WRITTEN QUESTION No. 1763/98 by Werner LANGEN to the Council. Price agreement between the French cigarette industry and the French Government
Date: 1998-06-08
Institutions: European Parliament, LANGEN
Subjects: France, Germany, fixing of prices, horizontal agreement, restriction on competition, tobacco industry

C 354/122

EN

Official Journal of the European Communities

19. 11. 98

(98/C 354/197)

WRITTEN QUESTION P-1762/98

by Werner Langen (PPE) to the Commission

(29 May 1998)

Subject: Price agreement between the French cigarette industry and the French Government

In November 1997 an additional 2.5% duty on tobacco was supposed to be introduced in France on financial and
health policy grounds. However, the government agreed with the French cigarette manufacturers on a minimum
consumption duty to be levied per unit of 1 000 cigarettes, thus removing the price advantage of multipacks. This
agreement was reached without consulting, for example, the Hamburg firm of Reemtsma, which, like some of its
competitors, sells various products on the French market.

The price declaration submitted by Reemtsma in relation to imports of two of its products (West and West Light,
in  packs  of  25)  was  rejected  by  the  French  Ministry  for  Economic  Affairs  and  Finance  by  reference  to  the
agreement reached with the domestic industry. Approval would be granted only if the price was substantially
raised.The two products were not included in the (cid:145)arrete· d(cid:146)homologation(cid:146) (official approval) issued at the end of
1997. There was no response to a further price declaration submitted on 28 January 1998. In a conversation early
in March, Reemtsma was quoted a price which would secure approval, but the company rejected that option on
market strategy grounds. Further conversations did not produce any progress.

Article 85 of the EC Treaty prohibits

(cid:145)agreements  between  undertakings  (...)  which  have  as  their  object  or  effect  the  prevention,  restriction  or
distortion of competition within the common market, and in particular those which:

(a)  directly or indirectly fix purchase or selling prices (....)(cid:146)

In view of the foregoing,

1.  Does  the  Commission  regard  this  direct  fixing  of  a  minimum  price  by  the  French  cigarette  industry,  by
agreement  with  the  French  Ministry  for  Economic  Affairs  and  Finance,  as  an  infringement  of  the
competition laws deriving from Article 3(g) of the EC Treaty in conjunction with Article 85? If so, what
steps will it take to remedy the situation?

2.  Does the Commission know the grounds on which the French Government permits and justifies this form of

horizontal cartel, by means of which the price or minimum price is directly fixed?

Answer given by Mr Van Miert on behalf of the Commission

(17 June 1998)

The Commission is conducting a detailed investigation of the problem raised by the Honourable Member and
will inform him of the outcome as soon as possible.

(98/C 354/198)

WRITTEN QUESTION E-1763/98

by Werner Langen (PPE) to the Council

(8 June 1998)

Subject: Price agreement between the French cigarette industry and the French Government

In November 1997 an additional 2.5% duty on tobacco was supposed to be introduced in France on financial and
health policy grounds. However, the government agreed with the French cigarette manufacturers on a minimum
consumption duty to be levied per unit of 1 000 cigarettes, thus removing the price advantage of multipacks. This
agreement was reached without consulting, for example, the Hamburg firm of Reemtsma, which, like some of its
competitors, sells various products on the French market.