1999/210/EC: Commission Decision of 14 October 1998 relating to a proceeding pursuant to Article 85 of the EC Treaty Case IV/F-3/33.708 - British Sugar plc, Case IV/F-3/33.709 - Tate & Lyle plc, Case IV/F-3/33.710 - Napier Brown & Company Ltd, Case IV/F-3/33.711 - James Budgett Sugars Ltd (notified under number C(1998) 3061) (Only the English text is authentic)
Date: 1998-10-14
Institutions: European Commission
Subjects: United Kingdom, common organisation of markets, fine, prices policy, restriction on competition, sugar industry

22.3.1999

EN

Official  Journal  of  the  European  Communities

L  76/1

II

(Acts  whose  publication  is  not  obligatory)

COMMISSION

COMMISSION  DECISION

of  14  October  1998

relating  to  a  proceeding  pursuant  to  Article  85  of  the  EC  Treaty

Case  IV/F-3/33.708  —  British  Sugar  plc,  Case  IV/F-3/33.709  —  Tate  &  Lyle  plc,  Case
IV/F-3/33.710  —  Napier  Brown  &  Company  Ltd,  Case  IV/F-3/33.711  —  James  Budgett
Sugars  Ltd

(notified  under  number  C(1998)  3061)

(Only  the  English  text  is  authentic)

(1999/210/EC)

TABLE  OF  CONTENTS

Paragraphs

I. 

INTRODUCTION  AND  PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1)-(2)

II.  FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)-(58)

A.  THE  PRODUCT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

B.  THE  COMMON  AGRICULTURAL  POLICY  SUGAR  SCHEME . . . . . . . . . . . . . .

(4)-(7)

C.  THE  UNDERTAKINGS  CONCERNED  AND  THEIR  POSITION  IN  THE
UNITED  KINGDOM  AND  IN  PARTICULAR  IN  GREAT  BRITAIN . . . . . . . . . .

(8)-(13)

1.  The  producers  of  sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)-(9)

1.1.  British  Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.2.  Tate  &  Lyle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)

(9)

2.  The  sugar  merchants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)-(13)

2.1.  Napier  Brown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.2.  James  Budgett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(12)

(13)

L  76/2

EN

Official  Journal  of  the  European  Communities

22.3.1999

Paragraphs

D.  PRODUCTION  AND  SUPPLY  OF  SUGAR  IN  THE  UNITED  KINGDOM  AND
SPECIFICALLY  IN  GREAT  BRITAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14)-(21)

1.  Market  shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(14)-(15)

2.  Imports  from  other  Member  States  into  the  United  Kingdom  and  specifically
into  Great  Britain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(16)-(21)

E.  THE  RELATIVE  COMPETITIVE  POSITIONS  OF  BRITISH  SUGAR,  TATE  &
LYLE,  NAPIER  BROWN  AND  JAMES  BUDGETT . . . . . . . . . . . . . . . . . . . . . . . . .

(22)-(23)

F.  FACTS  UNDERLYING  THE  INFRINGEMENT  OF  THE  COMPETITION
RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(24)-(57)

1.  Background  facts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(24)-(28)

2.  The  anti-competitive  conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(29)-(57)

2.1.  Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(29)

2.2.  Detailed  presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(30)-(57)

2.2.1.  Industrial  sugar  pricing,  in  particular  the  matrix . . . . . . . . . . . . . . .

(37)-(45)

2.2.2.  Retail  sugar  pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(46)-(48)

2.2.3.  The  availability  and  value  of  the  sugar-pricing  information . . . . . .

(49)

2.2.4.  Further  accounts  of  the  meetings . . . . . . . . . . . . . . . . . . . . . . . . . . .

(50)-(51)

2.2.5.  The  parties’  understanding  of  the  market  situation  during  the
relevant  period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(52)-(56)

2.2.6.  The  gap  between  institutional  price  increases  and  British  Sugar’s
price increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

G.  PARALLEL PROCEDURE BY THE UNITED KINGDOM (UK) OFFICE OF FAIR
TRADING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(57)

(58)

III.  LEGAL  ASSESSMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(59)-(184)

A.  DEFINITION  OF  THE  RELEVANT  MARKET . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(59)-(65)

1.  The  relevant  product  market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(59)

2.  The  relevant  geographical  market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(60)-(65)

B.  AGREEMENT 

BETWEEN
CONCERTED 
UNDERTAKINGS  WITH  THE  OBJECT  OR  EFFECT  OF  AN  APPRECIABLE
RESTRICTION  OF  COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PRACTICE 

AND/OR 

(66)-(154)

1.  The  Commission’s  assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(66)-(78)

1.1.  Agreement  and/or  concerted  practice  between  undertakings

. . . . . . . . . . .

(66)-(71)

1.2.  Object  or  effect  of  an  appreciable  restriction  of  competition . . . . . . . . . . .

(72)-(77)

1.2.1.  Pricing  coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(72)-(76)

1.2.2.  Appreciability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.3.  Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(77)

(78)

2.  The  arguments  of  the  parties  and  the  Commission’s  replies . . . . . . . . . . . . . . .

(79)-(154)

2.1.  No  agreement,  no  concerted  practice;  British  Sugar’s  price  leadership . . .

(79)-(97)

2.1.1.  British  Sugar’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(79)-(81)

2.1.2.  Tate  &  Lyle’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(82)-(83)

2.1.3.  Napier  Brown’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.1.4.  James  Budgett’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(84)

(85)

22.3.1999

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L  76/3

Paragraphs

2.1.5  The  Commission’s  replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(86)-(97)

(a)  British  Sugar’s  price  leadership . . . . . . . . . . . . . . . . . . . . . . . . . .

(86)-(88)

(b) Agreement  and/or  concerted  practice . . . . . . . . . . . . . . . . . . . . .

(89)-(97)

(aa)  The  significance  of  the  meetings . . . . . . . . . . . . . . . . . . . . .

(90)

(bb) Agreement and/or concerted practice between British Sugar
and  Tate  &  Lyle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(cc)  Agreement and/or concerted practice between British Sugar,
Tate  &  Lyle,  Napier  Brown  and  James  Budgett . . . . . . . .

(dd) Concerted  practice  without  proof  of  actual  effects . . . . . .

(91)-(92)

(93)-(94)

(95)-(97)

2.2.  The transparency of the sugar market; privileged information in advance of
other  sources;  the  value  of  the  pricing  information  provided  at  the
meetings;  the  function  of  the  meetings  and  their  anti-competitive  effect  on
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
the  market

(98)-(123)

2.2.1.  British  Sugar’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(98)-(108)

(a)  Industrial  sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(100)-(102)

(b) Retail sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(103)-(108)

2.2.2.  Tate  &  Lyle’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(109)-(113)

2.2.3.  Napier  Brown’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.2.4.  James  Budgett’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(114)

(115)

2.2.5.  The  Commission’s  replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(116)-(123)

(a)  The  relevance  of  effects  created  by  the  agreement  and/or
concerted  practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(116)-(119)

(b) The transparency of the sugar market; privileged information in
advance  of  other  sources;  the  value  of  the  pricing  information
provided  at  the  meetings;  the  function  of  the  meetings . . . . . .

(120)-(122)

(c)  Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(123)

2.3.  The  alleged  objects  of  the  meetings,  especially  the  undertakings . . . . . . . .

(124)-(154)

2.3.1.  British  Sugar’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(124)-(130)

(a)  The  undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(126)-(129)

(b) Other  objects  of  the  meetings . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.3.2.  Tate  &  Lyle’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.3.3.  Napier  Brown’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.3.4.  James  Budgett’s  arguments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(130)

(131)

(132)

(133)

2.3.5.  The  Commission’s  replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(134)-(154)

(a)  the  undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(135)-(152)

(aa)  The  participants  at  the  meetings . . . . . . . . . . . . . . . . . . . . .

(141)

(bb) The  chronology  of  events

. . . . . . . . . . . . . . . . . . . . . . . . . .

(142)-(143)

(cc)  The  subject  matter  of  the  meetings . . . . . . . . . . . . . . . . . . .

(144)-(148)

(dd) The  significance  of  the  compliance  programme . . . . . . . . .

(149)-(151)

(ee)  Alternative  methods  of  achieving  and  monitoring  the
implementation  of  the  undertakings . . . . . . . . . . . . . . . . . .

(b) the  other  explanations  for  the  meetings . . . . . . . . . . . . . . . . . . .

(c)  Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(152)

(153)

(154)

L  76/4

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Official  Journal  of  the  European  Communities

22.3.1999

Paragraphs

C.  APPRECIABLE  EFFECT  ON  TRADE  BETWEEN  MEMBER  STATES . . . . . . . . . .

(155)-(183)

1.  The  Commission’s  assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(155)-(168)

1.1.  The  wording  of  Article  85(1)  and  the  standards  set  by  the  Court . . . . . .

(155)-(158)

1.2.  The  assessment  of  this  case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(159)-(168)

1.2.1.  Industrial  sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(163)-(166)

1.2.2.  Retail sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(167)-(168)

2.  The  arguments  of  the  parties

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(169)-(175)

2.1.  British  Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(169)-(171)

2.2.  Tate  &  Lyle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.3.  Napier  Brown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(172)

(173)

2.4.  James  Budgett . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(174)-(175)

3.  The  Commission’s  replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(176)-(183)

D.  ARTICLE  85(3)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(184)

IV.  INAPPLICABILITY  OF  REGULATION  No  26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(185)-(188)

V.  ARTICLE  3  OF  REGULATION  No  17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(189)

VI.  ARTICLE  15(2)  OF  REGULATION  No  17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(190)-(217)

A. 

INTENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(191)-(292)

B.  GRAVITY  OF  THE  INFRINGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(193)-(198)

C.  DURATION  OF  THE  INFRINGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(199)-(202)

D.  AGGRAVATING  AND  ATTENUATING  FACTORS . . . . . . . . . . . . . . . . . . . . . . . .

(203)-(210)

1.  The  common  organisation  of  the  sugar  marker . . . . . . . . . . . . . . . . . . . . . . . . .

(203)-(205)

2.  British  Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(206)-(211)

E.  THE  COMMISSION  NOTICE  ON  THE  NON-IMPOSITION  OR  REDUCTION
OF  FINES  IN  CARTEL  CASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(212)-(218)

1.  All  four  parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(213)-(214)

2.  Tate  &  Lyle  in  particular . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(215)-(218)

COMMISSION  DECISION

22.3.1999

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L  76/5

THE  COMMISSION  OF  THE  EUROPEAN  COMMUNITIES,

Having  regard  to  the  Treaty  establishing  the  European
Community,

Having  regard  to  Council  Regulation  No  17  of  6
February 1962, First Regulation implementing Articles 85
and  86  of  the  Treaty (1),  as  last  amended  by  the  Act  of
Accession  of  Austria,  Finland  and  Sweden,  and  in
particular  Article  15(2)  thereof,

Having  regard  to  the  decision  taken  by  the  Commission
on  4  May  1992  to  initiate  proceedings  in  this  case,

Having given the undertakings concerned the opportunity
of  being  heard  on  the  matters  to  which  the  Commission
has  taken  objection,  in  accordance  with  Article  91(1)  of
Regulation  No  17  and  Commission  Regulation  No
99/63/EEC  of  25  July  1963  on  the  hearings  provided  for
in  Article  19(1)  and  (2)  of  Council  Regulation  No
17 (2),

After  having  consulted  the  Advisory  Committee  on
Restrictive  Practices  and  Dominant  Positions,

Whereas:

I.  INTRODUCTION  AND  PROCEDURE

(1) 

two 

This  Decision  is  concerned  with  the  coordination
by  the  two  sugar  manufacturers  in  Great  Britain,
British Sugar plc (hereinafter referred to as ‘British
Sugar’ (3))  and  Tate & Lyle  plc 
(hereinafter
‘Tate & Lyle’ (4)),  and 
sugar  merchants,
Napier  Brown & Company  Ltd 
(hereinafter
‘Napier  Brown’)  and  James  Budgett  Sugars  Ltd
(hereinafter ‘James Budgett’) of their pricing policy
for  industrial  white  granulated  sugar  in  Great
Britain.  It  is  also  concerned  with  the  coordination
by  the  two  sugar  manufacturers  of  their  pricing
policy  for  retail  white  granulated  sugar  in  Great
Britain.  The  period  during  which  the  infringement
took  place  (hereinafter  ‘the  relevant  period’)  was
between  20  June  1986  and  2  July  1990  with
respect  to  British  Sugar  and  Tate & Lyle,  and
between late 1986 and 2 July 1990 with respect to
Napier  Brown  and  James  Budgett.

(2) 

The  starting  point  of  the  Commission’s  procedure
in this case, and of a parallel procedure by the UK
Office  of  Fair  Trading  (OFT) (5),  is  with  two
self-incriminating  letters  which  Tate & Lyle  wrote
to  the  OFT  on  16  July  1990  and  on  29  August
1990.  On  4  May  1992,  the  Commission  initiated

proceedings  against 
four  abovementioned
the 
parties,  as  well  as  against  other  European  sugar
producers,  and  on  12  June  1992  the  Commission
sent  a  statement  of  objections  to  all  of  them.  This
initial  statement  of  objections  concerned  several
instances  of  anti-competitive  conduct  relating  to
the  sugar  trade 
in  the  United  Kingdom  and
infringing  Articles  85(1)  and  86  of  the  Treaty.  In
the  light  of  the  parties’  written  replies  and  the
submissions made at the oral hearing in relation to
the initial statement of objections, the Commission
decided  to  re-direct  its  case  and  to  concentrate  on
the  infringement  that  could  be  sustained  with  the
high  degree  of  proof  required  by  the  case-law  of
the Court of Justice of the European Communities.
Accordingly,  on  18  August  1995,  a  revised
statement  of  objections,  replacing  the  initial  one,
was  sent  to  the  parties.  this  Decision  takes  into
consideration  the  parties’  written  replies  to  the
revised  statement  of  objections,  their  submissions
made at the oral hearing on 18 and 19 April 1996
and thereafter, as well as the parties’ replies to the
initial 
their
submissions  at  the  oral  hearing  following  that
initial  statement  of  objections,  in  so  far  as  they
remain  relevant  in  relation  to  the  allegations  made
in  the  revised  statement  of  objections.

statement  of  objections 

and 

II.  FACTS

A.  THE  PRODUCT

(3) 

The  product  concerned  by  this  case  is  white
granulated sugar.

Sugar  is  produced  from  sugar  beet  or  sugar  cane.
With  the  exception  of  a  very  small  part  of  the
south  of  Spain  and 
the  French  overseas
departments,  sugar  cane  is  not  grown  in  the
Community.  For  the  purposes  of  this  Decision (6),
a  distinction  can  be  made  between  the  three  main
different  types  of  sugar:  white  granulated,  liquid
and speciality sugars.

are 

White  granulated  sugar,  which  is  often  simply
called  ‘white  sugar’,  is  the  final  product  after
processing  and  refining  beet  or  cane.  Different
qualities 
Community
identified 
Regulations (7).  The  standard  quality  is  EC  II
sugar. White granulated sugar represents by far the
most  important  part  of  the  sugar  production  and
consumption  in  the  Community  as  a  whole  and  in
the UK and Great Britain in particular (8). It is sold

in 

L  76/6

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22.3.1999

to  industry  (hereinafter  referred  to  as  ‘industrial
sugar’)  and  to  the  retail  trade  (hereinafter  referred
to  as  ‘retail  sugar’).

used 

sugars 

Liquid 
the
are  mainly 
food-processing industry. The highest quality liquid
sugar is made by dissolving white granulated sugar.
Lower  grades  are  made  only  from  cane,  by
blending  liquors  produced  at  various  stages  of  the
cane-sugar  refining  process.

in 

Speciality  sugars  consist  of  all  sugars  other  than
white  granulated.  This  category  includes  African,
Caribbean  and  Pacific  (ACP)  direct  consumption
raw,  brown  sugars,  caster  sugars,  icing  sugars  and
other  milled 
syrups  and
sugars,  and  also 
treacles (9).

(6) 

B.  THE  COMMON  AGRICULTURAL  POLICY
SUGAR  SCHEME

(4) 

The  sugar  scheme  of  the  common  agricultural
policy  is  designed  to  support  and  protect  the
production  of  sugar  within  the  Community.  Sugar
production  from  beet  and  cane  harvested  in  the
Community  is  restricted  by  means  of  national
quotas  (‘A’  and  ‘B’  quotas)  which  are  decided  by
the  Council.  In  principle,  these  quotas  have
remained  unchanged  since  1981.  The  quota
allocated  to  each  country  is  then  divided  amongst
the national sugar producers by the government in
question.

A  system  of  price  support  exists,  but  only  for  A/B
quota  sugar.  Any  sugar  produced  by  Community
undertakings  in  addition  to  their  A/B  quota  is
referred  to  as  ‘C’  sugar,  and  must  be  sold  on  the
world market — that is, to non-member countries,
without  support,  or  stored  for  at  least  12  months
and  used  as  part  of  the  following  years’  A/B
sugar.

