3.

With regard to the evaluation of the distribution system in the light of Article 85, to which the Commission restricted itself, we should first consider those features which in the opinion of the Commission are in no way covered by Article 85 (1). This is the case with regard to the requirement that dealers to whom supplies may be delivered must fulfil certain technical conditions. This also applies to the prohibition imposed on wholesalers on supplying private consumers, making it impossible to supply institutional bulk purchasers such as old people's homes, hospitals, the Red Cross, religious establishments and so forth, whereby supplies to trade consumers are permitted only if it is guaranteed that the products will be used for commercial purposes. No criticism was made concerning the first point, that is delivery of supplies only to dealers who fulfil particular technical conditions. It is also clear that any such criticism would not be justified. In fact the Commission is right when it states that there are no objections in this respect on the basis of competition law because these conditions are relatively easy to fulfil and because no quantitative restriction is linked thereto; what is concerned here is in fact an open system to which any person who fulfils the conditions is admitted. The applicant has, rather, criticized both other aspects. It objects that these restrictions required checks to be made on delivery. Such checks are however impossible on account of the structure of the self-service wholesale trade and that trade is therefore excluded from competition with regard to SABA products. It further claims that, so far as supplies to institutional bulk purchasers are concerned, there is an impermissible restriction on normal wholesale activities. In so far as the delivery of supplies to trade consumers is subject to restrictive conditions, the applicant is moreover of the opinion that the latter are unreasonable both in their original version and in the less onerous form to which they were modified during the proceedings, not only with regard to wholesalers but also to trade consumers. (a) If we first ask ourselves in this connexion whether the restrictive conditions applicable to wholesalers must in fact lead to the exclusion of the self-service wholesale trade because it is allegedly impossible, on account of its structure, for the necessary checks to be made when the goods leave the premises and to have agreements signed, the answer to that question can only be in the negative. In my opinion the applicant has not showed convincingly that the self-service wholesale trade, in its present structure or as the result of small and unimportant changes, is not in a position to fulfil the conditions applicable under the distribution system and thus to take part in competition in SABA products. It is important to remember that the self-service wholesale trade must in any case restrict the category of buyers, in other words it must exclude private consumers. This is necessary in view of several provisions of German law (the Law against unfair competition), the Law on trade discounts, the Law regulating the opening hours of shops and the Regulation on the display of prices). In the case of the applicant, only a person who possesses a purchasing card may obtain access to self-service wholesalers, and in this connexion a check is made as to whether a business activity is carried on by means of the presentation of official certificates and through the presence of the applicant's own inspectors on the premises. Inspections are however necessary in addition in order to keep abuses, in other words the supply of private needs, within limits, those abuses being especially serious when institutional bulk purchasers and trade consumers are admitted. Such inspections can only usefully be carried out after purchase. Accordingly, the applicant explained at the hearing granted by the Commission that in the case of purchases by traders the goods are further inspected and it also claimed before the Oberlandesgericht Hamburg, as appears from the judgment delivered on 16 December 1976, that spot checks are frequently carried out before arrival at the cash desk in order to ascertain whether the purchase is in fact intended to cover commercial needs. If it is borne in mind in addition that it is also necessary, where appropriate, to issue guarantee cards when goods leave the premises and that inspections must be carried out when goods are purchased by agents — the latter must sign special declarations as they leave because such purchases are permissible only to a limited degree under the applicant's conditions of business — it is hard to see why it should not be possible to incorporate into this system immediately the inspections which prove necessary under SABA's distribution system. In fact, in relation to the exclusion of institutional bulk purchasers, this only requires a simple note on the purchasing card and an inspection of the goods when they leave the premises. Trade consumers need only sign an undertaking; in their case it is necessary to check in addition whether the purchase is for commercial purposes and in this connexion a check as to the commercial activity is not necessary; an inspection of the purchasing card should be sufficient. It is accordingly impossible to state that the abovementioned characteristics of the SABA distribution system necessarily exclude the self-service wholesale trade and there can therefore be no question of an appreciable restriction of competition from this viewpoint. (b) Moreover, with regard to the appraisal from the point of view of competition law of the exclusion of institutional bulk purchasers from obtaining supplies from wholesalers and to the restrictions which apply to the delivery of supplies to trade consumers, the following observations must be made: (aa) As to the first point, I have the impression that the reference by the applicant to German patent and tax law, according to which the delivery of supplies to institutional bulk purchasers who are regarded as trade purchasers is deemed to be a normal wholesale activity, is as irrelevant as the reference to the Council Directive of 25 February 1964 concerning the attainment of freedom of establishment and freedom to provide services in respect of activities in wholesale trade. As the Commission, in my opinion correctly, stated with regard particularly to the directive, according to which wholesale