EN Official Journal of the European Union CE 78/815

(2004/C 78 E/0865)

WRITTEN QUESTION E-3463/03

by Christos Folias (PPE-DE) to the Commission

(21 November 2003)

Subject: Fixing maximum profit margins for sales of fresh produce

In Greece maximum profit margins in the trade in fresh vegetable and fruit are laid down by Market Decree 14/1989, as amended by Market Decrees 16/1991 and 2/1992. These range from 7 % to 12 % for wholesale and 25 % to 40 % for retail prices.

In view of the above, will the Commission say:

— Is it aware of the existence of the above market decrees and the implementation thereof by the Greek authorities?

— Is it permissible to establish a maximum profit margin for products for the wholesale and the retail trade?

— Under these conditions, how can fair competition be guaranteed and the law of supply and demand maintained?

Answer given by Mr Monti on behalf of the Commission

(28 January 2004)

The Commission has not been informed by the Greek authorities about the specific measures introduced by Market Decree 14/1989 (1). However, Member States may and do adopt national legal measures to render the enforcement of a domestic policy applicable to a specific sector or industry more efficient, even though the sector is covered by a common organization of the market (a so-called ‘CMO’).

As the Honourable Member is aware, in 1972 the Council adopted a common organization of the market in fruit and vegetables (2). In sectors where a CMO applies, Member States are in principle no longer entitled to freely interfere with the price mechanisms of the CMO by, for example, implementing unilateral domestic laws having the direct or indirect effect of fixing prices in a certain sector. This, however, does not prohibit Member States such as Greece from adopting measures relating to price formation at the retail and consumption stages as long as such measures do not jeopardize the objectives or functioning of the CMO (3).

However, the Commission wishes to point out that it has to be differentiated between price fixing agreed on by undertakings and a price legislation adopted by public authorities. In the latter case, Member States have the responsibility to respect Articles 3, 10(2) and 81 et seq. of the EC Treaty.

The EC Treaty competition rules (Articles 81-86) apply to concerted practices between undertakings such as direct or indirect price fixing. According to Article 36 of the EC Treaty competition rules apply to agriculture to the extent determined by the Council within the framework of the requirements of the Common Agricultural Policy. Subject to certain exceptions, Council Regulation (EEC) No 26/62 (4) in substance also permits application of the competition rules to agricultural products.

Nevertheless, the European Court of Justice has ruled that, as regards the application of Article 3 and Article 81 of the EC Treaty to price rules, it must be observed that the purpose of such rules is not to compel traders to conclude agreements or to take any other action of the kind prohibited by Article 81(1) of the EC Treaty, but to entrust responsibility in pricing matters to the public authorities (5) and that Article 3 and Article 81 do not prohibit the adoption by Member States of such national rules providing for retail sale prices to be fixed by the public authorities (6).

From the point of view of the EC Treaty rules on free movement of goods (Articles 28-30), it should be noted that the maximum profit margin must be calculated on the basis of a purchase price which takes into account the import and procurement costs effectively borne by the retailers, in this way neutralizing the impact of distance and avoiding obstacles to commercial exchanges contrary to Article 28 of the EC Treaty (7).

(1) Amended by Market Decrees 16/1991 and 2/1992.

(2) Council Regulation (EEC) No 1035/72 of 18 May 1972 on the common organization of the market in fruit and vegetables, OJ L 118, 20.5.1972 which was replaced in 1996 by Council Regulation (EC) No 2200/96, of 28 October 1996, OJ L 297, 21.11.1996.

(3) Judgment of 17 January 1980 in Joined Cases 95 and 96/79 Kefer and Delmelle (1980) ECR, p. 103.

(4) Council Regulation (EEC) No 26/62 applying certain rules of competition to production of and trade in agricultural products, OJ B 30, 20.4.1962.

(5) Judgment of 2 July 1985 in Case 188/86 Lefevre ((1987)) ECR 2963.

(6) Judgment of 29 January 1985 in Case 231/83 Cullet v. Leclerc ((1985)) ECR 305.

(7) Judgment of 24 January 1978 in Case 82/77, Openbaar Ministerie v. Van Tiggele, (1978) ECR 25.