(5) 

In  addition  to  A/B  sugar,  the  Community  provides
price  support  for  a  limited  amount  of  sugar
imported  pursuant  to  the  Lome´ Convention (10).
During  the  period  from  1986  to  1990,  total
preferential  imports  were  set  at  1 305 000  tonnes.
Almost  all  of  the  preferential  sugar  is  (and  was
during 
imported  by
relevant  period) 
Tate & Lyle in the form of partially processed cane
sugar,  which  is  then  further  refined  into  finished

the 

sugar  products.  Importers  and  refiners  of  ACP
cane  sugar  receive  a  margin  (‘the  institutional
margin’)  for  this  activity.  This  refining  margin,  is
set  in  a  manner  different  from  that  used  to
calculate the manufacturing margin fixed for sugar
produced  from  beet,  because  of  the  specific  nature
of  the  refining  operation.  During  the  relevant
period,  the  institutional  margin  for  sugar  refined
from cane was lower than the margin available for
the processing of beet sugar. As a result, during the
relevant  period,  the  refiners  of  preferential  cane
sugar  suffered  a  structural  margin  disadvantage
compared 
beet
processors (11).

Community’s 

the 

to 

for 

into 

receive 

the  Council 

Each  year 
fixes  a  number  of
institutional  prices  in  relation  to  the  purchase  of
sugar  beet  and  its  processing  and  sale,  the  most
important  of  which  is  the  intervention  price:  the
price  at  which  any  manufacturer  may  sell  his  A/B
sugar  to  national  intervention  boards.  Companies
selling 
the
intervention  will 
their  processed  sugar.
intervention  price 
However, no sugar has been sold into intervention
in  recent  years.  As  part  of  the  measures  to  ensure
that the sugar scheme is self-financing (12) a storage
levy is applied equally to all A/B sugar which is not
sold  into  intervention.  Intervention  price  plus  the
storage  levy  therefore  represent  the  guaranteed
minimum price for A/B sugar. This is known as the
effective  support  price.  Preferential  sugar  imported
pursuant  to  the  Lome´ Convention  does  not
participate 
storage  costs
reimbursement and therefore the storage levy is not
applied  to  it.

system  of 

the 

in 

imports  had  to  pay  a 

During  the  relevant  period,  the  Council  also  set  a
threshold  price.  This  was  the  price  at  which
non-quota  sugar  might  be  imported  from  third
countries.  Such 
levy
representing the difference between the free market
price on the world market and the threshold price.
Form  1  July  1995  onwards  (Uruguay  Round
implementation), 
levy  has  been
the  variable 
replaced  by  first  a  fixed  duty,  and  secondly  by  an
additional  duty  as  safeguard  clause  in  the  event  of
very  low  world  market  prices.

Community regulations therefore have the effect of
fixing  minimum  (intervention  plus  storage  levy)
prices  for  sugar  to  be  sold  in  the  Community.

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The  Council  also  fixes  minimum  prices  that  the
processors  must  pay  to  beet  growers  for  the  sugar
beet.

(7) 

Processors  of  beet  sugar  may  sell  A/B  sugar  freely
throughout  the  Community.  If  they  are  unable  to
sell  all  their  A/B  sugar  in  this  way  they  may  either
sell it into intervention or export it onto the world
market.  If  they  choose  the  latter  option  they
receive an export refund which is calculated on the
basis  of  a  tender  system.  Normally,  such  ‘selling
into  restitution’  is  more  attractive  than  selling  into
intervention (13).

(8) 

(9) 

C.  THE  UNDERTAKINGS  CONCERNED  AND
THEIR  POSITION  IN  THE  UNITED  KINGDOM
AND  SPECIFICALLY  IN  GREAT  BRITAIN

1.  The  producers  of  sugar  in  the  United
Kingdom

1.1.  British  Sugar

British  Sugar  is  the  sole  UK  processor  of  sugar
beet. The entire annual United Kingdom A/B sugar
quota of some 1,144 million tonnes is allocated to
it.  In  the  business  year  ending  on  30  September
1989,  British  Sugar’s  worldwide  turnover  in  all
products  was  GBP  677,6  million.  Between  1982
and 1990, British Sugar was a subsidiary of S & W
Berisford  plc (14).  It  was  acquired  by  Associated
British  Foods  plc (15)  in  December  1990/January
1991.

1.2.  Tate & Lyle

From  the  beginning  of  the  relevant  period  to  the
present day, the structure of the Tate & Lyle group
has  not  changed.  Tate & Lyle  is  the  ultimate
parent  company  of  the  group  whose  companies
operate  worldwide  in  different  sectors  of  the
economy.  Within 
group,  Tate & Lyle
this 
Industries  Ltd,  a  direct  subsidiary  of  Tate & Lyle
plc,  is  responsible  for  the  business  of  refining  cane
sugar  in  the  UK.  This  is  carried  out  by  its
operating  division,  Tate & Lyle  Sugars  (TLS).  The
overwhelming  majority  of  Community  imports  of
preferential  raw  cane  sugar  are  refined  by
Tate & Lyle  in  its  refineries  in  Great  Britain.  To
ensure its provision of raw cane sugar, Tate & Lyle
has  concluded  supply  contracts  with  a  number  of
ACP  producers  on  a  five-year  rolling  basis.  It  had
two  refineries  in  Great  Britain,  one  in  London
in  Scotland  (Greenock).
(Silvertown)  and  one 

Meanwhile,  the  refinery  in  Scotland  has  been
closed. Both refineries had been working at or near
to  full  capacity  since  the  financial  year  1982/83.
Besides  the  refining  of  sugar 
in  the  United
Kingdom, Tate & Lyle is a refiner of sugar in other
countries  including  Portugal,  the  USA,  Canada,
Australia  and  Zimbabwe.  It  is  furthermore  in  the
business of cereal sweeteners and starch production
in Europe and North America. In the business year
which ended on 30 September 1989, Tate & Lyle’s
worldwide group turnover in all products was GBP
3 359,9  million.

2.  The  sugar  merchants

(10)  During  the  relevant  period,  the  distribution  of
sugar  in  Great  Britain  was  performed  by  British
Sugar  and  Tate & Lyle,  by  one  Continental  sugar
producer  (De  Danske  Sukkerfabrikker)  through  an
exclusive  agent 
(Czarnikow  Ltd),  and  by
independent  merchants.  The  main  merchants  in
Great  Britain  were  Napier  Brown,  James  Budgett,
Billington  and  J.  M.  Thomas.

(11)  The  merchants  carry  out  business  in  two  forms:
‘nominal merchanting’ and ‘principal merchanting’.
In 
the
their  nominal  merchanting  business, 
merchants  act  as  agents  for  the  two  UK  producers
(British  Sugar  and  Tate & Lyle),  for  which  they
receive a fixed commission or fee. In this function,
they  take  care  of  order  processing,  invoicing  and
collecting  payments.  They  are  not  involved  in  the
price  negotiations,  which 
take  place  directly
between  the  producer  and  the  customer (16).  Even
though  this  activity  is  normally  not  very  attractive
financially,  it  does  provide  market  share  and
therefore  a  platform  for  selling  sugar  on  other
more  profitable 
terms  known  as  principal
merchanting (17).  In  this  business,  the  merchant
purchases  sugar  on  its  own  account  and  sells  it  in
its  own  name  fixing  the  terms  and  consequently
the  profit  for  itself.  The  sources  of  supply  for  the
principal  merchanting  business  are  the  two  UK
producers  and  imports.  The  merchants  engage  in
imports  on  their  own  account  and  in  their  own
name (18).  During  the  relevant  period,  Napier
Brown and James Budgett imported sugar from the
Continent. 
imported
Community  sugar  from  the  Republic  of  Ireland.

Budgett 

James 

also 

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2.1.  Napier  Brown

in  Great  Britain. 

(12)  Napier  Brown  is  the  largest  of  the  four  sugar
Its  nominal
merchants 
merchanting  business 
for  British  Sugar  and
Tate & Lyle  has  gradually  decreased  from  some
33 %  to  23 %  of 
its  total  granulated  sugar
business.  Its  principal  merchanting  business  has
varied  between  some  67 %  and  77 %.  During  the
business year which ended on 31 March 1990 and
ever since, Napier Brown has been a wholly owned
subsidiary  of  Napier  Brown  Holdings  Ltd  whose
activities  consist  of 
trading,  processing  and
packaging  of  sugar,  dried  fruits,  nuts  and  chilled
foods.  In  the  business  year  ending  on  31  March
1990,  Napier  Brown  attained  a  worldwide
turnover  in  all  products  of  GBP  258,2  million.

constitute some 10 % of its sugar business. During
the  business  year  ending  on  31  March  1990  and
ever  since,  the  majority  of  the  shares  in  James
Budgett have been owned by ED & F Man Ltd, the
world’s  largest  sugar  trader,  which  was  renamed
ED & F  Man  Group  plc  in  1994.  On  17  May
1989, Irish Sugar acquired 33,3 % of the shares in
James  Budgett.  At  the  same  date,  James  Budgett
became  the  exclusive  distributor  of  Irish  Sugar  in
Great  Britain.  On  10  August  1992,  James  Budgett
changed  its  name  from  James  Budgett & Son  Ltd
to  James  Budgett  Sugars  Ltd.  In  the  business  year
ending 31 March 1990, James Budgett’s worldwide
turnover  in  all  products  was  GBP  163,8  million.

2.2.  James  Budgett

D.  PRODUCTION  AND  SUPPLY  OF  SUGAR  IN
THE  UNITED  KINGDOM  AND  SPECIFICALLY  IN
GREAT  BRITAIN

(13) 

James  Budgett  is  the  second  largest  merchant  in
Great Britain. Its nominal merchanting business for
Tate & Lyle  and  British  Sugar  decreased  from
some 70 % of its total granulated sugar business in
1986  to  some  50 %  by  1990.  Its  principal
merchanting  business  with  sugar  from  the  two  UK
producers  has  over  the  same  period  of  time
increased  from  some  20 %  to  about  40 %.  Its
import business tripled between 1986 and 1990 to

1.  Market  shares

(14)  Supply  and  demand  for  sugar  in  the  UK  is  largely
in  balance,  and  has  been  during  the  relevant
period.  This  can  be  seen  from  the  following
table (19):

UK  sugar  market  availability/consumption  in  natural  state

(1 000  tonnes  of  white  sugar  equivalent)

Campaign  years  (1  October  to  30  September)

1986/87

1987/88

1988/89

1989/90

Total  production

1 318

1 226

1 304

1 264

of  which  C  to  be  exported

(quota  British  Sugar  =  1 144)

Production available

Variation  of  stocks

Imports  from  ACP  countries

Imports  from  other  third  countries

Imports  from  Member  States

Total  sugar  available

Exports  to  third  countries

Exports  to  Member  States

− 174

1 144

− 57

1 167

1

88

2 343

− 85

− 29

− 82

1 144

+ 43

1 214

—

110

2 511

− 178

− 75

− 160

1 144

+ 24

1 194

—

132

2 494

− 121

− 78

− 120

1 144

+ 30

1 139

—

153

2 466

− 135

− 37

National  consumption

2 229

2 258

2 295

2 294

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The  table  expresses  all  figures  in  ‘white  sugar
equivalent’ (WSE) which covers all kinds of sugars
including  in  particular  the  main  three  categories,
i. e.  white  granulated  sugar,  liquid  sugar  and
speciality sugar (20) and which applies a conversion
factor  to  all  types  of  sugar  which  are  not  white
granulated.  With  regard  to  the  figures  for  imports
from  other  Member  States,  which  are  most
important  for  the  present  case,  it  is  uncontested
that  the  vast  majority  of  these  imports  enter  the
UK  as  white  granulated  sugar  in  the  form  of  bulk
(tanker),  50  kilogram  bags  or  retail  packets.

hinder  the  application  of  these  findings  on  the
market  in  Great  Britain.  In  the  market  in  Great
Britain,  the  sugar  price  is  somewhat  higher  than
the  current  price 
in  markets  of  neighbouring
Member States. This is due to the costs incurred in
transporting sugar across the English Channel. It is
also  due  to  the  fact  that,  in  order  to  secure  a
substantial  volume  of 
imports,  a  considerably
higher  price  is  necessary  in  Great  Britain  than  on
the  Continent  because  potential  exporters  may
require  a  significant  premium  to  persuade  them  to
export  large  quantities  of  sugar  to  Great  Britain
for  fear  of  retaliatory  exports  by  the  British
producers (28).

(15)  British  Sugar  and  Tate & Lyle  have,  during  the
relevant period, produced between them more than
90 % of the sugar supplied in the United Kingdom.
Market  shares  in  the  United  Kingdom  have  been
stable  during  the  relevant  period (21).  If  one
considers  the  market  for  granulated  sugar  as  a
whole,  British  Sugar  has  held  a  share  of  between
51 %  and  54 %  between  1986/87  and  1989/90,
Tate & Lyle  has  held  between  38 %  and  40 %,
retail sales by Napier Brown have accounted for an
overall  [deleted,  business  secret] %  of  the  market,
and  imports  have  accounted  for  between  6 %  and
8 % (22). The sources of these imports were mainly
Denmark,  France  and  Ireland.  Imports  from  all  of
these  three  countries,  and 
in  particular  from
Denmark  and  France,  increased  between  1986/87
and  1989/90 (23).

2.  Imports  from  other  Member  States  into  the
United  Kingdom  and  specifically  into  Great
Britain

it 

followed 

(16)  British  Sugar  has  confirmed (24)  that,  during  the
relevant  period, 
the  policy  of
attempting  to  set  its  prices  just  below  the  level  at
which  Continental  sugar  producers  would  export
significant  quantities  of  sugar  to  the  United
Kingdom, thus threatening British Sugar’s ability to
sell  its  entire  A/B  sugar  quota  in  the  UK.  This
statement is accepted by all the other parties to this
proceeding  and 
it  matches  the  Commission’s
findings  in  its  Napier  Brown  decision (25).  While
most of these sources mention the United Kingdom
as such, the findings are in particular true of Great
Britain.  The  fact  that  in  some  respects  different
conditions prevail in Northern Ireland (27) does not

Sugar 

informing  them  that 

(17)  During  the  relevant  period,  Tate & Lyle  adopted
an active policy of attempting to deter imports (29).
It  contacted  all  the  major  Continental  sugar
producers  that  had  traditionally  sold  significant
quantities  of  sugar  in  Great  Britain:  Be´ghin-Say
and  De  Danske
(France), 
Irish 
Sukkerfabrikker, 
if  they
decided  to  export  larger  amounts  of  sugar  to  the
United  Kingdom  than  had  traditionally  been  the
case,  Tate & Lyle  would  react  by  selling  larger
quantities into their home markets (30). The reason
for  this  policy  to  sell  its  entire  A/B  quota  on  the
United  Kingdom  market (31), and that, as the price
was  in  1984  to  1986  had  shown,  if  necessary
British  Sugar  was  willing  and  able  to  drop  its
prices  to  do  so.  As  United  Kingdom  production
and  consumption  during  the  relevant  period  were
largely in balance, it follows that if imports of A/B
sugar 
successfully
the  Continent  were 
marketed  in  the  United  Kingdom,  a  quantity
similar to the amount imported had to be exported
by one of the two UK producers to other Member
States,  or 
into
intervention (32).  In  a  renewed  price  war  in  which
both UK producers (British Sugar and Tate & Lyle)
would  have  tried  to  sell  their  traditional  quantity
imports,
in  the  UK  market 
Tate & Lyle would have been in a weaker position
than  British  Sugar.  Moreover,  in  the  absence  of
such  a  price  war,  sales  in  the  UK  market  were  for
both UK producers more profitable than exporting
to  other  Member  States  or  selling  into  restitution
or  intervention.  Against  this  backdrop,  it  was
Tate & Lyle’s  particular  interest  to  deter  as  many
imports  as  possible.

in  spite  of  the 

restitution  or 

from 

sold 

into 

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As  in  recital  16  the  description  and  analysis  made
for  the  United  Kingdom  in  relation  to  other
Member  States  also  applies  mutatis  mutandis  to
Great  Britain  in  relation  to  the  other  Member
States.

1985/86  is  137 000  tonnes.  The  increase  between
1985/86  and  1989/90  is  11,7 %.  The  vast  bulk  of
the sugar imported from other Member States into
the  UK  was  white  granulated  sugar.

(18)  A  number  of  factors  contributed  in  the  relevant
period,  and  continue  to  contribute,  to  limiting
imports  into  the  sugar  market  of  the  UK  as  a
whole,  and  of  Great  Britain  in  particular.  Many
customers  require  frequent  and  rapid  (just-in-time)
deliveries (33),  as  well  as  guaranteed  and  regular
deliveries (34).  Meeting  such  needs  with  deliveries
from  Continental  supply  points  is  an  unlikely
option. Continental producers willing to meet such
requirements  would  therefore  need  to  invest  in
distribution  facilities  based  in  Great  Britain (35).

(19)  Traditionally, imports of approximately 4 to 10 %
of  national  consumption  do  enter  the  United
Kingdom  each  year.  This  is  because  many  of  the
larger customers wish to maintain a further source
of  supplies  from  Continental  EC  producers (36),
first  as  a  bargaining  tool  when  engaging  in  price
discussions  with  the  domestic  British  producers,
and  second  to  provide  a  mechanism  that  might
assist  them  in  obtaining  alternative  supplies  in  the
event  of  a  shortage  of  domestic  sugar,  due  for
example  to  crop  failure (37).  Such  sugar  is  either
ordered  direct  from  the  Continental  producer  by
the company in question or acquired via merchant.
Merchants  therefore  purchase  Continental  sugar
for  that  reason,  and  also  to  act  as  a  bargaining
tool when they enter discussions with the domestic
suppliers  for  the  sugar  they  wish  to  purchase  for
their  principal  merchanting  activities,  for  which
they  are  to  a  large  extent  dependent  on  the
domestic  suppliers.  Additionally,  sugar  is  imported
by the merchants during periods when Continental
sugar  is  cheaper  than  domestic  sugar,  which  may
occur  in  particular  for  rather  limited  periods  due
to  currency  fluctuations (38).

