quota (7,61 % compared with 7,55 %). Statistics for the first eight months of 1984 showing the Arbed share as a percentage of total deliveries by Arbed and the French contracting parties, i. e. excluding the Italians, Belgians (except Ghent), Germans (except St Ingbert) and other (small) imports, indicate that Arbed started to exceed its quota seriously in about July/August 1984. The figures are given below.

Arbed share (actual) 1984 Month

As defined

above (%)

As defined

for quota

agreement (%)

January

February

March

April

May

June

July

August

7,72

9,20

8,47

8,46

9,11

not known

13,73

17,90

6,42

7,85

7,00

not known

7,40

7,35

not known

not known

(76)

The Commission takes it that Boël/Trébos, FBC/TFE and Arbed ceased to comply with the agreements after the first year of their operation, i.e. after June 1984.

The Commission has no proof that the intended extension of the agreements after the end of 1984 actually took place.

(77)

In 1985 there was a further agreement between German and French undertakings, dealing with interpenetration between Germany and France. This agreement is described in 135 to 143, which discuss the German market.

II. BENELUX MARKET

(78)

The agreements concerning the Benelux market consisted mainly of:

(a) price agreements between the main operators on the Benelux market, including the non-Benelux manufacturers, which were concluded at regular meetings between them which took place at least from August 1982 to November 1985;

(b) quota agreements between German manufacturers who exported to the Benelux countries and the other parties operating on the Benelux market and agreements concerning compliance with the prices set for the Benelux market by those parties;

(c) agreements between Benelux manufacturers concerning prices or agreeing not to produce certain types of welded steel mesh for competitors.

1. The first attempts at an agreement for the Benelux market

(79)

The efforts to arrive at an agreement for the Benelux market between those operating on that market date back at least to 1980.

As is shown by a letter from TU to STA, there was a meeting on 27 May 1980 in Brussels between the major firms operating on this market (Thibodraad, Arbed, Van Merksteijn, TU and TFE).

Despite certain points of conflict concerning above all the attribution of blame for the low price level on the Dutch market, the meeting was constructive to the extent that it was agreed ´for a trial period of one month to respect a minimum price of Hfl 900 per tonne for standard mesh (present market price: Hfl 850 to 880 per tonne)'. The parties agreed to hold a further meeting on 27 June 1980 ´in order to draw conclusions from this first attempt at coordination'.

2. Regular meetings and price arrangements between the major participants in Breda and Bunnik (Netherlands)

(a) General: time, place and object of meetings

(80)

The meetings took place from August 1982 at the latest until at least October 1985 in Breda (NL) and Bunnik (NL).

(81)

Their main purpose was to agree prices for the Benelux market.

(82)

The evidence regarding these meetings comprises:

- several telex messages sent to TU by Mr R. Peters, its agent in the Benelux countries; these telexes contain precise information about each meeting (time, place, participants, those absent, object of meeting (discussion of market situation, proposals or decisions about quotas and/or prices), agreement on date and place of next meeting),

- statements made by some of the participants to Commission officials during the investigations,

- references to these meetings in other documents (correspondence, internal memoranda, etc.).

(83)

The meetings known to the Commission are as follows:

Date

Place

1982

26. 8. 1982

Breda

1983

12. 1. 1983

Breda

11. 3. 1983

Breda

30. 8. 1983

Breda

3. 10. 1983

Breda

5. 12. 1983

Breda

1984

5. 1. 1984

Breda

28. 2. 1984

Bunnik

29. 3. 1984

Breda

11. 5. 1984

Breda

24. 8. 1984

Breda

28. 9. 1984

Bunnik

22. 10. 1984

Bunnik

6. 11. 1984

Bunnik

19. 12. 1984

Bunnik

1985

22. 1. 1985

Breda

5. 3. 1985

Bunnik

28. 3. 1985

Bunnik

24. 4. 1985

Breda or Bunnik

10. 6. 1985

Bunnik

26. 8. 1985

Bunnik

18. 10. 1985

Breda

24. 10. 1985

Breda

(b) The meetings in detail

(84)

Meeting of 26 August 1982 in Breda. Present were representatives of Thibodraad, TA, Van Merksteijn, FBC, Boël/Trébos and TU. The meeting was called by Trébos on the initiative of Mr Boël.

