73/232/EEC: Commission Decision of 3 July 1973 relating to proceedings under Article 85 of the Treaty (IV/25.963 'Gas water-heaters and bath-heaters') (Only the French and Dutch texts are authentic)
Date: 1973-07-03
Institutions: European Commission
Subjects: Belgium, EU competition policy, cartel, control of restrictive practices, exclusive distribution agreement, heating, inter-company agreement, price agreement













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31973D0232

73/232/EEC: Commission Decision of 3 July 1973 relating to proceedings under Article 85 of the Treaty (IV/25.963 'Gas water-heaters and bath-heaters') (Only the French and Dutch texts are authentic)  


Official Journal L 217 , 06/08/1973 P. 0034 - 0038 





 COMMISSION DECISION    of 3 July 1973    relating to proceedings under Article 85 of the Treaty   ( IV/25.9 63 ' Gas water-heaters and bath-heaters ' )    ( Only the French and the Dutch texts are authentic )    ( 73/232/EEC )    THE COMMISSION OF THE EUROPEAN COMMUNITIES ,    Having regard to the Treaty establishing the European   Economic Community and in particular Article 85 thereof ;    Having regard to Council Regulation No 17 ( 1 ) of   6 February 1962 ;    Having regard to the notification of the ' Agreement   regulating the sale in Belgium of instantaneous gas   water-heaters and bath-heaters ' submitted to the Commission   on 3 January 1966 pursuant to Article 4 ( 1 ) of of   Regulation No 17 ;    Having heard the parties concerned pursuant to Article 19   ( 1 ) of Regulation No 17 and in accordance with Regulation   No 99/63/EEC ( 2 ) ;    Having regard to the Opinion delivered by the Advisory   Committee on Restrictive Practices and Dominant Positions ,   pursuant to Article 10 of Regulation No 17 on   22 November 1972 .    1 . Whereas the ' Agreement regulating the sale in Belgium   of instantaneous gas water-heaters and bath-heaters '   hereinafter referred to as ' the Agreement ' was concluded on   29 December 1965 between the following undertakings ,   hereinafter referred to as ' the member undertakings ' :    ( i ) SPRL LE RENOVA , Forest ,    ( ii ) SA CONTIGEA , Brussels ,    ( iii ) SNCR JOSKI et FILS , Ghent ,    ( iv ) SA ETABLISSEMENTS GUILLAUME PRIST , Antwerp ,    ( v ) SAB CHAFFOTEAUX et MAURY , Brussels ;    2 . Whereas the declared aim of the Agreement is , inter   alia , to promote the sale and use of the appliances   concerned ; whereas undertakings which produce a minimum of   2 000 appliances per year of a sufficient standard to carry   the trade mark ' Benor ' , are automatically admitted to the   agreement ; whereas undertakings are admitted as   ' manufacturer members ' if they have a registered factory in   Belgium , and as ' importer members ' if they represent   undertakings whose registered places of business are outside   Belgium ; whereas the ruling body of the Agreement is a Board   of Managers to which each member delegates one Manager ,   whereas these Managers are divided into two groups :   ' manufacturers ' and ' importers ' , with each of these   groups having five votes ;    3 . Whereas the Agreement prohibits its members from   granting to various categories of clients , discounts ,   allowances , or special advantages not provided for by the   marketing rules laid down in the Agreement ; from supplying   goods to customers on sale or return ; from giving guarantees   for longer than one year from the date of installation ; and   from giving after-sales service on terms other than those   laid down by common agreement ; whereas the members must   undertake , inter alia , to inform the secretary of the   Agreement of any known or suspected breaches , and to send   him , within one week of their date of issue , copies of all   invoices and corresponding credit notes relating to the   appliances covered by the Agreement ; whereas once any breach   of any duty imposed by the Agreement has been established by   expert enquiry and confirmed by a Decision of the Board of   Managers , it must be penalized by a fine of Bfrs 25 000 for   the first offence and Bfrs 50 000 for all subsequent   offences ; whereas to guarantee the payment of these   penalties the members of the Agreement must place on   permanent deposit in a bank the sum of Bfrs 25 000 ; whereas   all disputes are to be settled by arbitration ;    4 . Whereas the marketing rules laid down by the Agreement   are as follows :    A . The only purchasers to whom manufacturer members of the   Agreement may sell are divided into categories which must   meet the following requirements :    ( a ) Distributors , appearing on a list drawn up by the   secretary and sent to all members of the Agreement , must be   entered in the Commercial Register ; trade as wholesale   dealers in sanitary appliances ; have a minimum annual   turnover in sanitary appliances of Bfrs 6 000 000 ; have   shops and salerooms with a minimum floor surface of 500 m2   and 300 m2 respectively ( this criterion was abolished at the   resolution of the undertakings party to the Agreement during   the meeting on 11 January 1966 ) ; furnish all the necessary   references as to solvency , good character and business   capabilities ; not