(20)  During the sugar campaign years (1 October to 30
the  relevant  period,
September)  which  cover 
imports  of  sugar  from  other  Member  States  into
the  UK  increased  form  88 000  tonnes  in  1986/87
to  110 000  tonnes  in  1987/88,  then  132 200
tonnes  in  1988/89  to  finally  153 00  tonnes  in
1989/90.  This 
increase  of  73,9 %,
representing  an  increase  of  the  import  share  in  the
total national consumption from 3,9 % in 1986/87
to  6,7 %  in  1989/90 (39).  The  import  figure  for

is  an 

(21) 

In the calendar years from 1986 to 1990 inclusive,
Napier  Brown’s  imports  of  white  sugar  into  the
UK  increased  by  60 % (40).  In  the  calendar  years
from 1 January 1986 to 31 December 1990, James
Budgett’s  imports  of  sugar  in  the  UK  nearly
trebled (41).

E.  THE  RELATIVE  COMPETITIVE  POSITIONS  OF
BRITISH  SUGAR,  TATE & LYLE,  NAPIER  BROWN
AND  JAMES  BUDGETT

(22)  Due  to  the  specific  characteristics  of  the  common
agricultural  policy (42),  British  Sugar,  being  a
beet-sugar  processor,  has  benefited  during  the
relevant  period 
from  a  built-in  advantage
compared  to  the  cane-refiner  Tate & Lyle,  because
it  has  received  a  higher  margin  for  the  sugar  it
produced  and  sold.  As  a  consequence  of  this  it  is
widely accepted (43), and the Commission takes the
view,  that  British  Sugar  during  the  relevant  period
was  the  price  leader  on  the  markets  for  sugar
(including white granulated sugar) in Great Britain,
and  that  Tate & Lyle  was  a  price  follower  of
British  Sugar  on  this  market.  The  fact  that  British
Sugar had the decisive influence in determining the
price  level  was  also  apparent  in  the  price  war
between  1984  and  1986 (44).  However,  as  will  be
shown,  British  Sugar’s  position  as  a  price  leader
did not preclude competition by Tate & Lyle in the
markets  for  industrial  and  retail  sugar  in  Great
Britain,  which  for  the  purpose  of  the  present  case
are  the  markets  relevant  to  the  relationship
between  these  two  companies (45).

(23)  Napier  Brown  and  James  Budgett  were  also  to  a
large extent price followers of British Sugar (46)  on
the  sugar  markets  (including  white  granulated
sugar)  in  Great  Britain  during  the  relevant  period.
British  Sugar  has  confirmed  that  during  the
relevant period its policy has been to attempt to set
its prices just below the level at which Continental
sugar producers would export significant quantities
of  sugar  to  the  UK,  thereby  threatening  British
Sugar’s  ability  to  sell  its  entire  A/B  sugar  quota  in
the  UK (47).  In  such  circumstances,  Napier  Brown
and James Budgett were dependent on the two UK
sugar  producers  (British  Sugar  and  Tate & Lyle)
for a significant part of the sugar that they sold in

22.3.1999

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tool (48).  Thus 

their  capacities  either  as  principal  or  nominal
merchants,  although 
imports  allowed  them  a
certain  margin  and  could  have  been  used  as  a
the  pricing  policy
bargaining 
options  available  to  them,  including  those  for
white  granulated  sugar,  were  to  a  large  extent
dependent  on  the  pricing  decisions  of  their  major
supplies.  However,  as  will  be  shown,  British
Sugar’s  price 
leadership  did  not  preclude
competition  by  Napier  Brown  and  James  Budgett
against  British  Sugar  or  Tate & Lyle  on  the
industrial sugar market in Great Britain, which for
the  purpose  of  the  present  case,  is  the  market
relevant  to  the  relationship  between  all  four
parties (49).

F.  FACTS  UNDERLYING  THE  INFRINGEMENT  OF
THE  COMPETITION  RULES

1.  Background  facts

(27) 

(24)  Between 1984 and 1986 a price war took place on
the  sugar  market  in  Great  Britain,  including  the
for  white  granulated  sugar (50).  This
market 
resulted  largely  from  an  aggressive  pricing  strategy
adopted  by  British  Sugar 
in  an  attempt  to
maximise  its  sugar  sales  in  Great  Britain.  The
consequence  was  to  drive  prices  down  to  very  low
levels.

(25) 

In  1988,  the  Commission  acting  on  a  formal
complaint,  adopted  a  decision (51)  pursuant  to
Article  86  of  the  Treaty,  finding  that  British  Sugar
had  abused  the  dominant  position  that  it  held  on
the markets for industrial and retail sugar in Great
Britain.  The  practices  pursued  by  British  Sugar,
found  to  be  an 
infringement  of  Article  86,
consisted  of  a  number  of  actions  intended  to
remove  Napier  Brown  from  the  market  for  retail
white  granulated 
sugar.  This  Decision  was
preceded  by  an  interim  measures  statement  of
objections  which  was  sent  to  British  Sugar  on  8
July 1986 and which sought the termination of the
infringement  of  Article  86.

(26)  On  5  August  1986,  British  Sugar  wrote  to  the
Commission  offering  undertakings  which  were
intended  to  terminate  the  practices  which  the
Commission 
interim
measures statement of objections had considered to
be  infringements  of  the  Community  competition
the
Commission 
rules. 

its  abovementioned 

accepted 

The 

in 

undertakings  by  letter  of  7  August  1986.  Of
particular  relevance  to  the  present  proceeding  is
the  following  undertaking:

‘(C)  British  Sugar  accepts  the  need  for  sugar
merchants  and  believes  that  they  have  a  useful
function  to  perform  in  the  UK  market.  British
Sugar  has  no  intention  now  or  in  the  future  of
undertaking any pricing practice which may in any
way  damage  the  continued  existence  of  the
merchants.

British Sugar undertakes to the Commission that it
will  engage  in  normal  and  reasonable  pricing
practices  which  can  in  no  way  be  construed  as
the
predatory. 
Commission’s  concern  that  an  insufficient  margin
between  its  price  for  industrial  sugar  and  its  price
for  retail  sugar  might  be  considered  to  be  an
unreasonable  pricing  practice.’ (52).

recognises 

British 

Sugar 

law 

intended 

that 
it 
competition 

In  October  1986,  British  Sugar  informed  the
to  adopt  a
Commission 
Community 
compliance
programme.  This  programme,  which  was  adopted
in  December  1986,  describes 
the  particular
responsibilities  of  a  dominant  firm,  but  also  sets
out in detail the obligations that flow from Article
85(1).  Of  particular  relevance  to  the  present
proceeding 
the
compliance programme:

section  of 

following 

the 

is 

‘Article  85(1)  Anti-competitive  agreements

(. . .)  Agreements  or  concerted  practices  fixing
prices,  limiting  production  or  markets,  sharing
markets,  collective  boycotts  of  actual  or  potential
customers  or  suppliers  and  tie-in  agreements,  are
all,  for  instance,  prohibited.

practices 

(. . .)  Article  85(1)  also  prohibits  agreements  or
of
for 
concerted 
information  between  competitors  about  prices,
trading  terms,  credit  notes,  discounts  and  so  on,
and  may  even  apply  where  such  information  is
given unilaterally.

exchange 

the 

the 

company 

laws 
to 

(. . .)  In  line  with  its  policy  of  complying  with  all
applicable 
therefore
the  EEC
committed 
competition rules and will take every step to ensure
observance  of  that  policy.  It  is  also  the  company’s
policy  not  only  to  observe  the  law  but  to  go
beyond  mere  compliance  with  the  strict  letter  of

compliance  with 

is 

L  76/12

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22.3.1999

the law and  seek  to  avoid  any conduct  which may
give rise to doubt as to whether or not it has acted
lawfully.’ (53).

(28)  The  provision  of 

the  undertakings  and 

the
adoption of the compliance programme were taken
into  account  by  the  Commission  in  its  Napier
Brown  Decision  of  1988 (54)  as  mitigating  factors
when  setting  the  fine,  which  was  fixed  at  ECU  3
million.

2.  The  anti-competitive  conduct

2.1.  Summary

(29)  The 

facts  and 

evidence 

compiled  by 

the

Commission  demonstrate  that:

(b) with  regard  to  retail  sugar,  British  Sugar
informed  Tate & Lyle  at  the  meeting  of  20
June 1986 that in this business it also intended
to cease the low-pricing policy, which had been
designed  to  increase  market  share,  and  that  it
now  intended  to  increase  the  price  level  in
Great  Britain.  Subsequently,  between  25
February 1987 and 9 May 1990, eight meetings
concerning  retail  sugar  took  place  between  the
two companies. In the course of at least two of
these  meetings,  British 
to
Tate & Lyle a copy of its new retail price list a
few  days  before  it  was  officially  circulated  to
the  trade.  During  their  meetings,  the  two
respective
companies  also  discussed 
discount 
retail
policies 
customers.  However,  there  is  not  sufficient
evidence 
informed
British 
Tate & Lyle of any specific price or discount to
be applied to a specific customer. Furthermore,
British  Sugar  signalled  retail  price  rises  to
Tate & Lyle  at  least  two  or  three  weeks  before
the  new  written  price  list  had  been  produced
and  could  have  been  circulated  to  the  trade.

towards 

larger 

Sugar 

Sugar 

their 

gave 

that 

(a)  as  regards 

intervals 

throughout 

industrial  sugar,  British  Sugar
informed  Tate & Lyle  at  a  meeting  of  20  June
1986,  and  also  informed  Napier  Brown  and
James  Budgett  at  a  subsequent  meting  which
took  place  before  the  end  of  1986,  of  its
intention  to  end  the  sugar  price  war  and  to
cease  the  low  pricing  policy,  which  had  been
designed  to  increase  market  share,  and  of  its
intention  to  increase  the  price  level  in  Great
Britain. Tate & Lyle  confirmed  that  it  intended
to  follow  this  pricing  policy.  After  the  bilateral
meeting  of  20  June  1986,  18  meetings  about
industrial  sugar  between  all  four  parties  took
place  at  regular 
the
relevant  period  up  to  13  June  1990.  During
informed
these  meetings,  British 
Tate & Lyle,  Napier  Brown  and  James  Budgett
of  the  price  increases  it  intended  to  seek  to
obtain  with  respect  to  industrial  sugar.  This
was  done  by  reference  to  a  ‘pricing  matrix’
target  pricing
specifying  British 
according  to  volume  of  purchases.  Owing  to
this  structure,  the  matrix  necessarily  also
indicated 
the  price  differentials  between
purchasers  of  larger  and  of  smaller  quantities
of industrial sugar. At least once, a copy of the
written  matrix  was  supplied  to  Tate & Lyle,
Napier Brown and James Budgett, and at other
meetings information of a similar nature to that
contained in the matrix was supplied by British
Sugar  also  made  indications  to  the  other  three
companies  of  its  intention  to  change  some  or
all  list  prices,  at  times  as  much  as  nine  months
ahead  of  the  actual  change.

Sugar’s 

Sugar 

2.2.  Detailed  presentation

(30)  Almost  two  months  prior  to  writing  to  the
Commission  formally  offering  undertakings,  the
then  Chairman  of  S & W  Berisford  telephoned  the
chairman of Tate & Lyle on 17 and 18 June 1986,
informing  him  that  the  senior  management  of
British Sugar was going to be changed imminently,
and  suggesting  a  meeting  with  Tate & Lyle  to
introduce  British  Sugar’s  new  team (55).  Such  a
meeting  was  held  between  the  senior  management
of the two companies on 20 June 1986. During the
meeting,  British  Sugar  informed  Tate & Lyle  of  its
decision to end the sugar price war which had been
based  on  low  pricing  designed  to  increase  market
share.  The  following  is  an  extract  of  the  letter
written  by  a  director  of  Tate & Lyle  of  the  Office
of  Fair  Trading  on  29  August  1990,  of  which  the
Commission  obtained  a  copy,  setting  out  his
company’s understanding of what happened during
that  meeting (56):

‘The  Tate & Lyle  representatives  came  away  with
the understanding that the price war that had been
going  on  for  some  two  years  would  cease.  It  was
also  understood  that  the  retail  market  shares
enjoyed  by  Tate & Lyle  and  British  Sugar  at  that
moment  should  remain  and  that  neither  party

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tonnes 

into 
implication  of 

would  price  in  an  aggressive  manner.  It  was  also
accepted  by  Tate & Lyle  that  British  Sugar  could
not  be  prevented  from  putting  their  full  A  +  B
quota  of  1 144 000 
the  United
these
Kingdom  market.  The 
discussions,  as  understood  by  Tate & Lyle,  was
that British Sugar would not disturb the market by
importing  sugar  because  to  do  so  would  be  to
restart  the  price  war,  since  the  market  was  in
balance.  In  order  to  give  these  matters  commercial
substance,  Mr  Pepler  for  Tate & Lyle  Sugars
carried  the  message  back  to  his  staff  that  they
should  not  cut  prices  so  as  to  try  to  gain  market
share  from  British  Sugar.

This  meeting  was  significant  in  that  it  set  the
background  principles  against  which  all  future
discussions  were  held.’ (57).

(31)  According  to  both  British  Sugar  and  Tate & Lyle,
this  statement  does  not  mean  that  the  companies
agreed  to  fix  prices,  market  shares  or  to  take  a
common  position  regarding  imports.  In  a  joint
memorandum submitted by both British Sugar and
Tate & Lyle  to  the  Office  of  Fair  Trading (58)  the
parties  gave  their  common  understanding  of  what
took place. The relevant part of this memorandum
states  the  following:

‘4  BS  announced  at  a  meeting  on  20  June  1986
that  the  price  war  then  current  in  the  United
Kingdom  sugar  market,  resulting  from  BS’s  then
commercial  policy,  would  cease.  In  the  context  of
the  ongoing  EEC  Commission  investigation  into
the  affairs  of  BS  pursuant  to  the  Napier  Brown
Decision,  BS  was  concerned  to  ensure  that  there
was no further possibility of BS engaging in a form
of  pricing  policy  which  could  give  rise  to  a
complaint  to  the  EEC  Commission  or  the  OFT  of
predatory  pricing  or  other  such  abuses  of  its
dominant  position.  Both  TLS  and  British  Sugar
believed  that  as  a  consequence  of  the  unilateral
decision  taken  by  British  Sugar  to  end  the  price
war:

(a)  retail  market  shares  would  tend  to  remain  at
around  the  level  the  parties  believed  existed  at

the time of the making of the announcement by
British  sugar;  and  further  to  that  end;

(b) British Sugar would not price aggressively with
the result that TLS would not price aggressively
although  there  would  nevertheless  still  be  a
band of tolerance in relation to their respective
market  shares.

During  the  arrangement,  BS  informed  TLS,  before
it  made  a  general  announcement  to  its  customers,
of  changes  in  list  prices,  and  discount  policy,
although  TLS  was  not  informed  of  any  specific
price  or  discount  which  was  to  be  quoted  to  a
specific  customer.  Prior  to  TLS  being  given  any
such  information  all  major  customers  of  BS  would
have  known  of  its  general  intentions  as  to  the
order  of  magnitude  of  its  price  increases  for  the
relevant  period.  At  times  the  parties  would  be  in
contact  about  whether  their  shares  in  the  retail
market  were  within  the  band  of  tolerance.’ (59).

(32)  Subsequent  to  the  meeting  between  British  Sugar
and  Tate & Lyle  on  20  June  1986,  British  Sugar
held  a  series  of  meetings  up  to  and  including  13
June  1990  with  Tate & Lyle,  together  in  some
cases  with  Napier  Brown  and  James  Budgett.
Tate & Lyle  provided  a  list  of  the  meetings  of
which it is aware to the Commission (60). This was
drawn  up  on  the  basis  of  the  diary  records  of  its
employees.  In  detail,  the  list  states  the  date,  the
individual  participants  and  the  company  to  which
they  belong,  the  venue  and  the  topic  discussed  at
each  meeting.

(33)  A  total  of  40  meetings  are  detailed  in  the  list
provided  by  Tate & Lyle.  British  Sugar,  Napier
Brown and James Budgett accept that the meetings
took place and they also accept that these meetings
took  place  as  described  and  detailed  in  the  list
provided  by  Tate & Lyle (61). 
list,
Tate & Lyle has indicated that there is doubt as to
whether the meeting of 5 November 1987 actually
took place. Apart from specifying the venue where
the meetings took place, the list gives the following
information.

this 

In 

L  76/14

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Official  Journal  of  the  European  Communities

22.3.1999

Date

1986
20  June  1986
(3  or  4  weeks  later)
16  September  1986
(exact  date  not  known)

1987
5  February  1987
25  February  1987
26  March  1987
15  June  1987
24  June  1987
29  June  1987
6  July  1987
29  July  1987
15  September  1987
7  October  1987
20  October  1987
5  November  1987  (?)