First the market situation was discussed. It was noted that ´current prices are extremely low' (less than Bfr 14 000 or Hfl 800 per tonne). This was due to the ´catastrophic situation' in Germany (DM 685 per tonne delivered). The preparations for the structural crisis cartel in Germany were mentioned. Mr Boël demanded a solution for the Belgian market. As far as he was concerned this was a pre-condition for participation in the agreement (´l'accord') in Germany. The following proposal was made: ´The previous plan based on the allocation of quotas to the various participants should be looked at again.' It would be studied by the representatives of Thibodraad (Mr Broekman) and TA (Mr Van den Bossche). Meanwhile the following minimum price was agreed:

Bfr 15 000 per tonne (Hfl 860 per tonne).

Importers from other countries were authorized to reduce this price by 1 %, thus making penetration possible (source: telex from Mr Peters to TU dated

27 August 1988 reporting on the meeting.).

(85)

As can be seen from the documentation, one of the key issues discussed at the meeting was the preparation of a quota cartel. This idea was clearly not new. The report of the meeting (telex from Mr Peters to TU) talked about ´looking again at the previous plan'.

In an internal Thibodraad memorandum (´Operational Marketing Plan Thibodraad 1981/1982/1983'), the desire is expressed for agreements (´afspraken') with competitors. But price agreements alone were apparently not thought enough. It would be ´ideal' to aim at a quota cartel as well as a price cartel owing to the fact that there was no growth in the market and export opportunities were declining, leading to excess capacity.

After the meeting of 26 August 1982 the first steps were evidently taken to set up such a quota cartel. The sales of the participating producers on the Benelux market in the previous four years 1978/1979/

1980/1981 were most probably used as a basis for the allocation of quotas. Contacts took place between the parties with the object of exchanging data on delivery tonnages on the Benelux market.

A telex from TU (signed C. Marie) to Boël/Trébos (Boël group, on whose initiative the meeting of 26 August 1982 had taken place) dated 2 September 1982 reads as follows:

´For the attention of Mr de Hornois. Further to our telephone conversation of 1 September 1982, here as promised are the figures for our deliveries of welded steel mesh to the Belgian and Dutch markets:

Year

Belgium

Netherlands

1978

9 800 tonnes

1 900 tonnes´

1979

8 700 tonnes

5 450 tonnes´

1980

5 200 tonnes

4 200 tonnes´

1981

4 600 tonnes

850 tonnes´

1982 (first half)

1 800 tonnes

120 tonnes'

The telex closes with a request that he (Mr Marie) be kept informed of developments'.

These statistics were clearly intended for the preparation of the quota cartel in which Mr Marie was very interested, as is shown by other documents of a later date (see 98 and 101 below).

(86)

At the meeting of 12 January 1983, attended by representatives of Thibodraad, TA, ZND, Boël/

Trébos, FBC and TU, a new attempt was made to fix minimum prices in stages for the following three

months, February, March and April 1983. Each month the price of the various products was to be raised by Hfl 20 or Bfr 350 as follows:

February 1983

March 1983

April 1983

Product

Hfl

Bfr

Hfl

Bfr

Hfl

Bfr

Standard mesh

800

14 250

820

14 600

840

14 950

Catalogue mesh

835

14 850

855

15 200

875

15 575

(Source: telex from Mr Peters to TU dated 17 January 1983).

(87)

At the meeting of 11 March 1983, attended by representatives of Thibodraad, TA, Van Merksteijn, ZND, FBC, Boël/Trébos and TU, it was first noted that the minimum prices fixed at the previous meeting on 12 January 1983 had not been observed - prices were lower than had been decided and in Germany they were somewhat higher than in Benelux.

Van Merksteijn accused some other producers (Thibodraad, TA, FBC and Boël/Trébos) of failing to keep their trading subsidiaries under control; their behaviour was helping to keep market prices low. The participants agreed to wait for possible movements in the price of wire rod before taking another decision. Meanwhile new prices for two types of welded mesh (standard and catalogue) were fixed:

Standard mesh: Hfl 840 = Bfr 14 950

Catalogue mesh: Hfl 870 = Bfr 15 500

(Source: telex from Mr Peters to TU dated 14 March 1983)

(88)

At the meeting of 30 August 1983, which was attended by representatives of Thibodraad, TA, Van Merksteijn, FBC, Boël/Trébos, ZND and TU, the market situation was discussed and prices for standard mesh were reported to be in the region of Bfr 17 000 per tonne. The Germans seemed to be less active in Benelux, so a price rise was possible. Prices of Hfl 1 000 per tonne or Bfr 18 000 per tonne for standard mesh and Hfl 1 100 or Bfr 20 000 per tonne for catalogue mesh were agreed (source: telex from Mr Peters to TU dated 8 September 1983).