have any interests , either direct or   indirect , in undertakings which install the products in   question and grant fitters the usual discount ,    ( b ) Distributors of bottled gas appearing on a list drawn   up by the secretary and sent to all parties to the Agreement   must be appointed as such by the petrol companies ; sell   water-heating and bath-heating appliances ; and undertake to   grant the usual discount to the fitters ,    ( c ) Gas and petrol companies must be companies supplying   town gas which hire out or companies which distribute gas in   bottles and which sell appliances to their customers ,    ( d ) Installers must be recognized installers of sanitary   appliances ,    ( e ) Other customers are builders of housing estates and   blocks of flats ; contractors or foremen ordering more than   20 appliances at the same time for fitting out a specific   worksite ( cheap housing firms ( HBM ) or small landholding   undertakings ( PPT ) , also all bodies financially   dependent , even partially , on the Treasury , on quasi State   bodies or on bodies with delegated powers , which are not   subject to the marketing rules ) ; private purchasers ;    B . The following discounts are granted to the above   mentioned customers :    ( a ) A basic discount on the ' list ' price , inclusive of   tax for appliances and accessories ) :    ( i ) to distributors * 37 %    ( ii ) to gas and petrol companies * 37 %    ( iii ) to distributors of bottled gas * 34 %    ( b ) A fixed discount on the gross list price :    ( i ) to builders of housing estates and blocks of flats *   20 %    ( ii ) to installers * 20 %    ( iii ) to private purchasers * 5 %    ( c ) A quantity discount granted on deliveries to the same   address or for appliances collected at the same time from the   factory or the importer ( inclusive of tax but less basic   discount ) :    ( i ) to distributors    ( ii ) to gas and petrol companies    ( iii ) to distributors of bottled gas    on deliveries of Bfrs 50 000 to 100 000 * 1 %    of Bfrs 100 000 to 150 000 * 1.5 %    of Bfrs 150 000 to 250 000 * 2 %    exceeding Bfrs 250 000 * 3 %    ( iv ) to installers    on an order of more than five appliances delivered and   invoiced at one and the same time , an additional discount of   4 % ,    ( d ) A turnover allowance , granted to distributors , gas   and petrol companies and distributors of bottled gas , on the   total purchases ( net amount , inclusive of tax ) , paid for   during the previous financial year for the appliances   concerned , whether or not the suppliers were members of the   Agreement :    from Bfrs 500 000 to 1 000 000 * 1 %    from Bfrs 1 000 000 to 1 500 000 * 1.5 %    from Bfrs 1 500 000 to 2 000 000 * 2 %    from Bfrs 2 000 000 to 3 000 000 * 2.5 %    from Bfrs 3 000 000 to 4 000 000 * 3 %    from Bfrs 4 000 000 to 5 000 000 * 3.5 %    exceeding Bfrs 5 000 000 * 4 %    C . Uniform terms relating to payment and contract periods   are applied in respect of all categories of customers ;    5 . Whereas the undertakings Le Renova , Contigea and   Joski are manufacturer members of the Agreement and whereas   the undertakings Prist and Chaffoteaux and Maury are importer   members of the Agreement , Prist for German appliances and   Chaffoteaux and Maury for French appliances ; whereas all are   members of the Union des fabricants belges de chauffe-eau et   chauffe-bains , an association governed by Belgian law ,   hereinafter referred to as the ' Union ' , which is   responsible for implementing the Agreement ;    6 . Whereas the member undertakings and almost all the   dealers who sell their products were bound between 1947 and   1966 ( when the Agreement entered into force ) by collective   reciprocal exclusivity in buying and selling ;    7 . Whereas the appliances in question are of a relatively   homogeneous type ; whereas for each appliance , the selling   prices charged to the consumer by the member undertakings are   uniform :    Whereas , the market share of total Belgian sales of the   member undertakings exceeds 70 % ; whereas each of the member   undertakings obtained on average , during the years 1967 to   1969 , the following percentages of this market share :    Le Renova ( manufacturer ) * 36.30 %    Contigea ( manufacturer ) * 34.35 %    Joski ( manufacturer ) * 0.91 %    Prist ( importer ) * 26.22 %    Chaffoteaux et Maury ( importer ) * 2.22 %    Whereas , during the same three years , the   ' distributors ' obtained 94.25 % of their supplies from   member undertakings and 5.75 % from other manufacturers ;    8 . Whereas after the Commission had notified its   objections to the Union and to the member undertakings on   3 March 1972 , the Union informed the Commission by letter on   17 March 1972 , that on 31 December 1970 the member   undertakings had terminated the Agreement and dissolved the   Union ; whereas , however , on 30 March 1972 the Union made   certain replies to the objections sent to it , and asked for   an additional period in order to examine these objections   more thoroughly ; whereas , therefore , the request submitted   by the undertakings concerned for the application of Article   85 ( 3 ) , should be treated as still