1988
7  January  1988
25  January  1988
27  January  1988
8  March  1988
20  April  1988
11  May  1988
4  August  1988
14  September  1988
3  October  1988
23  November  1988

1989
13  February  1989
30  May  1989
6  June  1989
19  June  1989

29  August  1989
17  October  1989
16  November  1989
14  December  1989

1990
8  February  1990
12  February  1990
21  February  1990
9  May  1990
12  June  1990
13  June  1990

Companies  who  had  one  or  more
representatives  participating  in  the
meeting

BS  =  British  Sugar

TL =  Tate  &  Lyle

NB =  Napier  Brown

JB  =  James  Budgett

BS,  TL
BS,  TL
BS,  TL
BS,  TL,  NB,  JB

BS,  TL,  NB,  JB
BS,  TL
BS,  TL
BS,  TL,  NB,  JB
BS,  TL
BS,  TL
BS,  TL,  NB,  JB
BS,  TL,  NB,  JB
BS,  TL,  NB,  JB
BS,  TL,  NB,  JB
BS,  TL,  NB,  JB
BS  (?),  TL  (?)

BS,  TL,  NB,  JB
BS,  TL
BS,  TL
BS,  TL,  NB,  JB
BS,  TL
BS,  TL,  NB,  JB
BS,  TL,  NB,  JB
BS,  TL
BS,  TL,  NB,  JB
BS,  TL

BS,  TL
BS,  TL,  JB
BS,  TL
BS,  TL,  NB,  JB

BS,  TL
BS,  TL
BS,  TL,  NB,  JB
BS,  TL,  NB,  JB

BS,  TL,  NB,  JB
BS,  TL
BS,  TL
BS,  TL
BS,  TL
BS,  TL,  NB,  JB

Topic

background  meeting
background  meeting
general market
industrial

industrial
general/retail
retail
industrial
general
general
industrial
industrial
industrial
industrial
industrial
general  (?)

industrial
general
retail
industrial
general
industrial
industrial
retail
industrial
general

general/imports
imports/exports
retail
industrial/institutional
price  changes
imports/exports
retail
industrial
industrial

industrial
retail
general
retail
industrial
industrial

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(34)  The subject matter of the meetings breaks down as

follows:

—  background  meeting:

—  general market:

—  industrial:

—  industrial/institutional  price  changes:

—  general/retail:

—  retail:

—  general/imports

—  imports/exports:

2

8

18

1

1

7

1

2.

Views  were  exchanged  between  the  companies  as
to the minimum prices which British Sugar wanted
to  achieve  in  the  industrial  and  retail  markets  and
the  likely  phasing  of  price  increases.  Tate & Lyle
stressed  that  its  commercial  policy  was  both  to
follow  British  Sugar’s  price  leadership  and  to
defend  its  then  market  share  of  around  one  third
of  the  retail  market.  British  Sugar  subsequently
introduced  industrial  and  retail  price  increases  in
the  United  Kingdom  during  the  summer  of  1986,
and  Tate & Lyle 
substantially
similar  increases.  Tate & Lyle  understood  that  it
could not prevent British Sugar selling the whole of
its A and B quota in the United Kingdom, and that
British  Sugar  would  not  import  sugar  into  this
country.

followed  with 

sugar 

in  which  all 

(35)  The list shows that — apart from the first bilateral
meeting between British Sugar and Tate & Lyle on
20  June  1986  —  there  were  18  meetings  about
industrial 
four  parties
participated  —  that  is,  17  meetings  under  the
heading  ‘industrial’  and  one  under  the  heading
‘industrial/institutional  price  changes’.  As  to  the
first  quadripartite  meeting  (between  British  Sugar,
Tate & Lyle,  Napier  Brown,  James  Budgett)  on
industrial  sugar,  it  is  recorded  on  the  list,  and  it  is
uncontested, that it took place in late 1986, which
means after 16 September 1986 and before the end
of  1986.

As  to  retail  sugar,  there  were  —  apart  from  the
first  bilateral  meeting  of  20  June  1986  —  eight
meetings  between  British  Sugar  and  Tate & Lyle:
seen  under  the  heading  ‘retail’  and  one  under  the
heading ‘general/retail’.

three 

two  or 

As  regards  sales  of  sugar  in  the  industrial  market,
it appears that since that time meetings have taken
times  a  year  between
place 
representatives  of  British  Sugar  and  Tate & Lyle.
At some of these meetings, British Sugar tabled the
minimum  net  prices  to  customers 
in  various
volume  bands  it  intended  to  achieve  over  the
coming  year.  This  matrix  and  other  matters
relating 
the  subject  of
communication  between  the  companies  and  also
representatives of Napier Brown and Budgetts. The
timing  of  changes  in  list  prices,  and  the  content  of
such  changes,  has  also  been  the  subject  of
communication as have matters such as drop sizes,
customer  credit-worthiness,  etc.  It  also  appears
that 
exchanged
between the companies about the volume discounts
being  applied  to  specific  customers.

to  prices,  has  been 

information  was 

sometimes 

The  other  meetings  listed  are  not  relevant  for  this
case.

(. . .)

(36) 

In  a  letter  dated  16  July  1996 (62)  to  the  Office  of
Fair Trading from the chairman of Tate & Lyle, of
which 
copy,
Tate & Lyle  set  out 
its  understanding  of  the
meetings:

the  Commission  obtained 

a 

‘Certain  meetings  took  place,  at  which  British
Sugar  indicated  its  paramount  commercial  and
political  requirement  to  sell  all  its  A  and  B  quota
sugar  in  the  United  Kingdom.  They  also  indicated
their desire to see United Kingdom price levels rise
from the low levels that they had by then reached,
and  also  to  see  differentials  between  customers
taking  different  volumes  restored  to  more  sensible
and  logical  levels.  As  a  price  follower,  and  given
the  parlous  state  of  the  cane  refining  business,
Tate & Lyle  had  little  commercial  alternative  to
falling  in  with  British  Sugar’s  new  pricing  policy.

As  regards  retail  prices  there  have  also  been
contacts  between  the  companies,  in  which  British
Sugar indicated the dates and timing of increases in
its  retail  price  list.  In  connection  with  customer
negotiations 
information  has  been  exchanged
about  changes  in  the  discounts  that  would  be
offered to some of the larger customers (who took
supplies  from  both  companies).  Tate & Lyle  has
consistently  made  it  clear  that  it  would  defend  its
one-third  share  of  the  retail  market  and  has  made
every  effort  to  prevent  British  Sugar  from  eroding
in  Tate & Lyle’s
that  share.  It  has  not  been 
commercial 
interests  to  attack  British  Sugar’s
market  position,  nor  undermine  British  Sugar’s
commercial objective of improving its returns from
the  United  Kingdom  sugar  market (63).’

L  76/16

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2.2.1.  Industrial  sugar  pricing,  and  in  particular

the  matrix

(37) 

In  an  annex  to  the  abovementioned  letter  of  16
July  1990,  Tate & Lyle  provided  a  copy  of  a
pricing  matrix  handed  to  Tate & Lyle  by  British
Sugar  during  a  meeting  held  in  1989.  This  matrix,
which  concerns  industrial  sugar  only,  sets  out
British Sugar’s target price on a quarterly basis for
the  1990  calendar  year,  broken  down  into  10
columns  according  to  the  tonnage  purchased.

(38)  Whilst  British  Sugar  believes  that  the  matrix  was
handed  over  during  only  one  meeting 
they
accept (64)  that  ‘on  all  the  other  occasions,  I  think
we admit, I don’t think we’ve anything to fear, the
matrix was discussed in general terms but we have
found  no 
instance  where  another  printed  or
written  document  was  handed  to  Tate’s  or  the
merchants’ (65). During investigations carried out at
British  Sugar,  a  representative  of  the  company
stated (66)  ‘what  we  would  normally  do  is  just
announce that we were attempting to move, if you
like,  the  50 000  tonne  band  by  a  certain  amount
and  thereafter  an  increase  for  the  balance  lower
down,  so  it  might  have  been  2£/2,5£/3£  and  so
on’ (67).  James  Budgett  also  states  that  the  matrix
was only handed over on one occasion (68). On the
other hand, during investigations at Tate & Lyle, a
representative  of  the  company  stated  that  the
to
British  Sugar  matrix  was  handed  over 
Tate & Lyle,  ‘twice  or  three  times  possibly’ (69).
Moreover,  answering  the  investigator’s  enquiry  as
to  the  nature  of  the  information  which  was
provided  to  Tate & Lyle  on  those  occasions  where
the  matrix  was  not  handed  over,  a  representative
of the company stated (70) ‘. . . the point was really
that  they  presented  a  piece  of  paper  which  they
said was their intent in terms of moving the market
price  (. . .)  Now  it  wasn’t  a  matter  of  it  appearing
intent  for  a
every  time.  It  related  to  their 
subsequent period, a year ahead’ (71). In its written
reply  to  the  revised  statement  of  objections (72),
Tate & Lyle  maintained  that  by  referring  to  the
presentation  of  ‘a  piece  of  paper’  its  representative
was  referring  to  the  matrix  on  the  occasions  when
it  was  handed  over.  According  to  Tate & Lyle (73),
‘other  than  on  the  one  or  possibly  two  or  three
occasions  when  the  matrix  was  handed  to  T & L
and  the  merchants,  no  written  or  printed  pricing
information was passed to T & L. T & L  therefore
agrees  with  BS  that,  except  for  the  matrix,  no
other  printed  or  written  documents  were  handed
to  T & L’ (74).

the  matrix 

However, none of the parties has called the revised
statement of objections into question in so far as it
reports  —  as  reiterated  in  this  Decision (75)  —
British Sugar’s recollection of what happened when
the matrix was not handed over, namely discussion
of 
terms’  and  an
‘in  general 
announcement  by  British  Sugar  of  the  levels  by
which it was intending to move the various volume
bands.  A  comparison  shows  that  the  information
provided  by  British  Sugar  on  these  occasions  was
of  a  similar  nature  to  the  information  provided  by
the  actual  handing-over  of  the  matrix  to  the  other
parties.  Napier  Brown  expressly  agrees (76)  with
the  Commission’s  description  of  the  facts  as  put
forward  in  its  revised  statement  of  objections (77)
and as reiterated in this Decision (78): ‘At least once
a  copy  of  the  written  matrix  was  provided  to
Tate & Lyle,  Napier  Brown  and  James  Budgett,
and  on  other  occasions  information  of  a  similar
nature  to  that  of  the  matrix  was  provided  by
British  Sugar  . . .’ (79).

(39) 

to 

its 

the 

reply 

initial 

In 
statement  of
objections (80),  Tate & Lyle  states  that  ‘while  the
matrices  were  talked  about  at  the  meetings,  they
were  not  “proposed”  by  BSC  for  discussion  and
amendment  but 
represented  BSC’s  unilateral
decision’ (81).  It  goes  on  to  state (82)  that  ‘the
“matrix”  was  a  BSC  internal  document  which,  for
its own reasons, it chose on occasion (although not
invariably)  to  disclose  to  T & L  and  the  two
merchants’ (83).

(40)  Further  clarification  as  to  the  nature  of  the  matrix
can  be  gained  from  the  following.  At  the  oral
hearings  in  this  case,  British  Sugar  described (84)
the matrix as ‘an internal document, it is a vertical
document,  if  you  like,  within  British  Sugar’ (85).  It
specified  the  prices  below  which  British  Sugar’s
sales  representative  were  not  permitted  to  sell
industrial  sugar  without  the  express  permission  of
the  general  manager  responsible  for  industrial
sugar  sales (86).  British  Sugar  also  pointed  out,
however,  that  in  many  cases  the  actual  price  at
which  industrial  sugar  was  sold  was  below  the
matrix  price.

James  Budgett,  in  its  written  reply  to  the  initial
statement  of  objections (87)  stressed  that  it  never
‘considered  the  volume/price  matrix  tabled  by  BS
as  anything  other  than  a  guide  as  to  the  price  BS
was  asking  its  salesmen  to  seek.  This  information
was  not  secret  (it  was  available  to  industrial
customers  who  enquired)’ (88).  In  its  written  reply
to  the  revised  statement  of  objections,  James
Budgett described (89) the matrix to be ‘understood
to  constitute  only  a  British  Sugar  internal  guide  to
its  salesmen,  which  they  could  depart  from  (but

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should 
first 
approval) (90)’, 
monitoring mechanism’ (91).

seek 
thus  providing 

internal  management
internal
‘an 

Tate & Lyle  during  investigations  stated (92)  that
‘they  (British  Sugar)  presented  a  piece  of  paper
which  they  said  was  their  intent  in  terms  of
moving  the  market  price  (. . .)  this  presentation
was for the benefit of the others so that we would
know  what  they  intended  to  do’ (93).

(41)  British  Sugar  has  informed  the  Commission  that
the  matrix  was  not  —  otherwise  than  at  the
meetings  between  the  parties  which  are  at  issue  in
this  proceeding  —  given  to  customers (94).  The
document  was  thus  not  freely  available.  However,
looking  at  timing,  British  Sugar  states  that  in
practice  well  before  it  disclosed  the  matrix  to
others  it  had  already  embarked  on  negotiations
and  even  concluded  some  major  industrial  sugar
contracts.  According  to  British  Sugar,  at  the  time
the  matrix  was  disclosed,  its  activities  in  the
industrial  sugar  market  place  were  already  known
to its rivals. The matrix did not offer surprises and
did not serve to reduce any uncertainty over British
Sugar’s  prices  to  its  customers (95).  Referring  more
specifically  to  the  point  in  time  when  Tate & Lyle
obtained 
information
contained  in  the  matrix,  Tate & Lyle  explained
during 
‘in  general’  the
information  was  given  to  it  ‘at  the  early  stages’  of
its annual negotiations with industrial buyers when
‘we  might  have  been  already  negotiating  with
some,  maybe  not  with  others’ (97).  Tate & Lyle
maintained  that  in  the  event  it  had  not  been
provided  with  the  matrix  information  by  British
Sugar  it  would  have  to  a  certain  extent  been  able,
by talking to buyers, to obtain the information via
the  market. (98).  However,  on  the  same  occasion,
Tate & Lyle  confirmed (99)  that  the  information
contained  in  the  matrix  was  useful  to  it  by  stating
‘it  would  be  foolish  to  say  it  wasn’t  useful,  it  was
useful (. . .) if we had an indication of their intents
it  had  some  bearing  perhaps  on  the  way  in  which
we  might  have  seen  it.  We  are  followers’ (100).

investigations (96)  that 

from  British  Sugar 

the 

giving  of  equivalent  information,  but  that  British
Sugar  also  provided 
those  companies  with
considerable  advance  warning  of  its  intention  to
raise  prices,  before  detailed  matrices  had  been
produced.  In  a  written  reply,  dated  15  January
1991 (101),  to  questions  raised  by  the  Commission
regarding industrial sugar, Tate & Lyle stated that,
whilst  it  never  received  draft  list  price  changes
from  British  Sugar,  ‘indications  of  an  intention  to
change  some  or  all  list  prices  were  at  times  made
as much as nine months ahead. Please note that the
majority  of  industrial  sales  are  not  contracted  at
List  Price’ (102).

had 

that 

during 

confirmed 

(43)  With  regard  to  the  Commission’s  conclusion  that
the
Tate & Lyle 
investigations  of  27  May  1994 
the
information  provided  a  higher  degree  of  certainty
and advance knowledge, Tate & Lyle, in its written
reply  to  the  revised  statement  of  objections,
stated (103):  ‘Price  lists  in  the  industrial  sector  are
of very little relevance in terms of the actual prices
charged  to  individual  customers.  The  information
provided  by  BS  was  of  far  more  relevance  to  the
merchants  to  enable  them  to  base  their  prices.  In
terms of competing with BS on individual accounts
such  information  was  of  little  value  to  T & L.
Therefore,  (. . .)  the  information  was  of  use  as  to
BS’  probable  intentions  rather  than  providing  any
certainty’ (104).

to 

As 
the  aspect  of  advance  knowledge,
Tate & Lyle stated (105): ‘Although the matrix itself
was  not  given  to  customers,  the  information  it
contained,  by  the  time  T & L  received  it,  would
have  been  available  to  customers  at  the  same  time
as  it  was  released  to  T & L.  Consequently,  T & L
would  have  already  begun 
the
information  from  the  market  or  at  the  very  least,
would have obtained that information very quickly
thereafter.  T & L  did  not 
receive
information  on  the  content  of  BS’  price  intentions
in  advance  of  BS’  customers  (see  also  paragraphs
152  and  160  of  BS’s  response  to  the  First
SO’ (106).

to  pick  up 

therefore 

(42)  Moreover,  there  is  evidence  that  the  information
conveyed  by  British  Sugar  to  Tate & Lyle,  Napier
Brown  and  James  Budgett  regarding  industrial
sugar  was  not  limited  simply  to  the  advance
handing  over  of  industrial  price  matrices,  or  the

the  prices  charged 

(44)  Furthermore, it is clear that during the meetings on
industrial  sugar  the  differentials  to  be  maintained
to
or  created  between 
purchasers of large quantities of sugar compared to
purchasers  of  smaller  quantities  were  indicated.  In
its  letter  to  the  Office  of  Fair  Trading  dated  16
July  1990 (107),  Tate & Lyle  states  that  during  the
meetings British Sugar ‘indicated their desire to see
United  Kingdom  price  levels  rise  from  the  low
levels  that  they  had  by  then  reached,  and  also  to
see differentials between customers taking different

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volumes  restored  to  more  sensible  and  logical
levels’ (108).