(89)

At the meeting of 3 October 1983, which was attended by representatives of Thibodraad, TA, Van Merksteijn, FBC, Boël/Trébos, ZND and TU, it was noted that prices were currently between Bfr 17 000 and Bfr 17 800 per tonne. It was agreed to continue aiming for the prices agreed at the previous meeting (30 August 1983) (i.e. Hfl 1 000 or Bfr 18 000 for standard mesh and Hfl 1 100 or Bfr 20 000 for catalogue mesh) (source: telex from Mr Peters to TU dated 7 October 1983).

(90)

At the meeting of 5 December 1983, which was attended by representatives of Thibodraad, TA, Van Merksteijn, FBC, Boël/Trébos, ZND, BStG and TU, the discussion of the market situation revealed a sharp fall in prices (from Bfr 17 800 to 17 000 or even to 16 800 per tonne in Belgium and from Hfl 980 to 950 or even 930 in the Netherlands).

The main culprits were the Germans and Van Merksteijn, which had followed their lead. For this reason two representatives of BStG, Messrs Schmitz and Buschmann (in the telex of 7 December 1983 from Mr Peters to TU their names are misspelt ´Schmit' and ´Durschmann') had been invited to the meeting. It emerged during the meeting that the ´German representatives' were not in control of all German producers regarding their exports to Benelux. The producers Crampe and Hochwald, it was reported, were putting considerable quantities onto the Benelux market at very low prices. The Dutch producers were therefore going to take the matter up directly with Duesseldorf to arrange a meeting with the German firms in question. Meanwhile it was pointless to set a specific price. They should merely aim at a price between Hfl 930 and 980 per tonne for the Netherlands and between Bfr 16 800 and 17 800 per tonne for Belgium (source: telex from Mr Peters to TU dated 7 December 1983).

(91)

This 5 December meeting was significant in that it was the first to be attended by representatives of BStG who, as is clear from the wording of the telex, were regarded as representing all German producers.

(92)

The meeting had a remarkable sequel. On 15 December 1983 Mr M. Mueller, Chief Executive of BStG, sent the following telex to Thibodraad:

´For the attention of Messrs Broekmann and Houtbraken

Re: Meeting in Breda on 5. 12. 1983

Gentlemen,

My colleagues, Messrs Buschmann and Schmitz, have informed me of the outcome of the abovementioned meeting. Before the meeting took place, I had already carefully analysed trends in interpenetration between Belgium, Germany and the Netherlands, but unfortunately Mr Buschmann and Mr Schmitz were not fully briefed on this matter.

Whilst it is true that quite specific individual problems do exist, they are nowhere near as serious as has been made out. The decline in volumes currently complained of in all countries is typical for the time of year and only to be expected.

Instead of just criticizing the German Cartel Association and its Chairman and making

demands of them, people in neighbouring countries should stop to think about the immense benefits they, too, derive, in terms of higher prices from the regulation of the German market. After all, where would prices be in all our countries without the cartel?

As you are aware, I am naturally concerned in all our interests to curb or at least contain the activities of the small maverick producers. I should like to make it absolutely clear, however, that the biggest increase in cross-border trade has been in that from Belgium to Germany, which in view of the close cooperation with Boël is quite clearly attributable to the second Belgian producer. These are not - repeat, not - reimports. There have been a few lorry-loads of these, but they were put a stop to long ago.

In Germany, too, the prices of mesh from stock have fallen everywhere from the peak price level in October to the floor level and are hence in fact several tens of German marks lower than in October.

I do not deny that one German mesh producer

in particular has increased its deliveries to neighbouring countries to the west. However, your complaint about Crampe leaves me somewhat perplexed as you know as well as I do that that firm delivers to the Netherlands almost exclusively reinforcing wire and not mesh.

As I said, there are problems, but they are manageable. We must solve them, and solve them we shall. I place myself at your disposal for that purpose. But I am not prepared to stand by and see only German manufacturers put in the dock.

The German cartel agreement does not allow a legally binding export arrangement to be made. There can therefore only be sensible cooperation talks between our groups, talks which, through the cartel agreement in Germany, should have become not harder but easier.