in existence ;    II    1 . Whereas the provisions of the Agreement set out below   have as their object and effect the perceptible restriction   and distortion of competition within the common market :    ( a ) Whereas the Agreement establishes a distribution   network through which the member undertakings must sell the   products in question on the Belgian market ; whereas dealers   such as large shops , cooperatives , and chain stores are   excluded from this network ; whereas , consequently , the   member undertakings , in particular the two importers ,   cannot sell their products to these dealers , whose business   capacity is not in question ;    Whereas this provision perceptibly restricts the two   importers ' possibilities of selling in Belgium ; whereas   they cannot supply the aforementioned dealers who are   important buyers ; whereas this provision deprives these   dealers of some important sources of supply situated within   the common market , since the importer members of the   Agreement hold approximately a 20 % share of the Belgian   market ;    ( b ) Whereas the marketing rules and the ' basic   discounts ' laid down by the Agreement oblige the member   undertakings and the dealers included in the distribution   network ' distributors ' , ' gas and petrol companies ' ,   ' distributors of bottled gas ' ) to grant their customers   discount allowances and other standardized conditions of   sale ; whereas , consequently , the provisions deprive these   undertakings , in particular the importers and these   dealers , of the possibility of determining all their   conditions of sale in accordance with their own judgement and   according to the services which the buyers do in fact give ,   quite apart from the category in which they are classed by   the Agreement ;    Whereas the provisions perceptibly restrict the   competitiveness of these importers and dealers on the   Belgian market ; whereas no competition by the offering of   more favourable conditions is possible , either between the   importer with regard to , all their sales , nor between the   dealers with regard to purchases from the importers ( 26 % of   their turnover ) , nor on the part of the importers and   dealers vis-à-vis their respective competitors ;    ( c ) Whereas , moreover , the Agreement obliges the member   undertakings to grant to ' distributors ' , ' gas and petrol   companies ' and ' distributors of bottled gas ' , an   allowance on the turnover of each customer in respect of   purchases from all his suppliers , whether or not they are   members of the Agreement ;    Whereas the distinctive feature of this type of aggregated   rebate system is that the amount of the allowance granted by   each supplier is calculated by applying the relavant rate to   the total turnover of the customer whatever the annual amount   of his purchases from the supplier concerned ; whereas   consequently , this aggregated rebate system :    ( i ) makes it pointless for these customers to render   services to individual suppliers ( such as off-season   purchasing , stocking-up , promotion ) ,    ( ii ) dissociates the selling price from the cost price   and artificially places all suppliers in the same position   with regard to the relationship between these two prices ;    Whereas the abovementioned distinctive feature has the   effect of :    ( i ) making it a matter of no consequence to the   customers whether they render services to individual   suppliers and therefore concentrating their interest solely   on the product ( lack of product differentiation ,   differences in selling price , range of consumer choice ) ,    ( ii ) supplementing the amount of the reduction which each   supplier must grant by an additional unjustified charge which   assumes larger proportions where the amount of purchases   made annually by a customer from any one supplier is small by   comparison with his total turnover ;    Whereas , in this specific case , the two importer members   of the Agreement account respectively for approximately   18.50 % and 1.50 % of total sales of the products in question   on the Belgian market ; whereas , by reason of the   application of this type of aggregated rebate system , they   are obbliged to grant the abovementioned dealers a turnover   discount which involves a further appreciable discount on the   selling price without any services being rendered in return ;    Whereas this provision , therefore , perceptibly distorts   competition on the Belgian market in the products   concerned ;    Whereas these abovementioned dealers display but little   interest in the appliances sold by other manufacturers ;   whereas since 1947 they have been closely bound to the member   undertakings from whom they obtain the supplies for   94 % of their sales ; whereas the three manufacturer members   of the Agreement represent almost the total national   production and whereas with the two importer members they   offer a varied range of appliances which are relatively   homogeneous , have fairly similar prices , and to which   customers have been accustomed for a long time ; whereas no   services are requested from individual dealers in return for   the range of discounts