inevitable,  This 

Indeed, the fact that British Sugar tabled its pricing
matrix during at least some of these meetings, and
that  this  matrix  stated  their  intended  minimum
price  for  customers  according  to  the  size  of  their
purchases, meant that consideration of differentials
during  these  meetings  was 
is
confirmed by British Sugar. During investigations it
stated (109)  that  the  ‘sharing  of  the  matrix  . . .  was
designed  to  be  able  to  impress  upon  them  that
certain relativities between price and volume would
be  preserved’ (110);  and  in  its  written  reply  to  the
initial  statement  of  objections (111)  it  stated  that
price
‘considered 
such  meetings 
differentials  between  larger  and  smaller  purchases
of 
in
Tate & Lyle’s  letter  to  the  Office  of  Fair  Trading
dated  29  August  1990 (113),  which  states  that  at
the  meetings  regarding  industrial  sugar  ‘matters
included  price  changes,  differentials,
discussed 
delivery 
terms,  concerns  about
volume  loss  and,  in  some  cases,  the  situation  in
particular accounts’ (114).

sugar’ (112).  This 

terms,  credit 

confirmed 

industrial 

is  also 

(45)  Napier  Brown  and  James  Budgett  have  given
evidence  that,  as  merchants,  they  had  a  particular
interest  in  the  restoration  and  maintenance  of
appreciable  price  differentials  between 
the
purchasers  of  larger  and  of  smaller  volumes  of
industrial  sugar.  This  is  due  in  particular  to  the
fact  that  in  the  industrial  sugar  business  the
purchasers  of 
larger  quantities  were  mainly
customers  of  British  Sugar  whereas  the  purchasers
of smaller quantities were the traditional customers
of  the  merchants.  Napier  Brown,  in  its  written
reply  to  the  revised  statement  of  objections,  made
it  clear (115)  that  it  derived  reassurance  from  the
meetings that British Sugar would no longer pursue
‘the
with  regard 
unrealistically 
had
developed  during  the  course  of  the  price  war’ (116)
due 
‘British  Sugar’s  policy  of  drastically
reducing the differentials between prices charged to
customers  taking  large  quantities  of  sugar  (who
were  frequently  existing  customers  of  British
Sugar)  and  customers  taking  smaller  quantities,
who  were 
the
merchants’ (117).

industrial  sugar  pricing 
structure  which 

traditional  customers  of 

“flat” 

the 

to 

to 

James  Budgett,  in  its  written  reply  to  the  revised
statement  of  objections,  explained (118):  ‘Budgett
had just been suffering, not from the absolute level
of  average  prices  for  industrial  sugar  (. . .)  but

rather  from  the  lack  of  distinction  in  the  price
charged  by  British  Sugar  to  different  sizes  of
customers.  (. . .)  From  Budgett’s  point  of  view
therefore,  elimination  of  differentials  was  clearly
the  main  unfair  pricing  practice  conducted  by
British  Sugar,  and  one  which  had 
inflicted
substantial  damage  on  Budgett. 
(. . .)  From
Budgett’s  point  of  view,  the  meetings  provided
reassurance  that  British  Sugar’s  determination  to
avoid  unfair  pricing  practices  which  damaged  the
merchants,  evident  at  a  senior  management  level,
was  also  subject  to  some  internal  mechanism
concerning  the  day  to  day  activity  of  British
Sugar’s salesmen’ (119).

2.2.2.  Retail  sugar  pricing

(46)  With  regard  to  the  meetings  on  retail  sugar,
Tate & Lyle  was  also  invited  to  comment,  during
the 
investigations  of  27  May  1994,  on  the
indications  that  British  Sugar  provided  a  number
of  price  lists  at  a  number  of  stages  before  the
actual  prices  became  generally  available,  and  that
British  Sugar  provided  Tate & Lyle  with  advance
warning  of  price  list  increases.  Asked  about  what
was  given,  when  and  how  far  in  advance,  a
representative of Tate & Lyle stated (120): ‘It tended
to  be  a  matter  of  three  or  four  weeks  I  think
before  the  official  date  of  the  price  increase  and  I
think  it  was  really  just  to  get  the  information
across so that we weren’t totally unaware and they
(British  Sugar)  were  comfortable  that  we  were
going to follow. We always had followed and they
always assumed that we would. And it was just to
make  themselves  comfortable  that  we  were  going
to  follow  on  that  occasion’ (121).  Tate & Lyle
confirmed (122)  that  it  would  amend  its  prices
shortly  thereafter  and  ‘go  the  same  increase  per
tonne  in  general’.  Tate & Lyle  also  admitted (123)
that the information provided by British Sugar was
a  ‘safety  factor’.

(47)  Commenting  on 

the  certainty  and  advance
knowledge  provided  by  British  Sugar  on  retail
prices,  Tate & Lyle,  in  its  written  reply  to  the
revised  statement  of  objections,  stated (124)  that
‘T & L was provided with copies of BS’s price lists
on  only  three  occasions  during  the  period  in
question,  once  five  days  and  once  two  days  before
the price lists were officially circulated to the trade.
T & L was on the third occasion handed a copy of
the price lists four days after its official circulation
to  the  trade.  However,  BS  would  invariably  have
spoken  to  its  customers  before  talking  to  T & L
and 
to
customers  two  or  three  weeks  in  advance  that  it
was  going  to  increase  its  prices.  T & L  were  not
therefore  given  any  privileged  information.  Any

in  particular  would  have 

indicated 

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“advance”  knowledge  was  only  in  advance  of  the
official  circulation  of  the  price  lists  and  not  in
advance  of  BS’  customers  being  made  aware  of
new  prices’ (125).

(48)  However,  there  is  evidence  that  the  information
provided by British Sugar to Tate & Lyle regarding
retail  sugar,  was  not 
limited  simply  to  the
provision  of  retail  price  lists.  British  Sugar  also
provided  Tate & Lyle  with  considerable  advance
warning of its intention to raise retail prices, before
detailed price lists had been produced. In a written
statement,  dated  12  December  1990 (126),  given  to
the  Commission,  the  national  retail  sales  manager
of  Tate & Lyle,  stated  the  following  regarding
retail  sugar:  ‘Since  my  first  meeting  with  BS  in
February 1987, I cannot remember any subsequent
price  increase  that  they  initiated  that  was  not
signalled to me at least 2 to 3 weeks in advance of
their  official 
the
investigations  carried  out  at  Tate & Lyle  on  27
May  1994,  a  representative  of  the  company
confirmed (128)  that  ‘signalling’  meant  that  British
Sugar  ‘would  actually  say  the  amount  of  the  price
intended  listings’  and  that  this  was  done  on  the
basis  of  a  standard  list  price.  Also  in  relation  to
retail  sugar,  the  Commission’s  question,  put  at
some  other  point  during  the  same  investigations,
about  the  advance  provision  of  price  lists  and  the
advance warning of price list increases provided by
British  Sugar,  was  answered  by  a  representative  of
Tate & Lyle (129)  summarily  to  the  effect  that  ‘it
tended  to  be  a  matter  of  three  or  four  weeks  I
the  price
think  before 
increase’ (130).

trade  circular’ (127).  during 

the  official  date  of 

accurate than first-hand information obtained from
the  source  itself  (here  British  Sugar).  This  is
confirmed  by  Tate & Lyle’s  letter  to  the  Office  of
Fair  Trading  dated  16  July  1999 (131),  in  which  it
stated  that  ‘information  passing  between  customer
and producer may often be unreliable if not totally
misleading.  This  has  been  especially  true  of  the
sugar  market  over  the  past  few  years’ (132).  In  this
letter,  Tate & Lyle  also  stated  that  statements  by
one  competitor  to  another  may  be  unreliable.
However,  Tate & Lyle  later  confirmed  that  the
information  provided  by  British  Sugar  was  useful
to  it (133);  this  can  also  be  deduced  from  the  fact
that  Tate & Lyle  continued  to  attend  the  meetings
on  a  regular  basis.

James  Budgett  stated  in  its  reply  to  the  initial
statement  of  objections (134)  that  ‘market  sources,
although  they  might  not  give  perfect,  immediate
information  as  to  prices  to  individual  accounts
(e. g.  individual  buyers  might  quote  misleading
buy-in  prices  from  third  parties)  provided  very
accurate,  rapid  information  about  general  price
levels.  The  unique  market  structure  was  ideally
suited  to  this’ (135).  It  also  stated (136)  that  the
‘information  concerning  BS’s  matrix  was  rapidly
and  accurately  communicated  via  the  market
(especially  customers)  to  all  major  players  at
least’ (137).  Napier  Brown  shares  this  view  as
expressed  by  James  Budgett (138).  Similarly,  British
Sugar considers (139) that the merchants could have
obtained  the  information  from  the  market  place,
and  that  the  information  merely  ‘had  an  effect  in
terms  of  providing  a  degree  of  assurance  to
merchants’ (140).

2.2.4.  Further  accounts  of  the  meetings

2.2.3.  The 

availability 
and 
sugar-pricing  information

value  of 

the

(50) 

In  the  letter  to  the  OFT  of  29  August  1990 (141),
Tate & Lyle  further  explains  its  recollection  of  the
subjects  discussed  during  the  meetings.

it 

to  obtain 

(49)  As  to  the  availability  and  value  of  the  pricing
information  provided  by  British  Sugar  at  the
meetings,  the  Commission  notes  as  a  fact  that
technically 
is  always  more  difficult  and
information  about  a
burdensome 
competitor’s  pricing  intentions  on  a  piecemeal
basis  by  talking  to  a  number  of  his  potential
customers  than  by  receiving  this 
information
directly  and  comprehensively  from  the  competitor
himself  in  meetings  with  him.  Moreover,  it  is
common  experience  that  second-hand  information
obtained by a number of third parties (here British
less  reliable  and
Sugar’s  potential  buyers) 

is 

‘2.  Industrial  sales

(. . .)

Mr  Smith’s  recollection  is  that  at  the  first  of  these
meetings  of  the  four  representatives  a  minimum
floor  price  in  the  region  of  £370  per  tonne  was
industrial  sugar.  At  subsequent
accepted 
meetings  this  floor  price  was  assumed  to  be
upgraded  in  accordance  with  the  general  increase
in  prices  shown  by  the  “matrix”  which  was
produced  by  British  Sugar  and  which  gave

for 

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22.3.1999

price 

included 

discussed 

minimum  net  prices  for  specific  volume  bands.
Matters 
changes,
differentials,  delivery  terms,  credit  terms,  concerns
about volume loss and, in some cases, the situation
in  particular  accounts.  In  the  early  days  the
meetings  appeared  to  Tate & Lyle  to  be  partly  a
fence  mending  exercise  for  British  Sugar  and  the
merchants.  During  the  price  war  the  merchants
had  suffered  substantial  losses  of  tonnage  in  small
accounts  and  British  Sugar  were  gradually
surrendering  the  small  accounts  back  to  them.
Tate & Lyle  Sugars  was  not  involved  in  this  since
they  had  never  had  much  presence 
in  small
accounts.

(. . .)

3.  Retail  sales

Meetings  between  the  individuals  at  British  Sugar
and  Tate & Lyle  responsible  for  retail  marketing,
Mr  (deleted,  business  secret)  and  Mr  (deleted,
business  secret)  respectively,  occurred 
in  two
situations:  first,  to  enable  British  Sugar  to  inform
Tate & Lyle  of  an  imminent  price  increase,  and
secondly  when  specific  instances  arose  leading  one
of  the  sugar  producers  to  believe  that  the  other
was  soliciting  business  from  his  customers  by
undercutting  price.  At  price  change  meetings
British  Sugar  would  hand  over  its  price  list  a  few
days before publication and inform Tate & Lyle of
the  level  of  discount  that  it  would  quote  to  the
multiples to ensure that the multiples profit margin
was  not  reduced.  However,  Tate & Lyle  was  not
informed  of  any  specific  price  which  was  to  be
quoted  to  a  specific  customer’ (142).

(51) 

In  a  letter  to  the  OFT  dated  7  August  1990 (143),
British Sugar commented on Tate & Lyle’s letter to
the  OFT  of  16  July  1990 (144)  and  set  out  its  own
recollection  of  the  meetings  in  question.  Both
Napier  Brown  and  James  Budgett  concur  with
these  recollections (145):

Budgetts. Initial meetings were with the merchants.
One of the complaints made by Napier Brown and
upheld  by  the  Commission  as  constituting  an
infringement  of  Article  86  was  that  British  Sugar
had  reduced  its  prices  for  retail  and  industrial
sugar.  The  initial  purpose  of  the  meetings  and  of
British  Sugar  confirming  what  the  merchants  (who
were  also  customers  of  British  Sugar)  would  have
discovered in the market place was to give comfort
to  the  merchants  that  the  problem  was  not  about
to  recur.  Later  at  these  meetings,  information  was
given  on  British  Sugar’s  pricing 
intentions.
Meetings with Tate & Lyle began in late 1987. The
British  Sugar  representative  at  these  meetings
announced the prices that British Sugar intended to
achieve  in  future  quarterly  periods.  As  is  normal
business  practice  in  such  situations,  a  pricing
matrix was developed on a volumetric sugar usage
basis  for  guidance  of  British  Sugar’s  own  sales
force  —  identifying  minimum  prices  below  which
it must seek managerial approval. The existence of
this  matrix  was  known  to  both  the  trade  and
competition — there was even discussion as to the
the  matrix.  The  matrix  was
publishing  of 
developed  within  the  annual  planning  process  of
British  Sugar  and  was  one  of  the  key  elements  in
the  profit  mix.  It  also  represented  a  deliberate
move  to  satisfy  the  indication  which  British  Sugar
had  received  from  the  European  Commission  that
it  ought  to  have  a  cost-related  price  structure.
emphasised,  what  was
Thus, 
communicated 
the  other  companies  were
commercial  decisions  which  had  already  been
taken  by  British  Sugar.  At  no  time  were  prices
which  were  to  be  charged  to  particular  customers
agreed.  Likewise,  there  was  no  agreement  between
the  parties  as  to  prices  which  were  to  be  quoted.
information  was  centred  upon  the  price
The 
increases  British  Sugar 
intended  to  apply  to
customers  purchasing  different  volumes.  However,
this information would also have been available to
any  industrial  customers  of  British  Sugar  at  the
same  time  as  it  was  released  to  Tate & Lyle  and
the  sugar  merchants.  Though  discussion  did  take
place,  on  no  occasion  were  British  Sugar  decisions
and  consequently 
its  business  plan  amended.
Additional  discussion  did  take  place  concerning
market  issued  such  as  customer  credit  worthiness.
At  all  times  Tate & Lyle  and  the  merchants  had
the  opportunity,  and 
the
opportunity, 
their  own  pricing
decisions’ (148).

it  must  be 

in  practice 

to  make 

took 

to 

‘Paragraph 3 on page 4 of Mr Shaw’s letter’ refers
to  sales  of  industrial  sugar,  and  to  meetings  and
communications  between  the  two  companies  and
the  major  sugar  merchants,  Napier  Brown  and

As  regards  retail  sugar,  British  Sugar  stated  in  the
same  letter  of  7  August  1990:  ‘it  appears  that
indicated  to
British  Sugar  has,  on  occasion, 

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list.  Again,  the 

Tate & Lyle the dates and timing of increases in its
retail  price 
information  flow
appears  to  have  been  entirely  one-sided.  We  are
assured  that  at  no  time  has  information  been
exchanged  about  the  level  of  specific  discounts
which  would  be  offered  to  particular  customers.
For the most part, the information as to the timing
of  price  increases  which  was  given  to  customers
was  a  matter  of  public  knowledge  within  the
industry.  Prices  are  increased  annually  with  effect
from  1  July,  to  reflect  changes  in  the  Community
pricing  structure.  Thus,  on  the  11  May  this  year,
British  Sugar  informed  its  customers  of  the  price
increases  which  would  be  effective  as  of  1  July.
Tate & Lyle  was  given  the  information  on  9  May.
If any particular customer inquires of British Sugar
whether  it  intends  to  increase  its  prices  at  other
times  during  the  year,  that  customer  will  be
informed  of  British  Sugar’s  current  intentions  and,
if  possible,  the  likely  amount  of  the  proposed
increase’ (149).

(55)  A  document  minuting  a  meeting  held  between  the
executive  director  of  De  Danske  Sukkerfabrikker
and  senior  management  of  British  Sugar  on  26
June  1987 (154)  states  that  ‘discussions  are  under
way  between  T & L  and  BSC  to  attempt  to
coordinate the development of the market but BSC
does  not  want  to  risk  anything  in  this.  PJ (155)
claims  that  T & L  always  break  their  agreements
while  BSC  always  stick  to  their  minimum  prices,
do  not  grant  secret  special  discounts,  etc.’ (156).

(56)  An  internal  Tate & Lyle  memorandum  addressed,
inter  alia,  to  the  sales  and  marketing  director
(industrial  sugar) (157)  states:  ‘BS  have  indicated
that the bottom line loss to them, following a 5 %
cut  in  support  levels,  would  be  of  the  order  of  £ 9
m.  They  are  proposing  to  advise  the  trade
(industrial)  that  with  effect  from  January  1990
price levels will need to increase by £ 20 per tonne
to  retrieve  a  position  which  would  permit  them  to
continue  with  their  necessary  levels  of  investment
for  the  future!!  They  have  obviously  discussed  this
with  Ridgwell (158)  who  rang  me  to  put  this  point
across’ (159).