Naturally, I have no objections to direct contacts between Belgian and/or Dutch groups and some German producers. A meeting between all participants before Christmas is out of the question, however, for lack of time.

I hear that the next Dutch/Belgian meeting is scheduled for 5 January 1984 in Breda. If invited, I shall be glad to attend and I am confident of having fairly accurate export figures for the German producers referred to.

I wish to express a continuing readiness to maintain the status quo in relation to exports to

neighbouring countries or at least not to increase them any more than imports from those countries.

However, because the end-of-year holidays will still be on in the first week in January, it will scarcely be possible for other German producers to accompany me on the fifth.

I should be grateful if you would discuss what I have said with your colleagues in the Breda group and let me know their reactions.

Yours faithfully,

Michael Mueller.'

(93)

Thibodraad sent a copy of this telex to TA

in Gentbrugge, asking it to reply by Tuesday,

20 December 1983 at the latest so that ´we can

then inform Mr Mueller of our point of view' (source:

letter from Thibodraad to TA Gentbrugge dated

16 December 1983).

Mr M. Mueller is Chairman both of the Fachverband Betonstahlmatten (German Welded Steel Mesh Association) and of the supervisory body of the structural crisis cartel in the Federal Republic of Germany which was authorized by the Federal Cartel Office in May 1983. (In the telex he describes himself as ´Chairman' (´Vorsitzender') of the German Cartel Association (´Kartellgemeinschaft').

In his telex Mr Mueller conceded that at least one producer (i.e. Hochwald) had increased its deliveries to Benelux. It can be concluded from this that at least BStG had adhered to the terms of the arrangement, for the complaints directed at BStG concerned not BStG but other German producers. That BStG observed

the arrangement regarding prices and quantitative restrictions on German deliveries to Benelux can be seen from another sentence of the telex from Mr Mueller to Thibodraad in which he states that he is ´concerned in all our interests to curb or at least contain the activities of the small maverick producers'. BStG, the company of which Mr Mueller is Chief Executive and which has a market share of at least 36 % in Germany, does not by any means number among the ´small maverick producers'.

This arrangement already existed before the telex was sent, i.e. before 15 December 1983 (it was concluded not long after the cartel was founded) and lasted at least until the beginning of the Commission's investigations (6 to 7 November 1985).

The arrangement covered not only quotas but also adherence to the prices agreed for the Benelux market. This is clear from the close connection between quotas and prices, and increase in exports being associated

with price-cutting. It is also clear from the accusation levelled during the meeting of 5 December 1983 (see 90) at the German producers Hochwald and Crampe that they were ´putting considerable quantities onto the Benelux market at very low prices'.

(94)

It is highly significant that in the telex Mr Mueller describes himself as ´Chairman of the German Cartel Association', speaks in defence of all German producers, offers explanations of the conduct of other producers, favours ´cooperation talks between our groups', says he is willing to give ´fairly accurate export figures for the German producers referred to' and expresses ´a continuing readiness to maintain the status quo in relation to exports to neighbouring countries or at least not to increase them any more than imports from those countries', a phrase which covers all imports and exports between the countries concerned and not just those accounted for by individual companies. Mr Mueller thus sought to convey the impression that he was not only speaking and entering into obligations on behalf of his own company but also acting as representative of the German ´group', i.e. the Fachverband, or the structural crisis cartel, which, from the economic viewpoint, was identical with the Fachverband and had the same membership (with the exception of three small firms), quite apart from other staff links.

This impression was reinforced by the fact that Mr Mueller ended his telex to Thibodraad with the request that the addressees ´discuss what I have said with your colleagues in the Breda group (i.e. the Belgo-Dutch "group'') and let me know their reactions'.

(95)

The meeting of 5 January 1984 was attended by representatives of BStG (Messrs Mueller, Buschmann and Ruthotto) as well as the usual participants (Benelux producers and TU). A discussion was held of the contents of Mr Mueller's telex to Thibodraad.

In reply to charges by the Benelux producers that German producers were exporting substantial quantities at very low prices to the Benelux markets, the German representatives referred to the export

of comparable tonnages to Germany by Belgian producers (Boël and, more recently, TFE/FBC). The Belgian producers pointed out in reply that (a) they observed prices on the German market and (b) the proper basis of comparison was percentage of the market and not tonnages.

