WRITTEN QUESTION P-0349/03

by Herman Vermeer (ELDR) to the Commission

(6 February 2003)

Subject: Possible conflict between sustainability policy in the terms of reference of producers' organisations and competition rules

(The NMA (Nederlandse Mededingingsautoriteit Netherlands Competition Authority) has imposed fines on producers' organisations in the shrimp fishing industry in the Netherlands (Case 2269) because of mutual agreements in the framework of trilateral cooperation with German and Danish producers' organisations, for which the Commission granted subsidies in 2002, whereas the German and Danish organisations have not been fined in their respective countries. This is the background to this Written Question.)

Are the terms of reference of European producers' organisations made sufficiently clear in the context of prohibitions relating to competition? Are producers' organisations not in fact under an obligation vis-à-vis the EC to take market-regulating action in the form of measures to tailor supply more exactly to demand, so that as producers' organisations they contribute with their fish products to both a qualitative and a quantitative valorisation of the industry? Is this consistent with the rules of competition? If sustainability and competition are in conflict, which of them takes precedence?

What can and will the Commission do to guarantee equal treatment in all the Member States and to provide clarification in the short term as to the rules to be followed by producers' organisations?

Answer given by Mr Monti on behalf of the Commission

(17 March 2003)

On 14 January 2003, the Netherlands Competition authority (NMa) has imposed fines totalling EUR 13 781 million on eight wholesale traders in shrimps, and one Danish, three German and four Dutch producer organisation in the shrimp fishery industry, for infringements of the European and Dutch prohibition on cartels. The NMa has established, first of all, that the producer organisations and the wholesaler traders entered into agreements with each other to limit the size of the catch of North-Sea shrimps and with regard to minimum prices and that, secondly, these agreements were also implemented in the period from January 1998 until February 2000.

Concerning the application of competition law on European producer organisations and tasks of such organisations, the Commission believes that the terms of reference of European producer organisations in the context of competition are made sufficiently clear. The relation between application of competition rules and the common market organisations established under the Community's agricultural and fishery policies, is set out in Council Regulation No 26(1) and the relevant jurisprudence. Producer organisations form the backbone of the common organisation of the markets in fishery products. They are entrusted with the task of taking market-regulation action. In discharging their task, they must act in accordance with the goals and procedures foreseen by the common market organisation. As long as producer organisations limit their action to this, there is no conflict with competition rules.

Concerning a possible conflict with sustainability policy, the Commission refers to the reform of the common organisation of the markets in fishery and aquaculture by way of Council Regulation (EC) No 104/2000 of 17 December 1999(2). Its main objective is to ensure that the production and marketing of fishery products take account of the need to support sustainable fishing. It is, therefore, designed to comprise measures which ensure that supply is better matched to demand. Producer organisations can plan their production and its adjustment to demand by implementing catch plans and they can also take measures to stabilise prices. This is in line with the sustainability focus of the Common Fisheries Policy, a feature which has been clearly strengthened by the most recent package of decisions on the reform of the Common Fisheries Policy, which the Council adopted in December 2002. As already indicated above, no conflict between sustainability requirements and competition rules will occur as long as producer organisations stick to acting within the bounds of their lawful tasks under the Common Fisheries Policy. Inversely, sustainability considerations may not be used as an argument to justify practices, such as agreements between producer organisations and wholesale traders concerning minimum prices and catch limits, which fall outside the lawful tasks of producer organisations as specified in the relevant legal instruments and violate the European competition rules.

In this context, the Commission did not subsidise in 2002 a tri-lateral co-operation between the producer organisations of the three Member States. Such a co-operation has been the subject of an earlier project. The Commission approved the application for funds for co-operation between the producer organisations, in 1999, in the framework of the PESCA programme. Only an advance payment has been made at the time the Declaration by the recipient of a financial contribution was signed. Since then, the Commission informed the applicants that it could not grant its final approval of the project until it was certain that the funds had only served to realise the objectives of the work programme and that they had not been used for activities which constitute a violation of competition rules.

Concerning the issue of equal treatment in all Member States, the Commission wants to stress that it welcomes the fact that the NMa has investigated and condemned infringements of European competition law. This is fully in line with the Commission's policy of decentralising and modernising the application of European competition law. The Honourable Member will be aware that these principles were the underpinning elements for the recently completed reform of European antitrust rules(3). Regarding the fines imposed, it should be noted that the NMa has imposed fines on all the companies and producer organisations that took part in the practices described, in proportion to their contribution to the effects of the prohibited agreements or practices on the Dutch market. Following the decision of the NMa and taking account of its other enforcement priorities, the Commission does not intend to open an additional procedure in this matter. The Danish and German competition authorities also have the competence to apply articles 81 and 82 on their respective territory. However, each public authority sets its own enforcement priorities.

(1) Council Regulation No 26 of 4 April 1962 applying certain rules of competition to the production of and trade in agricultural products, OJ 30, 20.4.1962.

(2) OJ L 17, 21.1.2000.

(3) Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4.1.2003.