2.2.5.  The  parties’  understanding  of  the  market
situation  during  the  relevant  period

(52)  A number of other documents illustrate the parties’
understanding  of  the  market  situation  during  the
relevant period:

2.2.6.  The 

gap  between 

and  British 

institutional  price
price

Sugar’s 

increases 
increases

(53)  A document entitled ‘James Budgett & Son Limited
—  Business  strategy  1987-1990’ (150)  in  its  first
section,  headed  ‘Sugar  dealing,  distribution  and
processing’, states that: ‘It is now in British Sugar’s
interest  to  switch  to  a  high  price  strategy,  since
they are ex growth in volume terms, and to rebuild
market  premiums.  To  achieve  this  they  require,
and  are  currently  seeking,  the  dealers’  cooperation
because  aggressive  marketing  of 
imports  can
entirely  frustrate  their  ambitions.  Progress  towards
an orderly market is under way. Improved refiners
commissions  are  under  negotiation  and  profits
from  dealing  are  improving’ (151).

(54)  A  market  report  submitted  to  the  board  of  James
Budgett  in  preparation  for  a  board  meeting  to  be
held  on  2  August  1990 (152)  states  that  ‘Recent
independent  discussions  with  BS  and  T & L
suggest  minimum  increase  of  £3-£4  per  tonne  will
be  sought  by  British  Sugar  and  no  doubt  T & L
will  follow’ (153).

its  retail  sugar  prices  beyond 

(57)  Finally, it is established that in the relevant period,
British Sugar increased its industrial sugar prices as
well  as 
the
institutional  price 
increases,  so  that  the  gap
between  the  institutional  prices  and  the  prices
charged  by  British  Sugar  in  the  market  widened.
During  the  oral  hearing,  the  Commission  stated
that  a  comparison  of  the  Commission’s  figures  for
institutional prices (which means intervention price
plus  storage 
levy  representing  the  guaranteed
minimum price for A/B sugar (160) between January
1986  and  December  1990  with  British  Sugar’s
figures (161)  for  its  market  prices  applied  to  major
customers  during  the  same  period  had  shown  that
the maximum surplus of British Sugar’s prices over
institutional  prices  had  doubled  between
the 
January  1986  and  December  1990.  British  Sugar
did not dispute the Commission’s mathematics, nor
that  there  had  been  a  widening  of  the  gap  in  the
amount  stated  by  the  Commission.  However,
British  Sugar  considered  this  widening  to  be
minimal  and  pointed  out  that  it  had  merely
pursued  its  publicly  known  commercial  aspiration,
namely to try and obtain in the market place price
increases  beyond  the  institutional  increases (162).

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G.  PARALLEL  PROCEDURE  BY  THE  UK  OFFICE
OF  FAIR  TRADING

(‘retail  sugar’)  and  sugar  for  sale  to  industrial
clients  (‘industrial  sugar’).

to 

Sugar 

submitted 

the  OFT 

(58)  Since  1990,  the  UK  Office  of  Fair  Trading  (OFT)
had undertaken a parallel procedure against British
Sugar and Tate & Lyle on the same matter. As was
mentioned  in  recital  2,  in  July  and  August  1990,
Tate & Lyle  wrote  two  self-incriminating  letters  to
the  OFT.  On  15  April  1991,  Tate & Lyle  and
British 
a
memorandum  describing  the  arrangements  which
existed between these two companies in the period
from  20  June  1986  to  2  July  1990 (163).  In  June
1991,  this  memorandum  was  placed  on  the
Register  of  Restrictive  Trading  Agreements.  Some
time  after  the  Commission  had  issued  its  initial
statement  of  objections  in  the  current  proceedings
in  June  1992,  British  Sugar  applied  to  the
Restrictive  Practices  Court  seeking  to  remove  the
memorandum  from  the  Register.  British  Sugar’s
arguments  were,  first,  that  this  memorandum  did
not  accurately  record  the  arrangements  between
British  Sugar  and  Tate & Lyle  and,  second,  that
even  if  the  record  was  correct  it  did  not  disclose  a
restrictive  agreement.  Tate & Lyle  did  not  make
any  application.  By  judgment  of  21  August  1996,
the  Restrictive  Practices  Court  rejected  both  of
British  Sugar’s  arguments.  The  court  held  that  the
memorandum 
the
arrangements  and  disclosed  the  existence  of  a
restrictive  agreement  between  British  Sugar  and
Tate & Lyle  in  the  period  between  20  June  1986
and  2  July  1990.  British  Sugar  did  not  appeal
against  this  judgment  within  the  time  limit  and  so
it  became  definite.  On  10  December  1996,  British
Sugar  and  Tate & Lyle  gave  undertakings  to  the
Restrictive  Practices  Court  not  to  operate  a
restrictive  pricing  agreement  nor  to  enter  into  any
similar  arrangement  in  the  future  and  not  to
enforce  any  other  registrable  agreement  details  of
which  had  not  been  notified  to  the  OFT  in  time.
The  undertakings  apply  to  both  companies’  whole
range  of  business (164).

accurately 

recorded 

III.  LEGAL  ASSESSMENT

A.  DEFINITION  OF  THE  RELEVANT  MARKET

1.  The  relevant  product  market

(59)  The  relevant  product  market  is  white  granulated
sugar.  This  market  is  further  subdivided  into  two
sub-markets  of  sugar  for  sale  to  retail  clients

Speciality  sugars  and  liquid  sugars,  being  used  for
different  purposes  than  white  granulated  sugar,  do
not meet the same needs and are not therefore part
of  the  relevant  product  market  because  they  are
not  substitutable  from  the  customer’s  point  of
view.

Industrially  produced  sugar  substitutes  such  as
saccharin,  cyclamates  or  aspartame  only  compete
with  natural  sugar  for  limited  uses,  e. g.  as  diet
products,  and  thus  do  not  form  part  of  the  same
relevant  product  market  as  white  granulated
sugar (165).

2.  The  relevant  geographical  market

companies 

(60)  The  sugar  scheme  of  the  common  agricultural
policy (166)  allocates  a  specific  sugar  quota  to  each
Member State. This national sugar quota is divided
between  beet-processing 
each
Member State. During the relevant period and ever
since,  British  Sugar  has  been  the  sole  processor  of
sugar beet in the United Kingdom and has received
the  entire  UK  A/B  sugar  quota (167).  The  Court  of
Justice  has 
common
organisation  of  the  sugar  market  has  a  significant
influence  on  the  production  and  sales  of  sugar  in
the  Community,  and 
to
consolidating  a  partitioning  of  national  markets:

it  contributes 

recognised 

that 

that 

the 

in 

‘It  is  beyond  doubt  that,  as  the  aforementioned
system  of  national  quotas  stopped  production
moving  gradually  to  areas  particularly  suitable  for
the  cultivation  of  sugar  beet  and,  in  addition
prevented  any  large  increase  in  production,  it  cut
down  the  quantities  which  producers  can  sell  in
the  common  market’ (168).

is 

costs, 

‘This  restriction  together  with  the  relatively  high
to  have  a  not
transport 
inconsiderable  effect  on  one  of  the  essential
elements  in  competition,  namely  the  supply,  and
consequently  on  the  volume  and  pattern  of  trade
between  Member  States’ (169).

likely 

‘Whatever  criticism  may  be  made  of  a  system,
which  is  designed  to  consolidate  a  partitioning  of
national  markets  by  means  of  national  quotas,  the
effects  of  which  will  be  examined  later,  the  fact
remains that it leaves in practice a residual field of
competition, that field comes within the provisions
of  the  rules  of  competition’ (170).

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(61)  Taking  into  account  the  processing  and  refining
activity  of  both  British  Sugar  and  Tate & Lyle,
enough  sugar  is  produced  in  the  United  Kingdom
to  cover  nearly  the  entire  domestic  demand  for  all
different  kinds  of  sugar.

be  necessary.  Potential  exporters  may  require
a  large  premium  to  persuade  them  to  export
large  quantities  of  sugar  to  Great  Britain  for
fear  of  retaliatory  exports  by  the  British
producers (175).

(62) 

Imports  do,  however,  enter  the  United  Kingdom,
because  purchasers  of  sugar  demand  a  further
source of supply from outside the United Kingdom
in  order 
supplies,
to  ensure  continuity  of 
particularly  so  as  to  protect  against  the  risk  of  a
shortage  of  sugar  developing  as  happened  in  the
1974/75  season,  and  in  order  to  use  it  as  a
competitive  threat  to  the  two  UK  producers (171).
Furthermore,  merchants 
sugar  when
conditions  are  favourable.  As  far  as  sugar  imports
from  other  Member  States 
into  the  UK  are
concerned,  by  far  the  largest  part  of  these  imports
has  always  been  in  the  form  of  white  granulated
sugar.

import 

(63) 

In recent years, imports from other Member States
into  the  UK  have  made  up  approximately  4 %  to
10 % of total UK sugar consumption. This amount
appears to represent, to a large extent, a structural
limit on imports, which are unlikely to exceed this
figure (172).  This  is  mainly  due  to  the  peculiarities
of the sugar market in Great Britain as opposed to
neighbouring  markets:

(i)  because  of  the  natural  barrier  of  the  English
Channel,  which  gives  rise 
to  additional
transport  costs,  British  producers  of  sugar  are
able  to  charge  a  premium  on  the  price  of
sugar  compared  with  Continental  prices.
British  prices  generally  correspond  to  British
Sugar’s prices. It is established that during the
relevant period (173) British Sugar attempted to
set its prices near the ceiling at which it would
expect  significant  quantities  of  imports  to  be
drawn 
thus
threatening  its  ability  to  sell  its  entire  A/B
sugar  quota  on  that  market;

the  domestic  market, 

into 

(ii) 

if  customers  requiring  large,  frequent  and
rapid  deliveries  upon  order  were  to  be
supplied  by  imports,  stocks  for  the  storage  of
imported sugar would have to be built up and
run in Great Britain; an additional cost would
thereby  have  to  be  incurred;

(64)  The  only  part  of  the  United  Kingdom  in  which
different  conditions  prevail  is  Northern  Ireland,
which  does  not 
the  relevant
geographical  market  for  the  purposes  of  this
case (176).

form  part  of 

While  both  Tate & Lyle  and  British  Sugar  supply
sugar  in  Northern  Ireland,  neither  has  refining
facilities  in  Northern  Ireland  and  no  sugar  is
produced  there.  Because  of  transport  costs,  most
sugar  supplies  in  Northern  Ireland  are  imported
from the Republic of Ireland by Irish Sugar, which
accounts for 60 % to 70 % of the sugar market in
Northern  Ireland.  British  Sugar  and  Tate & Lyle
account  for  the  remaining  sugar  supplies 
in
Northern  Ireland.  Both  companies  include  in  their
price  a  standard  surcharge  for  the  additional  sea
freight  to  Northern  Ireland (177).

(65)  The  Commission  therefore  concludes  that  for  the
purposes  of  these  proceedings  the  relevant  market
is  that  of  retail  and  industrial  white  granulated
sugar  in  Great  Britain,  which  is  a  significant  part
of  the  common  market.

On  the  basis  of  the  information  available  to  the
Commission it can be said that during the relevant
period  British  Sugar,  Tate & Lyle,  Napier  Brown
and  James  Budgett  together  held  over  90 %  of  the
market  for  industrial  sugar  in  Great  Britain,  and
that  British  Sugar  and  Tate & Lyle  together  held
approximately 89 %  of  the  market  for  retail  sugar
in  Great  Britain.  Against  this  backdrop,  the
Commission takes the view that both markets were
tightly  oligopolistic  in  structure.

B.  AGREEMENT  AND/OR  CONCERTED
PRACTICE  BETWEEN  UNDERTAKINGS  WITH  THE
OBJECT  OR  EFFECT  OF  AN  APPRECIABLE
RESTRICTION  OF  COMPETITION

1.  The  Commission’s  assessment

1.1.  Agreement  and/or  concerted  practice
between  undertakings

(iii)  furthermore,  as  the  MMC  pointed  out  in  its
second  report (174), 
in  order  to  ensure  a
substantial  volume  of  imports,  a  higher  price
in  Great  Britain  than  on  the  Continent  would

(66)  From  the  case-law  of  the  Court  of  Justice  of  the
European  Communities  and  the  Court  of  First
Instance,  it  may  be  seen  that  an  agreement  within

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the  meaning  of  Article  85(1)  can  be  said  to  exist
when the parties have reached a consensus, even in
broad terms, as to the lines of their mutual action,
or  abstention  from  action,  in  the  market.  It  may
involve  joint  decision-making  and  commitment  to
a common scheme. It suffices that the undertakings
in  question  should  have  expressed  their  joint
intention to conduct themselves on the market in a
specific  way (178).  The  agreement  does  not  have  to
be  made  formally  or  in  writing,  and  no  express
sanctions  or  enforcement  measures  need  be
involved.

determine  independently  the  commercial  policy
which  he  intends  to  adopt  in  the  common  market.
This  requirement  of  independence  did  not  deprive
undertakings  of  the  right  to  adapt  themselves
intelligently  to  the  existing  or  anticipated  conduct
of their competitors, but it did strictly preclude any
direct  or  indirect  contact  between  them  the  object
or  effect  whereof  was  either  to  influence  the
conduct  on  the  market  of  an  actual  or  potential
competitor  or  to  disclose  to  such  a  competitor  the
course  of  conduct  which  they  themselves  had
decided  to  adopt  or  contemplated  adopting  on  the
market.

them 

knowingly 

substitutes 
for 

(67)  A concerted practice within the meaning of Article
85(1), on the other hand, does not require that the
participants  should  have  reached  an  agreement  in
terms  as  to  what  each  should  precisely  do  or  not
do  in  the  market.  The  object  of  the  Treaty  in
in
creating  the  concept  of  concerted  practice 
addition  to  that  of  agreement  was  to  forestall  the
possibility  of  undertakings  evading  the  prohibition
of  Article  85(1)  by  a  form  of  coordination  which,
the  stage  where  an
without  having  reached 
agreement  in  the  sense  described  above  has  been
concluded, 
practical
cooperation  between 
the  risks  of
competition (179).  In  the  ICI  judgment (180),  the
Court  of  Justice  went  on  to  say  that  a  concerted
practice  might  arise  inter  alia  out  of  coordination
by  the  participants.  although  parallel  behaviour
may not by itself constitute a concerted practice, it
may nonetheless amount to strong evidence of such
a practice if it has led to conditions of competition
which do not correspond to the normal conditions
of  the  market,  regard  being  had  to  the  nature  of
the  products, 
the
undertakings,  and  the  volume  of  the  said  market.
The  Court  of  Justice  said  that  this  was  especially
the  case  if  the  parallel  conduct  was  such  as  to
enable  those  concerned  to  attempt  to  stabilise
prices  at  a  level  different  from  that  to  which
competition  would  have  led,  and  to  consolidate
established  positions  to  the  detriment  of  effective
freedom  of  movement  of  the  products  in  the
common  market  and  of  the  freedom  of  consumers
to  choose  their  suppliers.

the  size  and  number  of 

(69)  Thus  conduct  may  fall  under  Article  85(1)  as  a
concerted  practice  where  the  parties  have  not
agreed  or  decided  in  advance  among  themselves
what  each  will  do  in  the  market,  but  knowingly
adopt  or  adhere  to  some  collusive  device  which
encourages  or  facilitates  the  coordination  of  their
commercial behaviour.