A price reduction of Hfl 50 per tonne was agreed ´so as to get closer to the reality of the markets'. The following prices were to apply throughout the first quarter of 1984:

Standard mesh: Hfl 950 per tonne or Bfr 17 100 per tonne

Catalogue mesh: Hfl 1 050 per tonne or Bfr 18 900 per tonne

(Source: telex from Mr Peters to TU dated 11 January 1984)

(96)

Besides the usual participants, BStG representatives were again present at the meeting held on 28 February 1984 in Bunnik. In the discussion of the market situation it was reported that the agreed prices had not been observed, not only by the Germans (Crampe and Hochwald) but also by Van Merksteijn and even by Thibodraad, with the majority of the other producers following in order to get business.

The BStG representatives said they were trying to get Crampe and Hochwald to observe the prices on the Benelux market, but they had little influence over the two firms, which had their own way of doing business. It can be concluded from this that BStG, at least, was observing the agreed prices.

At the meeting it was also proposed that a crisis cartel arrangement with quota allocations be introduced, plainly based on the German model. This proposal was categorically rejected by Van Merksteijn, which attacked Thibodraad and accused the steel groups of allowing their trading subsidiaries to cause price erosion by stepping up competition between producers.

The wish was again expressed that the agreed minimum prices be adhered to in future.

An immediate price increase of Hfl 10 per tonne was agreed for two types of mesh (standard and catalogue), as follows:

Standard mesh: Hfl 960 per tonne or Bfr 17 300 per tonne

Catalogue mesh: Hfl 1 060 per tonne or Bfr 19 100 per tonne

A further price increase of Hfl 40 per tonne or Bfr 700 per tonne would take effect on 15 March 1984. Another meeting was scheduled for 29 March 1984 (source: telex from Mr Peters to TU dated 4 March 1984).

(97)

Meanwhile a special meeting devoted to the Belgian market was held on 22 March 1984. The meeting is referred to in a telex sent from Boël/Trébos (Mr De Hornois) to TU (Mr Marie) dated 26 March 1984. It reads:

´Following the Belgian market meeting of

22. March 1984, the prices for welded mesh have

been raised from Bfr 17 400 to Bfr 18 500 for March/April. A price increase of Bfr 500 is planned for May. We would be grateful if you would give these instructions to Mr Peters (TU's agent for the Benelux market) because we have noticed you are active on and interested in the Belgian market, despite what Mr Peters said at the last meeting in Breda'.

TU replied by telex on 3 April 1984. Mr Marie welcomed the price increase and gave details of TU's recent exports to Belgium and of price quotations made during the first 20 days of March 1984 for various tonnages, which he said where in line with what had been agreed at the Bunnik meeting on 28 February 1984. TU had also taken steps to avoid upsetting the decisions on prices in the Belgian market.

(98)

The telex went on to say that TU still wanted to sell to the Belgian market and reminded Boël of its sales figures for previous years. It suggested holding talks about the conditions under which it could sell in Belgium, which could be similar to those governing Boël's sales in France, within a small volume allocation, as had been discussed with Mr J. Boël in Paris on 6 July 1983.

(99)

The meeting held on 29 March 1984 in Breda was attended by all the usual producers except Van Merksteijn, plus a BStG representative.

A fall in demand was reported. It was also noted that the prices agreed at the previous meeting had not held. This was blamed on the Germans, Van Merksteijn and Thibodraad.

As agreed at the previous meeting, the following new basic prices were decided:

Standard mesh: Netherlands Hfl 1 000 per tonne, Belgium Bfr 18 500 per tonne;

Catalogue mesh: Netherlands Hfl 1 120 per tonne, Belgium Bfr 20 400 per tonne.

Once again the members were exhorted to ´observe the agreed prices in future' (source: telex from Mr Peters to TU dated 4 April 1984).

(100)

The next meeting was scheduled for 4 May 1984 but was postponed until 11 May 1984 because many of the intending participants were unavailable on 4 May 1984. Thibodraad informed TU among others about

the change of date by telex on 3 May 1984 and invited them to the meeting on 11 May 1984. What was

discussed at the 11 May meeting is related in a telex which Mr Peters sent to TU on 15 May 1984. Mr Peters himself could not attend, but was informed of the outcome by Messrs Van den Bossche (TA) and De Rijbel (FBC).

A price reduction of Hfl 20 per tonne was agreed, to bring prices more closely into line with the market price level.

