WRITTEN QUESTION E-3517/00

by Charles Tannock (PPE-DE) to the Commission

(13 November 2000)

Subject: Inntrepeneur Beer Tie

A number of public houses in the UK are let under an Inntrepeneur twenty-year lease, which imposes an obligation on those tenants to buy their beer from a supplier nominated by Inntrepeneur (what is known as the Beer Tie). The validity of the Inntrepeneur Beer Tie was the subject of a large number of complaints to the Commission by tenants and tenants' groups who felt that the Beer Tie infringed the Union's rules on competition under Article 81 (formerly Article 85) of the Consolidated Treaty. In November 1997, the European Commission rejected Inntrepeneur's application for an individual exemption in respect of the beer tie on the basis that it was unreasonable. The European Commission decided against publishing a formal decision to that effect on the grounds that it was not necessary to do so since Inntrepeneur had withdrawn its application for an exemption and that the tenants who had suffered damages as a result of the imposition of the unlawful beer tie would have an adequate remedy in the national courts.

Hundreds of Inntrepeneur's tenants have pursued their claims in the English courts, and their claim for a remedy in damages for the imposition of the Beer Tie in the past has been referred to the European Court of Justice by the Court of Appeal in the test case Crehan -v- Courage. However, they have been prevented from pursuing two other important aspects of their claim by a decision of the House of Lords taken on 16 July 1999 to refuse leave to appeal in two other cases Inntrepeneur -v- Langton and Passmore -v- Morland. In the Langton case, the tenant was seeking a ruling (inter alia) that the principle of effective remedy under European law entitled a tenant to be permitted to set off any claim for rent arrears against a claim against the landlord. In the Passmore case, the tenant sought a ruling on the interpretation of Article 81(2) which provides that any agreements or decisions prohibited pursuant to this Article shall be automatically void. In that case, the landlord was arguing that automatically void meant void only so long as the economic circumstances giving rise to the infringement of Article 81 remained in existence, whilst the tenant argued that the clear and obvious meaning of automatically void was that the restriction was void, and could never be resurrected irrespective of any change in circumstances. Is the Commission aware of the legal reasons given the House of Lords for non-referral, and does the Commission propose to refer the cases itself?

Answer given by Mr Prodi on behalf of the Commission

(10 January 2001)

In the cases to which the Honourable Member refers, the House of Lords did not refer any question to the Court of Justice pursuant to Article 234 (ex Article 177) of the EC Treaty because it refused leave to appeal from the Court of Appeal. Consequently, the House of Lords was not seised of the case. As a matter of English law, the Appeal Committee of the House of Lords does not state reasons for granting or refusing leave to appeal. As a result, the Commission does not know of the reasons why the House of Lords refused to consider the matter of the appeal and of a preliminary reference, if such a reference had been requested in the Petition of the Appellants.

The Commission has no power to refer a case to the Court of Justice for a preliminary ruling in the circumstances described in the question. According to Article 234 of the EC Treaty, only a court of a Member State may make such a reference.

The sole power which the Commission has is to investigate the matter with a view to bringing proceedings against the United Kingdom under Article 226 (ex Article 169) of the EC Treaty. In its answer to Written Question P-1191/00 by Mr Kirkhope(1) the Commission stated that it was in fact investigating the matter.

Finally, it should be noted that a series of questions have been referred to the Court of Justice by the Hovrätten för Västra Sverige in case C-99/00(2) which raise the issue of the compatibility with Article 234 of the EC Treaty of a system whereby leave to appeal is necessary before a case is heard by the supreme court.

(1) OJ C 53 E, 20.2.2001, p. 96.

(2) OJ C 149, 27.5.2000.