(70)  The  Court  of  First 

in 

Instance 

various
judgments (182)  made  it  clear  that  it  was  not
necessary,  particularly  in  the  case  of  a  complex
infringement  of  considerable  duration,  for  the
Commission  to  characterise  it  as  exclusively  an
agreement  or  concerted  practice,  or  to  split  it  up
into  separate  infringements.  Indeed,  it  might  not
even  be  feasible  or  realistic  to  make  any  such
distinctions,  as  the  infringement  as  a  whole  might
present  characteristics  of  both  types  of  prohibited
conduct,  while  considered  in  isolation  some  of  its
manifestations  could  more  accurately  be  described
as one rather than the other. In particular, it would
be  artificial  to  subdivide  continuous  conduct,
having  one  and  the  same  overall  objective,  into
several  discrete  infringements.  The  Court  of  First
Instance  in  its  judgments  therefore  endorsed  the
Commission’s  dual  characterisation  of  the  single
infringement  as  an  agreement  and  a  concerted
practice, and stated that this had to be understood,
not  as  requiring,  simultaneously  and  cumulatively,
proof  that  each  of  the  factual  elements  contained
in 
the
constituent elements both of an agreement and of a
concerted  practice,  but  rather  as  referring  to  a
complex  whole  which  comprised  a  number  of
factual  elements  some  of  which  in  isolation  would
be  characterised  as  agreements  whereas  others
would  be  considered  concerted  practices.

conduct  presented 

continuous 

the 

(68) 

that 

In  its  judgment  of  16  December  1975 (181),  the
Court  of  Justice  held 
the  criteria  of
coordination  and  cooperation  laid  down  by  the
case-law  of  the  Court,  which  in  no  way  required
the  working  out  of  an  actual  plan,  had  to  be
understood  in  the  light  of  the  concept  inherent  in
the  Treaty 
the  provisions  of 
to
economic  operator  must
each 
competition: 

relating 

(71)  The  Commission  is  of  the  opinion  that  the  above
described facts evidence a complex infringement of
considerable  duration (183)  in  which  British  Sugar,
Tate & Lyle,  Napier  Brown  and  James  Budgett

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fall 

participated,  and  which  during  the  relevant  period
involved  elements  which  in  isolation  could  be
characterised  as  agreements  as  well  as  elements
which  could  be  categorised  as  concerted  practices.
Even  if  one  does  not  accept  that  some,  or  indeed
any,  of  these  elements  could  be  characterised  as
agreements (184),  all  the  elements  of  the  complex
infringement  not  constituting  agreements  would  at
least 
concerted
practices (185).  However,  it  would  be  artificial  to
subdivide  this  complex  conduct  of  considerable
duration into separate infringements, since it was a
continuing  common  scheme  which,  taken  as  a
whole,  served  one  and  the  same  object  as  detailed
in  recitals  72  to  76.  For  the  purpose  of  this
appraisal,  under  Article  85(1)  the  conduct  at  issue
is  therefore  referred  to  as  an  agreement  and/or  a
concerted  practice.

category  of 

into 

the 

1.2.  Object  or  effect  of  an  appreciable  restriction
of  competition

1.2.1.  Pricing  coordination

(72)  On  20  June  1986,  British  Sugar  and  Tate & Lyle
came  to  an  understanding  to  increase  the  price
level  for  white  granulated  sugar  in  Great  Britain
and  to  refrain  form  increasing  market  shares  by
lowering  prices.  While  British  Sugar  as  a  price
leader  in  the  market  has  been  at  the  origin  of  the
decision to end the price war and to adopt the new
pricing  strategy,  it  did  so  in  consensus  with
Tate & Lyle.  The  latter  gave  comfort  to  British
Sugar  with  respect  to  its  pricing  intentions  by
confirming,  during  the  abovementioned  meeting,
that  it  intended  to  follow  the  same  pricing  policy.
Napier  Brown  and  James  Budgett  were  informed
by  British  Sugar  of  the  new  pricing  policy  at  a
meeting  subsequent  to  the  meeting  of  20  June
1986.  The  systematic  participation  of  all  four
parties  at  the  regular  meetings  over  a  considerable
period  subsequent  to  the  meeting  of  20  June  1986
and  the  provision  and  receipt  of  information  on
industrial  sugar  prices  between  all  four  parties,  as
well as on retail sugar prices between British Sugar
and  Tate & Lyle  at  these  meetings,  is  evidence  of
their  collusive  behaviour.  It  created  the  necessary
the
atmosphere  of  mutual  certainty  as 
participants’  intentions  concerning  future  pricing
whereby  each  of  them  could  rely,  if  not  on  the
precise  price  levels  of  the  other  participants,  at
least  on  their  continual  pursuit  of  a  collaborative
strategy  of  higher  pricing.  For  all  the  participants
this  mutual  assurance  was  of  interest,  particularly
—  though  not  exclusively  —  in  the  price  range
the  break-even  point,  where  price
above 

to 

shown 

earlier (186), 

competition  was  possible  while  still  profitable.
the
Moreover,  as  was 
merchants  Napier  Brown  and  James  Budgett,
always  had  a  particular  interest  in  the  industrial
sugar  pricing  differentials  according  to  volumes  as
indicated  by  the  matrix.  Finally,  British  Sugar  and
Tate & Lyle had an additional interest in involving
Napier  Brown  and  James  Budgett  in  the  collusion,
because 
their
Continental
traditional 
producers,  could  —  by  way  of  imports  —  have
substantially 
and
frustrated  British 
Tate & Lyle’s  joint  strategy  of  increasing  prices  on
in  Great
the  white  granulated  sugar  market 
Britain.

the  merchants,  by  virtue  of 

connections 

Sugar’s 

with 

(73)  The  parties’  conduct  is  to  be  qualified  as  an
agreement  and/or  concerted  practice  which  had  as
its  object  the  restriction  of  competition  by  the
coordination  of  their  pricing  policy  on  the  market
for industrial sugar in Great Britain as concerns all
four  parties,  and  on  the  market  for  retail  sugar  in
Great  Britain  as  concerns  British  Sugar  and
Tate & Lyle.  In  particular,  the  object  of  the
agreement  and/or  concerted  practice  was 
to
increase  industrial  and  retail  sugar  prices  in  Great
Britain  through  a  coordinated  pricing  policy,  and
to  refrain  from  aggressive  price  cutting  aimed  at
gaining  market  share.  Moreover,  with  regard  to
industrial sugar, the object of the agreement and/or
concerted  practice  included  a  coordinated  policy
concerning  price  differentials  to  be  restored  and
maintained  between  the  purchasers  of  larger  and
smaller  quantities  of  sugar.  Thus,  in  summary,  the
object  of  the  parties’  collusion  was  the  restriction
of  price  competition  in  the  industrial  and  retail
sugar  markets  in  Great  Britain,  which  markets
were  already  characterised  by  a  tendency  toward
reduced  competition  due  to  the  concentration  of
the  market  and  the  high  entry  barriers.

(74)  The 

the 

fact 

that  during 

relevant  period
Tate & Lyle,  James  Budgett  and  Napier  Brown
were  ‘price  followers’  in  respect  of  British  Sugar
does  not  detract  from  the  fact  that,  through  their
conduct,  they  pursued  the  anti-competitive  object
of  pricing  coordination.  This  becomes  clear  by
taking  a  closer 
look  at  the  function  of  the
continuous meetings and the scope for competition
which  exists  even  in  a  market  characterised  by
price  leadership.  The  meetings  provided  —  not
only  for  all  four  parties  in  relation  to  industrial
sugar,  but  also  for  British  Sugar  and  Tate & Lyle
in  relation  to  retail  sugar  —  the  assurance  of  an
ongoing  higher  pricing  policy  on  the  part  of  their

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competitors.  Accordingly,  each  of  the  participants
at  the  meetings  (including  British  Sugar)  could  act
differently  than  if  it  was  obliged  to  rely  merely  on
its  own  perception  of  the  market.  Each  of  the
undertakings  as  in  a  position  to  assess  the  market
situation,  and  its  future  development,  with  more
certainty than would otherwise have been the case.
The fact that each of them (including British Sugar)
was  assured  at  the  meetings  that  the  other
companies were all equally aware of British Sugar’s
pricing  strategy,  and  that  moreover  each  of  the
three ‘followers’ also in the future intended closely
to follow British Sugar’s strategy, meant that all of
them (including British Sugar itself) could pursue a
policy  of  price  increases  in  the  knowledge  that  the
others  would  not  —  whether  intentionally  or
perhaps  through  ignorance  or  misinterpretation  of
what  could  be  perceived  of  British  Sugar’s  pricing
the  market  —
policy  by  simply  monitoring 
continue  to  price  at  lower  levels  or  start  to
undercut  competitors’s  prices,  or  follow  British
than
Sugar’s  price 
before (187).  White 
a
homogeneous product and price therefore is clearly
the  most 
competition  parameter.
Customers  are  very  price  sensitive  and  have  low
switching 
suppliers.
costs  between  different 
Consequently,  uncertainty  as  to  the  competitors’
pricing  policy  is  likely  to  increase  competition  by
exerting  a  downward  pressure  on  the  pricing
policies  of  individual  sugar  companies.  By  the
far-reaching elimination of this uncertainty brought
about  by  the  meetings,  the  parties  pursued  the
anti-competitive  object  of 
restricting  price
competition  between  them.  Despite  British  Sugar’s
price 
leadership,  such  price  competition  was
possible, in particular — though not exclusively —
in  the  price  range  above  the  break-even  point,
because 
in  this  range  price  competition  was
feasible,  while  still  profitable,  for  all  the  four
parties.

less 
granulated 

closely 
sugar 

leadership 

important 

is 

(75)  On the basis of the case-law of the Court (188), the
Commission  holds 
the
anti-competitive  object  of  the  parties’  conduct  has
been  established,  there  is  no  need  to  take  account
of  the  possible  effects  of  the  agreement  and/or
concerted  practice.

that  once 

the  view 

(76)  The  participation 

in 

the  agreement  and/or
concerted  practice  commenced,  for  British  Sugar
and  Tate & Lyle,  with  their  first  bilateral  meeting
on  20  June  1986  and,  for  Napier  Brown  and
James Budgett, with the first quadripartite meeting
their
in 

late  1986.  For  all 

four  parties, 

The 

the 
list 

subject  of 
provided 

participation  in  the  agreement  and/or  concerted
practice  ended  only  on  2  July  1990,  when  the
chairman  and  chief  executive  of  Tate & Lyle
ordered  an  end  to  all  contacts  with  competitors  of
this
the  kind  which  are 
procedure (189). 
by
Tate & Lyle (190)  shows  that  the  industrial  sugar
meetings  as  well  as  the  retail  sugar  meetings,  at
regular  one-  to  three-month  intervals,  continued
throughout the relevant period. As the last bilateral
retail  sugar  meeting  took  place  only  on  9  May
1990,  and  the  last  quadripartite  industrial  sugar
meeting  was  only  on  13 
the
Commission  has  no  reason  to  believe  that  the
participation  of  any  of  the  four  parties  in  the
agreement  and/or  concerted  practice  ended  before
2  July  1990.

June  1990, 

1.2.2.  Appreciability

(77)  Given  the  market  shares  of  the  undertakings  in
question,  and  in  particular  the  fact  that  the  four
companies  together  accounted  during  the  relevant
period for almost the entire white granulated sugar
the  restrictions  of
market 
competition which they pursued by their agreement
and/or  concerted  practice  were  appreciable.

in  Great  Britain, 

1.3.  Conclusion

(78) 

In  conclusion,  the  above  described  facts  establish
for  the  relevant  period  the  existence  of  an
agreement  and/or  concerted  practice,  which  had
the  object  of  restricting  competition  within  the
meaning  of  Article  85(1)  by  coordinating  the
pricing  policy  on  the  industrial  sugar  market  in
Great  Britain  between  all 
four  parties,  and
additionally  by  coordinating  the  pricing  policy  on
the  retail  sugar  market  in  Great  Britain  between
British  Sugar  and  Tate & Lyle.

2.  The  arguments  of  the  parties  and  the
Commission’s  replies

2.1.  No  agreement,  no  concerted  practice;
British  Sugar’s  price  leadership

2.1.1.  British  Sugar’s  arguments

(79)  With  respect  to  the  fact  that  British  Sugar
convened  a  meeting  with  Tate & Lyle  on  20  June

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1986 and subsequently also met Napier Brown and
James  Budgett  in  order  to  indicate  that  the  price
war was over and to reassure them of its intention
not  to  recommence  an  aggressive 
low-pricing
policy  but  to  seek  price  increases  instead,  British
Sugar  argues  that  this  action  could  not  have  had
any  appreciable  effect  on  the  behaviour  of  these
companies.  British  Sugar  had  already  taken  the
decision to end the price war. Tate & Lyle, Napier
Brown  and  James  Budgett,  being  price  followers,
had  no  choice  but  to  follow  this  initiative,  and
would  have  done  so,  whether  they  had  learned  of
British  Sugar’s  intentions  directly,  through  the
trade,  or  via  the  press.  Thus,  argues  British
Sugar (191),  the  agreement  of  the  other  companies
to  British  Sugar’s  unilateral  decision  was
unnecessary and irrelevant and there was therefore
no  agreement  within  the  meaning  of  Article
85(1).

(80) 

its 

reply 

revised 

to  he 

In 
statement  of
objections (192),  British  Sugar  cites  Tate & Lyle’s
confirmation  that  British  Sugar  decided  upon  its
pricing  moves  unilaterally  and  that  there  was  no
agreement of  any kind  at any point  in  time during
the  relevant  period.  British  Sugar  accepts  that  the
legal  concept  of  ‘agreement’  must  be  interpreted
flexibly,  but 
it  stresses  that  there  should  be
evidence of a consensus as to future joint conduct.
According  to  British  Sugar,  all  the  evidence  points
to  the  absence  of  any  joint  intention  of  the  parties
to  conduct 
in  a  particular  way.
Moreover,  British  Sugar  submits  that,  as  regards
classification  of  an  arrangement,  the  distinction
between agreement and concerted practice becomes
irrelevant  only  when  there  is  evidence  supporting
the  existence  of  both  them.

themselves 

(81)  Continuing  this  approach,  British  Sugar  then
argues (193)  that  neither  was  there  a  concerted
practice,  because  the  Commission  cannot  identify
any effect on the market arising from the meetings.
According  to  British  Sugar,  the  comparison  which
the  Commission  makes,  in  its  revised  statement  of
objections, with the judgment of the Court of First
Instance  in  Rhône-Poulenc  v.  Commission (194)  is
unfair  and  prejudicial.  In  British  Sugar’s  view,  the
Court  did  not  endorse  the  Commission’s  theory
according to which there is a concerted practice as
soon  as  there  is  concerted  action  having  as  its
object  the  restriction  of  the  autonomy  of  the
undertakings  in  relation  to  each  other,  even  if  no
actual  effect  has  been  found  on  the  market.
According  to  British  Sugar,  the  Court  of  First
Instance  made  its  finding  in  that  case  on  the  basis
of  ample  evidence  of  an  effect  produced  by  the

parties’ conduct in the market place, and identified
what  took  place  as  an  ‘agreement’.  British  Sugar
alleges  that  the  Court  stated  that  it  was  an  open
question  in  European  competition  law  whether  a
concerted practice could exist in the absence of any
effect  but,  from  the  fact  that  the  Court  then  went
on  to  analyse  the  effects  produced  in  that  case,
British  Sugar  draws  the  conclusion  that  the
identification  of  an  effect  capable  of  restricting
competition  is  necessary.

2.1.2.  Tate & Lyle’s  arguments

(82) 

In  its  written  reply  to  the  revised  statement  of
objections (194),  Tate & Lyle  argues  that  there  was
no  need  for  any  agreement  or  collaborative
strategy  on  prices  because  British  Sugar’s
dominance  enabled  it  unilaterally  to  set  prices
which  Tate & Lyle,  Napier  Brown  and  James
Budgett  were  bound  to  follow.  Tate & Lyle argues
that British Sugar never needed any assurance of a
continued  higher  pricing  policy  because  it  alone
determined prices. The ‘certainty’ and ‘reassurance’
that  Tate & Lyle,  Napier  Brown  and  James
Budgett  would  follow  British  Sugar’s  pricing  had
been, and still was, a consequence of the nature of
the  UK  sugar  market,  resulting  from  the  operation
of  the  Community  sugar  scheme  and  not  from  the
parties’  participation  in  the  meetings.

(83)  The 

foregoing 

contrast  with
statements 
Tate & Lyle’s  reply  to  the  initial  statement  of
objections  in  which  it  acknowledged (196)  ‘that  the
contacts  gave  rise  to  an  Arrangement  which,
subject  to  the  appreciability  of  its  effect  on  trade
between Member States, fell within the prohibition
of  Article  85’ (197).  Moreover,  in  its  reply  to  the
revised 
statement  of  objections,  Tate & Lyle
continues to acknowledge (198) ‘that it was party to
arrangements  which,  subject  to  the  appreciability
of their effect on inter-State trade, infringed Article
85(1).  In  those  circumstances  and  given  the
reduction in the scope of the allegations in the SO,
is  substantial  common  ground  between
there 
the  Commission’ (199).  Whilst
T & L 
Tate & Lyle  argues  that  it  would  have  followed
British  Sugar’s  move  to  a  higher  pricing  strategy,
when  the  latter  decided  to  end  the  price  war,
whether  or  not  it  had  been  directly  informed  of
this  fact  by  British  Sugar,  it  accepts (200),  that  ‘the

and 

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contacts  that  took  place  may  have  affected  the
speed  of  the  ending  of  the  price  war,  but  they
could  not  affect  the  outcome’ (201).  Tate & Lyle
admits  that  the  arrangements  in  question  had
anti-competitive effects but argues that these effects
were ‘minimal’ (202)  or  ‘very  limited’ (203).