The prices to apply in the months of May, June and July 1984 were:

Standard mesh: Netherlands Hfl 980 per tonne, Belgium Bfr 17 850 per tonne;

Catalogue mesh: Netherlands Hfl 1 100 per tonne, Belgium Bfr 20 000 per tonne.

Another meeting was scheduled for 24 August 1984.

(101)

In the mean time, Thibodraad tried to call an emergency meeting for 26 June 1984 to discuss a fall in prices in Belgium and the Netherlands.

TU replied to the invitation by telex on 21 June 1984. It began by asserting that ´it had done everything it could' to help achieve the objective of raising the

price level. By everything it meant ´applying the recommended prices, withdrawing offers where prices were expected to rise, and selling just seven tonnes since the beginning of the year, no more'. However, TU could not stay forever out of the Belgian market ´since our previous years' sales figures are known'. It was prepared to attend the meeting only if an allocation of market shares was decided, in which TU wished to have the same say as Belgian producers had for the French market.

(102)

At the meeting of 24 August 1984 a price reduction of Hfl 40 per tonne was agreed to bring prices closer to the depressed market level, which was blamed on the Germans, Van Merksteijn and Boël/Trébos. The new prices were:

Standard mesh: Netherlands Hfl 940 per tonne, Belgium Bfr 17 000 per tonne;

Catalogue mesh: Netherlands Hfl 1 060 per tonne, Belgium Bfr 19 300 per tonne

(Source: telex from Mr Peters to TU dated 31 August 1984).

(103)

At the meeting held on 28 September 1984 in Bunnik a further Hfl 20 per tonne price reduction was agreed

because of the weak demand, which was attributed mainly to price-cutting by the Germans. The new prices were:

Standard mesh: Hfl 920 per tonne, or Bfr 16 560 per tonne;

Catalogue mesh: Hfl 1 040 per tonne, or Bfr 18 720 per tonne;

(Source: telex from Mr Peters to TU dated 1 October 1984).

(104)

The 22 October 1984 meeting in Bunnik decided to stick to the prices agreed at the meeting on

28 September 1984 despite continuing weak demand and German price-cutting (source: telex from Mr Peters to TU dated 30 October 1984).

(105)

The next two meetings took place in Bunnik on 6 November and 19 December 1984. A statement to this effect was made to Commission officials by ZND on 6 December 1985.

(106)

At the meeting on 22 January 1985 the following prices were decided for the first quarter:

Standard mesh: Netherlands Hfl 900 per tonne, Belgium Bfr 16 400 per tonne;

Catalogue mesh: Netherlands Hfl 1 030 per tonne, Belgium Bfr 18 400 per tonne.

Van Merksteijn again attended and declared itself in agreement with the fixing of these prices (source: telex from Mr Peters to TU dated 24 January 1985).

(107)

At the meeting of 5 March 1985 Van Merksteijn was accused of undercutting the price in Belgium by Bfr 1 500 per tonne. Despite the continuing price-cutting, a price increase was agreed for the second quarter of 1985. The following prices were agreed:

Standard mesh: Netherlands Hfl 980 per tonne, Belgium Bfr 17 450 per tonne;

Catalogue mesh: Netherlands Hfl 1 090 per tonne, Belgium Bfr 19 400 per tonne.

(Source: telex from Mr Peters to TU dated 15 March 1985).

(108)

Two further meetings took place on 28 March and

24 April 1985, as is confirmed by statements made

to Commission officials by some of the participants

(e.g. Van Merksteijn) and by internal memoranda (note of 24 April 1985 from Mr Debelle (FBC) to Mr Wylenmann; see also 153).

(109)

A telex from ZND to Thibodraad dated 1 July 1985 shows that at these meetings prices were agreed for the third quarter of 1985.

Referring to a telex from a customer (Heusden-

Zolder) to Thibodraad dated 28 June 1985 which had gone to ZND by mistake and in which the customer confirmed an order for mesh at Bfr 20,5 per kilogram ZND points out to Thibodraad that this price, which was equivalent to Hfl 1 140 per tonne was ´not wholly in keeping with our agreements in Breda'.

From this it may be inferred that:

- a meeting for the third quarter was held in Breda (the meeting of 5 March 1985 for the second quarter had been held in Bunnik),

- the prices agreed there were higher than those agreed for the second quarter, because a price of Hfl 1 140 per tonne would not have undercut the second quarter price of Hfl 1 090 per tonne,

- Thibodraad was being reminded by ZND to keep to the agreed prices.