trade activities also include the delivery of supplies to large-scale consumers, its purpose is solely to abolish discriminatory practices and not to create more extensive rights for wholesalers. However, in the final analysis this question may be left open. In fact the decisive factor is the finding reached during the proceedings that the exclusion of institutional bulk purchasers from obtaining supplies from wholesalers has no appreciable effects on the market with which we are concerned in the present case. In fact institutions can hardly come into consideration as bulk purchasers in the field of electronic equipment for the leisure market and it is obvious that where this is the case they, like for example the German army, purchase directly from the manufacturer. The applicant was accordingly unable to contradict the statement that such sales form only a small proportion of its turnover. Thus it may correctly be stated that this aspect of the distribution system does not noticeably affect competitive relationships and that therefore, since, according to the statement of the Commission, it is likewise impossible to discern a perceptible effect on trade between Member States, it was decided with good reason that Article 85 (1) of the EEC Treaty does not apply in this connexion. (bb) The restriction of the possibility of supplying trade consumers applied under SABA's distribution system must first be seen against the background of the abbvementioned provisions of German law (the Law against unfair competition, the Law regulating the opening hours of shops and the Regulation on the display of prices). They are based on a separation of roles between wholesalers and retailers in the interest of fair competition and the protection of the consumer. It is true that problems of detail in this connexion still have to be settled. It seems however that especially in the decided cases there is a marked trend with regard to the concept of the ‘final consumer’, who must obtain supplies from retailers; increasingly, traders who buy for their own private needs or needs unconnected with the business are placed in that category. In this connexion I would refer the Court to the judgment of the Oberlandesgericht Hamburg of 16 December 1976 which was produced during the proceedings. I would also refer to a reply by the Government of the Federal Republic of Germany to a parliamentary question which was likewise produced before this Court, and finally, to the article ‘Cash-and-Carry-Betriebe zwischen Groß- und Einzelhandel’ which was published in ‘Wettbewerb in Recht und Praxis’ 1977, p. 69 et seq. According to these sources, it is necessary to ensure that wholesalers principally supply retailers and trade consumers in the abovementioned sense. In other words, under German law strict criteria apply in order to exclude the supply by the self-service wholesale trade to what are really final consumers, that danger being particularly great where trade consumers are widely admitted. On the other hand, it is relevant and in fact even more important that the distribution system established by SABA is based on a clear separation between the roles of wholesalers and retailers. Wholesalers must perform special services relating to sales promotion and participate in the development of the sales network. They are supposed to concentrate on this and in this connexion an excessive number of business relations with partners other than persons who are definitely retailers would be a hindrance. In view of these special services wholesalers are also granted larger profit margins. In my opinion it is necessary to accept immediately that disregard of the demarcation line between wholesalers and retailers, would lead to discrimination between consumers and to distortions of competition to the disadvantage of retailers. If wholesalers came into competition with retailers in this way their interest in the sale of SABA products would diminish and a deterioration in service to customers would result. Therefore it is understandable that a strict watch is kept that wholesalers do not engage in what are in fact retail transactions, which also explains why supplies to trade consumers by wholesalers are subject to the condition that the purchased goods are intended for business purposes. I cannot see how objections could be raised against this from the point of view of competition law. If this viewpoint is adopted it is likewise impossible to raise any objections against the obligations placed upon suppliers and purchasers in this connexion for the purpose of safeguarding the demarcation line which they have established. Thus provision is made, as the Court is aware, for traders to make a declaration, originally made by the manager of the undertaking but since the beginning of 1977 also by an agent, setting out the intended use, declaring that the goods are exclusively intended for the specific commercial requirements of the undertaking and stating that it is prohibited to pass on the goods to a third person for a period of two years. Wholesalers must check the existence of a commercial undertaking and the particulars of the intended use. Under the original version of the Distribution Agreement for SABA Wholesalers, they had to ensure that SABA products were used only for such commercial purposes as would promote the efficiency of the business; under the latest version they only have to confirm, taking the care expected of a reasonable man of business, that the goods are used for the commercial purposes of the undertaking. On a sensible interpretation, this amounts to no more than ascertaining that there is a factual connexion with a business undertaking and that the statements of the trade consumer appear to be plausible. This should in fact bear an appropriate relationship to the aim pursued, which is unobjectionable from the point of view of competition law. If, however, the view is taken that the version of the undertaking initially applicable was too strict and could have stood in the way of business transactions, the view could accordingly be taken that this is immaterial with regard to competition law since on account of its scope its effects could scarcely be appreciable. With regard to the aspects of the distribution system which in the Commission's view did not come under Article 85 (1) of the EEC Treaty, all these considerations lead me to the conclusion that the Commission's assessment cannot with justification be contested.