granted by the member undertakings ;   whereas in order , therefore , to interest these dealers in   products from other sources , in particular in products   originating in another member country and whose launching   would necessitate promotion and additional risks ,   manufacturers who are not members of the Agreement must grant   these dealers bigger reductions than those granted to them by   the member undertakings of the Agreement for 94 % of their   total turnover ;    Whereas , consequently , manufacturers who are not members   of the Agreement , in particular those from other member   countries , who wish to make inroads into the Belgian market   but who can only obtain initially at least , a very small   share of the Belgian market , will find themselves faced with   the alternative of giving up selling to the other dealers   who have only 30 % of the total sales , or if they also wish   to sell to the abovementioned dealers , granting them a   greater reduction than all those granted by the member   undertakings ;    Whereas , consequently , the provision of the Agreement   which obliges the member undertakings to grant an allowance   on each customer ' s turnover on purchases from all his   suppliers whether or not they are members of the Agreement ,   perceptibly restricts or distorts competition on the Belgian   market for the products in question , the same also holding   true for manufacturers who are not members of the Agreement ,   in particular those from other member countries ;    2 . Whereas the abovementioned restrictions on competition   are liable perceptibly to affect trade between Member   States ;    Whereas this is the result of the restrictions on   competition referred to above , affecting not only the   importer members of the Agreement but also manufacturers from   Community countries other than Belgium who are not members of   the Agreement ; whereas these restrictions affect imports   into Belgium of appliances manufacturered in the other member   countries ;    Whereas it follows that this Agreement directly jeopardizes   free trade between the Member States in a way which is   harmful to the realization of the objectives of a single   inter-State market ;    III    Whereas the Agreement does not fulfil the conditions   required by Article 85 ( 3 ) ; whereas it does not contribute   to improving production or distribution or to promoting   technical or economic progress within the meaning of these   provisions ;    Whereas the submissions of those who notified the   Commission of the Agreement contain no indication that the   restrictions examined in Part II would be better than   competition itself for the purpose of improving production   and distribution and technical and economic progress ;   whereas the facts with which the Commission is acquainted do   not permit the conclusion that such a situation exists ;    Whereas the need to adhere to certain technical standards   has no connection with the imposition of standardized   reductions and other conditions of sale and after-sales   service or with the exclusion of certain categories of   purchaser ;    Whereas , furthermore , it is no apparent in what manner   the obligations imposed by the Agreement could improve sales   of the products in question better than competition itself ;   whereas the exclusion of certain categories of qualified   purchasers and the restricted opportunities to attract orders   of the dealers allowed into the distribution network , are   both likely to obstruct , rather than contribute to the   improvement of sales of the products concerned ;    Whereas , therefore , the Agreement , compared with the   situation which would exist without it , does not give rise   to any perceptible objective advantages for the distribution   of the products in question which could compensate for the   inconveniences resulting therefrom as regards competition ;    HAS ADOPTED THIS DECISION :    Article 1    The ' Agreement regulating the sale on the Belgian market   of instantaneous gas water-heaters and bath-heaters '   concluded between the undertakings :    ( i ) SPRL Le Renova , Forest    ( ii ) SA Contigea , Brussels    ( iii ) SNCR Joski et Fils , Ghent    ( iv ) SA Etablissements Guillaume Prist , Antwerp    ( v ) SAB Chaffoteaux et Maury , Brussels    providing for standard discounts and other conditions of   sale and after-sales service , and an allowance on the annual   turnover of customers on purchases from all suppliers ,   whether members of the Agreement or not , constitutes , at   least for the period from 29 December 1965 to   31 December 1970 , a breach of Article 85 ( 1 ) of the Treaty   establishing the European Economic Community .    Article 2    The request for exemption pursuant to Article 85 ( 3 ) ,   submitted by the undertakings referred to in Article 1 , in   respect of the Agreement referred to in Article 1 , is   refused .    Article 3    This Decision is addressed to the undertakings referred to   in Article 1 .    Done at Brussels , 3 July 1973 .    For the Commission    The President    François-Xavier ORTOL    ( 1 ) OJ No 13 , 21 . 2 . 1962 , p. 204/62 .    ( 2 ) OJ No 127 , 20 . 8 . 1963 , p. 2268/63 .