(110)

The meeting of 18 October 1985 in Breda (the holding of which was confirmed by Boël/Trébos's representative, Mr de Hornois, in a statement to Commission officials) also discussed prices. Although Mr de Hornois did not wish to describe the ´outcome' of this meeting as a price agreement, the wording of his statement, namely that it was established that a price of Bfr 19 000 was ´acceptable' on the Belgian market points to the conclusion that at this meeting, too, prices were agreed.

(111)

The last meeting of which the Commission is aware took place on 24 October 1985 in Breda, as some of the participants (Van Merksteijn, BStG) admitted in the course of the investigations. The Commission also has a copy of a telex from Thibodraad to BStG dated 15 October 1985 explaining to Mr Mueller how to get to the venue for the meeting.

(112)

The documentary evidence of meetings that is in the Commission's possession proves that a price cartel existed on the Benelux market at least from the end of August 1982 and at least until the beginning of the Commission's investigations (November 1985). The attempts to form a cartel covering quotas also were apparently unsuccessful, at least at these meetings (see 84, 85, 96, 98 and 101). They do not seem to have gone beyond the stage of supplying sales or export data to competitors (see 85).

While most of the firms which took part in the meetings in Breda and Bunnik did not deny, either in their written replies or in the statements they made at the hearing on 24 November 1987, their participation in those meetings, they maintained that the purpose of the meetings was not to fix prices but only to exchange

information about prices. The meetings were an attempt ´to bring some order to the market' or ´to gain a better understanding of the market, in order to assume responsibility for it and correct commercial policies'. In any case, those prices had, so it was claimed, no real impact on the market. To justify the meetings, reference was made to the formation of the structural crisis cartel in Germany (see 126). Some non-Benelux firms (TU, BStG) pointed out that they had only a small share of the Benelux market (on these contentions see below, Part II, Legal Assessment, 168 et seq.).

3. Contacts and agreements between Benelux producers

(113)

At least from 1980 onwards, sporadic contacts took place between various Benelux producers. The agreements that arose from such contacts were initially bilateral in character. The contacts were gradually stepped up and developed into regular meetings attended by almost all welded steel mesh producers operating on the Benelux market.

Even after regular meetings began, there were still occasional bilateral contacts to iron out specific problems between individual producers and to make the market regulation more complete.

These agreements concerned prices or mutual undertakings to refrain from manufacturing stated types of welded steel mesh in favour of competitors.

(a) Trilateral contacts and agreements between TA, Van Merksteijn and

Thibodraad

(114)

Such contacts date from at least 1980. Considerable light is thrown on them by an internal TA report dated 7 May 1980 about a visit made to Van Merksteijn on 28 April 1980. TA attached great importance to this visit. Although Van Merksteijn produced almost exclusively standard mesh, unlike Tréfilarbed Roermond (NL), which made almost exclusively catalogue mesh, the report stated that Van Merksteijn's prices for standard mesh had some influence on catalogue mesh prices. This is borne out by the accusations of price-cutting which standard mesh producers (like Van Merksteijn) and catalogue mesh producers (like Thibodraad, TA) levelled at

one another at the meetings in Breda and Bunnik

(e.g., those on 11 March 1983, 5 December 1983 and

28 February 1984) (see 87, 90 and 96). Discounting by Van Merksteijn is also complained of in an internal

TA memorandum of 8 December 1983 about a meeting with the management of its Roermond subsidiary on 23 November 1983.

(115)

The visit on 28 April 1980 was clearly not the first contact between TA and Van Merksteijn, for the report of that meeting says that ´It (Van Merksteijn) is prepared to resume regular talks if it is accepted as an equal partner by Thibo/Staalmat and Tréfilarbed'. This implies that regular talks had previously taken place between the three companies.

(116)

At any rate, these contacts led to a ´gentlemen's agreement' between TA and Thibodraad on the one hand and Van Merksteijn on the other that Van Merksteijn would not produce catalogue mesh and Thibodraad and TA (in its Ghent and Roermond plants) would not produce standard mesh.

This can be seen from an internal TA memorandum dated 18 December 1981 Re visits to Merksteijn, ZND, Thibo on 1 December 1981', in which it is stated: ´Our gentlemen's agreement: Merksteijn produces no catalogue mesh, Tréfilarbed no standard mesh (in Ghent and Roermond) was confirmed.'

