WRITTEN QUESTION P-1419/03

by Véronique Mathieu (EDD) to the Commission

(14 April 2003)

Subject: Fines imposed on French farmers' unions

The Commission recently imposed fines on six French farmers' unions for hampering competition.

The Commission knows that its decision constitutes a death blow for trade unionism in the farming industry. The French unions are highly representative, with 70 % of all farmers belonging to one or other of them. All branches of the industry now feel threatened.

In 2001, at the height of the crisis in the beef and veal sector triggered by both BSE and foot and mouth disease, the operators in the beef and veal sector attempted to control market prices in order to prevent the sector, which maintains high quality standards, from going under.

At the time, producer prices were in free fall, while there was no fall in consumer prices on the contrary, in some cases they rose. The emergency measures taken by the operators did not constitute an agreement between commercial undertakings aimed at gaining a dominant market position; they were merely a means for operators in the beef and veal sector to show solidarity with each other, with the French Government's approval, at a time which an economic disaster called for exceptional measures.

Neither the European institutions nor the national authorities came up with any effective solutions at the time. The steps taken to withdraw produce from the market proved inadequate, partly because of a lack of cooperation on the part of some Member States.

Given that the Commission has accepted the idea of natural disasters, should it not do the same for economic disasters, which also cause human hardship, and, having done so, authorise the governments of the Member States to take appropriate action?

What steps does it intend to take in the future should this or some other sector be hit by a similar crisis?

Answer given by Mr Monti on behalf of the Commission

(5 May 2003)

As noted by the Honourable Member, on 2 April 2003 the Commission imposed a fine of EUR 16,68 million on six French farmers' unions for infringing the competition rules. The infringement took the form of an agreement to fix between farmers' unions and slaughterers' unions a minimum purchase price for certain types of cattle and to suspend and subsequently restrict beef imports from other Member States. The decision will be published as soon as possible in the Official Journal of the European Union.

As indicated in its decision, the Commission recognises the importance of trade union activity and the freedom associated with it. However, this freedom does not authorise trade union organisations to violate knowingly public order rules such as those governing competition. The Commission would point out in this connection that the French Competition Council regularly imposes penalties in respect of offences of this nature committed by trade union organisations, including those working in the agricultural sector. Trade union activity should, rather, involve using all legal means to assist members. Moreover, as far as the Commission is aware, no agreements on prices or on suspending imports have been concluded by operators in the other Member States hit by falling beef prices.

The Commission is, of course, perfectly aware of the context of the specific crisis which hit the beef sector, as the many regulatory measures taken to stabilise the market clearly demonstrate. It spent over EUR 1,5 billion on stabilisation measures; incidentally, France was authorised to grant over EUR 300 million in direct aid to farmers hit by the crisis. It applied for the first time a specific provision enshrined in point 5(b) of its Guidelines on the method of setting fines(1) in order to reduce substantially (by 60 %) the fine which would otherwise have been imposed.

The Commission cannot take a position in the abstract on how issues of this nature will be dealt with in future. All competition issues need to be examined on a case-by-case basis. It can guarantee only that it will fulfil its duties as guardian of the Treaty by enforcing competition rules whenever it is notified that they have been infringed.

(1) OJ C 9, 14.1.1998.