It is also clear from the memorandum, part of which reports on the visit to Thibodraad, and especially from the statement that ´Thibo, too, was again urged to abide by our gentlemen's agreement with Van Merksteijn', that Thibodraad was party to the gentlemen's agreement.

This ´gentlemen's agreement' already existed before

1 December 1981, or at least came into being not later than on that date, and lasted at least until the beginning of the Commission's investigations (6 and 7 November 1985).

(b) Bilateral contacts and agreements between Tréfilarbed and Thibodraad

(117)

An internal Thibodraad report dated 3 March 1980 gives details of a meeting with Arbed on 27 February 1980. The purpose of the meeting was to consider ´to what extent the cooperation between Arbed and Thibodraad can be continued after Thibodraad has merged with Staalmat and Van Merksteijn has left the scene'. This indicates that there had been cooperation between TA and Thibodraad before then. The subjects discussed at the meeting included the exchange of information about their sales volume in order to keep their market shares constant, intensive consultation about enquiries from and quotations to customers, the application of uniform prices and a uniform pricing system for the various product types.

(118)

Another meeting between TA and Thibodraad took place on 1 December 1981 when TA representatives paid a visit to Thibodraad after visiting Van Merksteijn and ZND earlier the same day (source: TA report of 18 December 1981; see 116 and 125).

At this meeting TA and Thibodraad agreed to increase their prices for catalogue mesh to contract customers in the first quarter of 1982 by Hfl 110 per tonne. This agreement was highly significant, because TA and Thibodraad were by then the only producers of catalogue mesh in the Netherlands. The third large Dutch mesh producer, Van Merksteijn, was producing almost exclusively standard mesh under the gentlemen's agreement with TA and Thibodraad (see 114 to 116).

The report about the meeting on 1 December 1981 states that TA strongly urged Thibodraad, too, to ´abide by our gentlemen's agreement with Van Merksteijn'. This shows that a similar gentlemen's agreement also existed between Thibodraad and Van Merksteijn at least since 1 December 1981, lasting at least until the beginning of the Commission's investigations (6 and 7 November 1985) (see 116).

At their meeting on 1 December 1981 TA and Thibodraad also agreed to continue the other talks as before.

(119)

The two companies did in fact continue their contacts and arrangements in the years that followed. An internal Thibodraad memorandum dated 11 February 1982 about a meeting with Arbed on 10 February 1982 complained about Arbed's pricing: ´Several instances of discounting in January (were) in blatant breach of agreements'.

(120)

As one of its ´conclusions', the memorandum found that ´formulation of a pricing policy or selective measures, especially as regards the implications for profitability/liquidity, seems necessary pending developments in the coming days/weeks'.

(121)

The agreement to formulate joint pricing policies was also applied in the case of tailor-made mesh.

An internal TA memorandum of 29 March 1984 states:

´Re: Tailor-made mesh in NL

We have agreed with Thibo to raise our prices to contract customers for delivery in the second quarter (1984) by Hfl 60 per tonne.

(122)

This agreement between TA and Thibodraad on tailor-made mesh shows that the company which

participated in an agreement with TA about tailor-made mesh for the fourth quarter of 1983, but which is not mentioned by name in the relevant internal TA memorandum of 23 November 1983, was likewise Thibodraad. The memorandum states, inter alia:

´1. Market price trends in NL:

The planned increase of Hfl 50 to 70 per tonne for tailor-made mesh in the fourth quarter was fully implemented . . . Market prices for this mesh are now at the agreed level of Hfl 1 200 to 1 250 per tonne. Competition, especially from Germany, is hotting up. At the moment we see no chance of being able to raise prices from 1 January 1984.'

Although Thibodraad is not specifically mentioned in the latter memorandum, its involvement is clear from the context, in that both memoranda refer to price agreements in the Netherlands.

Thibodraad, like TA, is a major producer of tailor-made mesh in the Netherlands. Thibodraad had previously (on 1 December 1981, see point 118 above) entered into an agreement with TA on catalogue mesh prices for the first quarter of 1982 and had agreed to continue the other talks (i.e. including those about tailor-made mesh prices) as before. An agreement on the prices of tailor-made mesh for the last quarter of 1983 (which is said to have been ´fully implemented' on the Dutch market) is therefore unthinkable without Thibodraad's participation.

The impossibility of raising prices from 1