2.1.3.  Napier  Brown’s  arguments

of 

objections (204) 

(84)  Napier  Brown  in  its  written  reply  to  the  revised
statement 
that
‘coordination’  of  pricing  policy,  which  implied  a
consensus  between  the  different  suppliers,  was
meaningless  where  the  policy  was  dictated  by  one
dominant  supplier  which  all  the  other  suppliers
were  bound  to  follow.

states 

2.1.4.  James  Budgett’s  arguments

(85) 

James  Budgett  in  its  written  reply  to  the  revised
statement of  objections (205)  pointed  out  that  apart
from being commercially obliged to maintain some
of  its  unattractive  nominal  merchanting  business,
Budgett’s  commercial  position 
in  respect  of
principal  merchanting  was  also  largely  dependent
on  the  attitude  taken  by  the  two  UK  refiners
(British  Sugar,  in  particular,  and  Tate & Lyle)
which  could  in  practice  determine  the  profitability
of  Budgett’s  principal  merchanting  business.
Moreover,  Budgett  criticises (206)  the  fact  that  the
Commission  wrongly 
any
arrangements  or  understandings  between  British
Sugar  and  Tate & Lyle  were  ‘extended’  to  Napier
Brown  and  James  Budgett.

assumed 

that 

a 

for 

scope 

to 
that 

the  other 

there  was 

three  companies 

was  no  such  scope  when  they  stress  that  due  to
British Sugar’s strength on these markets there was
no  need 
to
coordinate pricing policy with it, because they had
no  other  choice  but  to  follow  British  Sugar’s
pricing  moves.  This  contrasts  sharply  with  the
confirmation  by  all  parties,  reiterated  in  their
the  revised  statement  of
written  replies 
objections (207), 
for
competition  between  all  four  of  them  and  that
such  competition  actually  took  place.  As  white
granulated  sugar  is  a  homogeneous  commodity,
competition  in  the  industrial  sugar  market  as  well
as  the  retail  sugar  market  is,  first  and  foremost,
price  competition.  Tate & Lyle,  in  particular,  with
a  share  of  about  38  to  40 %  in  the  white
granulated  sugar  market  in  the  UK  during  the
relevant  period,  was  potentially 
strong
competitor  of  British  Sugar,  which  held  about  51
to  54 %  of  that  market  during  that  period.  Whilst
Tate & Lyle  suffered  from  a  margin  disadvantage
compared  to  British  Sugar,  and  whilst  it  is  correct
that  Napier  Brown  and  James  Budgett  were
dependent on the two UK producers (British Sugar
and Tate & Lyle)  for  much  of  their  stock,  it  is  not
true  to  state  that  during  the  relevant  period  these
three  undertakings  had  no  room  to  act  as
competitors  of  British  Sugar,  and  of  one  another,
with  respect 
the  relevant  products.  The
behaviour  of  Tate & Lyle  during  the  price  war,
when  it  attempted  to  compete  with  British  Sugar
for  a  number  of  accounts,  is  ample  demonstration
of  this,  as  is  British  Sugar’s  own  evidence  of
attempts  to  acquire  Tate & Lyle’s  accounts  in  the
retail sugar trade. The same is true of the continual
endeavours  of  the  merchants  to  import  low-priced
white  granulated  sugar  and,  finally,  the  possibility
available to them of purchasing bulk supplies from
the  two  UK  producers  and  to  resell  it  in  smaller
amounts  at  higher  prices 
their  principal
merchanting  capacities.  In  particular,  it  has  not
been  demonstrated  by  the  parties  that,  had  British
Sugar  increased  the  prices  for  white  granulated
sugar  in  the  British  market,  there  would  not  have
been  scope  for  the  other  three  parties  to  undercut
those  increases  by  smaller  increases  or  by  no
increases  at  all.  This  should  at  least  have  been
possible  in  the  price  range  above  the  break-even
point (208).

to 

in 

2.1.5.  The  Commission’s  replies

(a)  B r i t i s h   S u g a r ’ s   p r i c e   l e a d e r s h i p

(86)  With regard to British Sugar’s price leadership, the
Commission  notes  several  inconsistencies  in  the
parties’  argumentation.  The  gist  of  the  issue  is
whether  British  Sugar’s  price  leadership  in  the
markets  for  industrial  and  retail  sugar  in  Great
Britain  during  the  relevant  period  left  scope  for
competition  by  the  other  three  companies.  On  the
one  hand,  the  parties  seem  to  suggest  that  there

(87)  Moreover,  in  a  tightly  oligopolistic  market,  price
leadership  is  not  exceptional  due  to  the  fact  that,
where there is only a small number of competitors,
it  is  —  in  comparison  with  a  non-oligopolistic

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it.  However, 

market  —  easier  for  each  of  them  ex  post  to
perceive  on  the  market  what  the  others  have  done
on 
the  existence  of  such  an
oligopolistic  market,  in  which  competition  for
structural  reasons  tends  to  be  limited  to  a  certain
extent, does not allow companies to go further and
ex  ante  actively  coordinate  their  future  pricing
policy.  On 
the  existence  of
uncertainty  as  to  the  pricing  intentions  of  the
companies  on  markets  of  the  described  kind  is  the
main  stimulus  to  competition.  As  the  Court  of
Justice  made  clear  in  Hoffmann-La  Roche (209),  in
markets  where  competition  is  already  limited,  the
Commission must be particularly vigilant to ensure
that  the  competition  which  does  exist  is  not
restricted.

the  contrary, 

(88)  On  the  basis  of  the  foregoing,  the  Commission
concludes  that  British  Sugar’s  price  leadership  in
the markets for industrial and retail sugar in Great
Britain did not preclude price competition between
the  four  parties  in  the  relevant  period (210).

to 

the 

the 

this, 

prejudice 

elements  of 

correct,  all 
complex
infringement  would  at  least  fall  into  the  category
of  concerted  practices.  The  categorisation  of  the
infringement  as  agreement  and/or  concerted
practice  has  taken  account  of  this  alternative  view
by making clear that the complex infringements as
a  whole  can  at  least  be  described  as  a  concerted
practice.  Without 
the
is  willing  to  give  below (213)  an
Commission 
example of an element which in its opinion can be
described  as  an  agreement.  Furthermore,  the
Commission  does  not  agree  with  the  proposition
that  those  elements  of  the  complex  infringement
which cannot be described as agreements cannot at
least  be  described  as  concerted  practices  because
no actual effect on the market has been sufficiently
demonstrated.  Finally,  it  has  to  be  recalled  that,
where  there  has  been  a  complex  infringement  of
is  not
considerable  duration,  the  Commission 
obliged  to  split  up  a  continuous  conduct,  which
was  —  as  in  this  case  —  driven  by  a  single
anti-competitive  object,  into  a  number  of  separate
infringements (214).

Since there was such scope for price competition, it
that  actual  and/or  potential  price
follows 
competition 
restricted  by
could  have  been 
agreement  and/or  concerted  practice  between  the
parties.

(aa)  The  significance  of  the  meetings

(b) A g r e e m e n t   a n d / o r   c o n c e r t e d   p r a c t i c e

(89)  The  subsequent  question  is  whether  there  actually
was  an  agreement  and/or  a  concerted  practice.  In
reply  to  the  parties’  arguments,  the  Commission
can  mainly  refer  to  what  has  already  been  stated
above  concerning  the  categorisation  of  a  complex
infringement  of  considerable  duration (211)  and
concerning  the  subject  matter  of  the  agreement
and/or  concerted  practice  at  issue  in  this  case (212).
A  comparison  between  what  the  Commission  says
and  what  the  parties  expressly  say,  or  do  not
mention  because  it  is  uncontentious,  shows  that
there  is  a  common  understanding  of  the  concepts
of  agreement  and  of  concerted  practice. 
In
response  to  British  Sugar’s  view  that  in  this  case
there  is  no  evidence  of  a  consensus  between  the
parties  about  joint  future  conduct  on  the  market,
and  that  therefore  there  cannot  have  been  any
element  in  the  complex  infringement  which  could
be described as an agreement, the Commission first
and  foremost  stresses  that,  even  if  that  view  were

(90)  According  to  the  parties,  there  cannot  have  been
an agreement and/or concerted practice concerning
the  pricing  of  white  granulated  sugar,  because  in
itself  to
the  meetings  British  Sugar  confined 
making  unilateral  announcements  about  its  pricing
policy,  while  the  other  three  parties  did  not  learn
anything  new  which  would  not  have  been  evident
in 
transparent  market.  The  Commission
considers  this  assertion  not  to  be  credible  for  a
number  of  reasons.

the 

Firstly,  if  the  market  was  as  transparent  as  the
parties describe it, and if the need to follow British
Sugar’s  pricing  moves  was  as  cogent  as  the  parties
claim,  it  is  not  understandable  why  the  first
meetings  and  the  series  of  subsequent  meetings
over  a  long  period  were  arranged,  nor  why  British
Sugar  did  not  simply  implement  its  pricing  policy
and  leave  it  to  the  other  parties  to  perceive  these
changes  in  the  market.  Not  even  the  key  meeting
of  20  June  1986  would  have  been  necessary  if  the
parties’  description  was 
in
comparison with merely monitoring on the market
which  pricing  moves  the  other  companies  had
taken, the regular meetings must have provided for
all  the  parties  an  ‘added  value’.  This  added  value
had  two  aspects:  on  the  one  hand,  the  meetings
provided  confirmation  for  each  of  the  parties  that
their  perception  of  how  the  three  other  respective

correct.  Thus, 

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companies  had  to  date  priced  in  the  market  place
was  correct;  on  the  other  hand,  the  meetings
provided  each  of  the  parties  with  an  appreciably
increased  certainty  as  to  the  other  participants’
intentions  concerning  future  pricing.

Secondly, if the organisation of meetings really was
British  Sugar’s  particular  style  of  informing  other
players  of  unilaterally  decided  price  changes  for
white  granulated  sugar,  it  is  not  explained  why
only  three  of  these  other  players  and  not  all  of
those  operating  in  the  UK  market,  especially  other
merchants (215),  were  invited,  despite  the  fact  that
the  information  given  would  have  been  of  equal
interest  to  all  of  them.  On  the  contrary,  the
exclusion  of  the  other  players  indicates  that  the
meetings  primarily  served  some  other  purpose  of
concern  only  to  the  four  parties  concerned  by  the
subject  of  this  Decision.

(bb) Agreement  and/or  concerted  practice  between

British  Sugar  and  Tate & Lyle

June  1986  was  not 

‘understanding’  with  which 

(91)  As  to  the  relationship  between  British  Sugar  and
Tate & Lyle,  Tate & Lyle’s  letter  to  the  Office  of
Fair  Trading  of  29  August  1990 (216)  can,  in  the
Commission’s view, be taken as evidence of a joint
intention  on  the  part  of  these  two  undertakings  to
conduct  themselves  on  the  market  in  a  specific
way (217),  namely  to  end  the  price  war  for  all
varieties of sugar, to increase prices and to abstain
from  aggressive  pricing  designed  to  gain  market
shares.  The 
the
representative  of  Tate & Lyle  came  away  from  the
meeting  of  20 
their
interpretation  of  a  unilateral  decision  taken  by
British  Sugar  and  announced  to  Tate & Lyle,  but
the result of the ‘discussions’ which the same letter
mentions.  Discussions  are  bilateral,  a  process  to
which  both  sides  contribute  and  at  the  end  of
which  there  is  either  disagreement,  indecision  or
agreement,  the  last-named  being  a  meeting  of
minds,  a  mutual  consent  about  the  future  conduct
of the discussion partners. In this case, it has never
been  British  Sugar’s  or  Tate & Lyle’s  argument
that  the  questions  and  issues  discussed  at  the
meeting  of  20  June  1986  resulted  in  disagreement
or  indecision.  Moreover,  the  allegation  that  the
pricing  decisions  were  unilaterally  taken  by  British
Sugar,  and  subsequently  only  announced,  is  not
compatible  Tate & Lyle’s 
the
meeting of 20 June 1986 ‘was significant in that it

statement 

that 

that 

set  the  background  principles  against  which  all
future  discussions  were  held’ (218).  Therefore,
looking  at  what  happened  at  the  meeting  of  20
June  1986  in  isolation,  the  Commission  is  of  the
the  complex
this  element  of 
opinion 
infringement  can  be  described  as  the  conclusion  of
an 
and
Tate & Lyle about pricing coordination of the kind
described.  The  remaining  elements  of  the  complex
infringement  would  at  least  fall  into  the  category
of  concerted  practices.

agreement  between  British 

Sugar 

about 

described 

(92)  Finally the joint memorandum submitted by British
Sugar  and  Tate & Lyle  on  15  April  1991  to  the
OFT (219), also, in the Commission’s view, provides
evidence  that,  at  their  initial  meeting  of  20  June
1986,  British  Sugar  and  Tate & Lyle  came  to  an
pricing
the 
agreement 
coordination.  It  is  reported  under  point  4b  of  that
memorandum  that  both  Tate & Lyle  and  British
Sugar  believed  that,  as  a  consequence  of  the
unilateral  decision  taken  by  British  Sugar  to  end
the  price  war,  British  Sugar  would  not  price
aggressively,  with  the  result  that  Tate & Lyle
would  not  price  aggressively  either,  although  there
would  nevertheless  remain  a  band  of  tolerance  in
relation  to  their  respective  market  shares.  This
shows  that  both  undertakings  shared  what  is
described as a ‘common belief’ about the nature of
their  future  conduct  on  the  market.  Since  this
conduct  was  not  something  steered  by  a  third
party,  British  Sugar  and  Tate & Lyle  were  the
masters  of  their  conduct.  Therefore,  what  the
memorandum  in  fact  reports  is  the  joint  intention
of  both  parties  to  price  in  the  future  in  a  certain
way.  In  the  Commission’s  view,  this  element  can
be  qualified  as  an  agreement  about  general  pricing
policies  between  competitors.  The  fact  that  it  was
not  reduced  to  writing,  and  that  no  express
sanctions  or  enforcements  measures  were  attached
to  it,  is  irrelevant (220).

Moreover,  the  reference  to  the  band  of  tolerance
relating  to  market  shares,  which  occurs  twice  in
point  4  of  the  memorandum,  points  to  the
existence  of  an  agreement  between  the  two
undertakings.  Market  shares  for  the  sale  of  a
homogeneous  product  like  white  granulated  sugar
are  first  and  foremost  the  result  of  pricing,  since
this is the principal competition parameter for such
a  product.  Accordingly,  unless  there  had  been  a
mutual  understanding  between  British  Sugar  and
Tate & Lyle,  at  least  about  their  general  pricing
policy, the notion of a band of tolerance relating to
market  shares  would  have  been  meaningless.

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(cc)  Agreement  and/or  concerted  practice  between
British Sugar, Tate & Lyle, Napier Brown and
James  Budgett

(dd) Concerted  practice  without  a  proof  of  actual

effect

(95)  Furthermore, 

Sugar’s
proposition, there can be a concerted practice even
in  the  absence  of  actual  effect  on  the  market.

contrary 

British 

to 

(93)  As far as the Napier Brown and James Budgett are
concerned,  there  is  not  a  key  meeting  comparable
to  the  one  of  20  June  1986.  But  the  Commission
has compiled evidence to show that Napier Brown
and James Budgett, during the meetings which they
attended,  took  an  active  part  in  the  discussions,
that  is  to  say,  in  the  bilateral  process,  about
industrial  sugar.  They  were  not  merely 
the
recipients  of  announcements  concerning  unilateral
decisions  taken  by  British  Sugar.

(94) 

In  its  letter  of  7  August  1990  to  the  OFT (221),
British  Sugar  admits  that  discussions  about  pricing
did  also  take  place  with  Napier  Brown  and  James
Budgett,  but  it  claims  never  to  have  amended  its
decisions  or  business  plan  as  a  result  of  such
discussions.  Here,  British  Sugar  has  confused  two
separate  questions:  firstly,  whether  there  was  a
concertation of the intentions of the participants in
the discussions, and secondly, whether the result of
this  concertation  coincided  or  not  with 
the
intention  which  one  party  (British  Sugar)  already
had  before  it  went  into  the  discussions.  As  to  the
first  point,  it  has  to  be  reiterated  that  it  did  not
make  sense  to  have  discussions  about  pricing  with
Napier  Brown  and  James  Budgett  it  they  had
nothing  to  contribute  to  these  discussions.  In  fact,
it is known, that Napier Brown and James Budgett
had  a  threat  potential  and  bargaining  power  in
these  discussions,  in  the  form  of  the  possibility  of
resorting to aggressive marketing of imports which
would  have  frustrated  British  Sugar’s  strategy  of
increasing  prices  on  the  UK  market  while  still
selling  its  entire  A/B  quota  there (222).  This  is,  for
example,  evidence  by  the  document  about  James
Budgett’s  business  strategy  1987-90 (223).  The
seriousness  of  the  discussions  with  Napier  Brown
and James Budgett is also evidenced by the internal
Tate & Lyle  memorandum  which  reports 
that
British  Sugar  discussed  a  certain  increase,  which  it
wished  to  occur  in  the  industrial  sugar  market,
with  the  chairman  and  joint  managing  director  of
Napier  Brown (224).  If  there  had  been  no  need  for
British  Sugar  to  obtain  a  consensus  with  Napier
Brown and James Budgett about the parties’ future
industrial  sugar-pricing  policy, 
including  price
differentials  between  purchasers  of  larger  and  of
smaller  quantities,  those  discussions  would  have
served  no  purpose.

(96)  Firstly,  the  wording  of  Article  85(1)  of  the  Treaty
itself shows that a concerted practice which has an
anti-competitive object is sufficient to constitute an
infringement  which  is  caught  by  that  provision.

it  any  direct  or 

(97)  Secondly,  the  judgement  of  the  Court  of  First
Instance  in  the  Rhône-Poulenc  case (225)  accepts
that  there  can  be  a  concerted  practice  when  an
anti-competitive  object  alone  is  pursued.  In  this
respect,  the  relevant  part  of  this  judgment (226)  is
based  on  the  earlier  Suiker  Unie  judgment (227).
Both  judgments  demonstrate  how  far-reaching  the
prohibition  of  concerted  practices  is  by  including
in 
indirect  contact  between
economic operators, the object or effect whereof is
either to influence the market conduct of an actual
or  a  potential  competitor,  or  to  disclose  to  such  a
competitor  the  course  of  conduct  which  they
themselves  have  decided  to  adopt  or  contemplate
adopting  on  the  market.  For  the  case  to  be
decided, the Court then stated  (228) with regard to
certain  meetings,  which  formed  part  of  a  complex
infringement  of 
that
Rhône-Poulenc  could  not  have  failed  to  take
account,  directly  or  indirectly,  of  the  information
obtained  during  the  course  of  these  meetings  with
its  competitors.  Likewise,  these  competitors  were
bound  to  have  taken  into  account  directly  or
indirectly,  the  information  disclosed  to  them  by
Rhône-Poulenc  about  the  conduct  which  Rhône
Poulenc  itself  had  decided  upon  or  which  it
contemplated  adopting  on  the  market.  The  Court
did  not  look  at  the  effects  of  the  contacts  between
the competitors but simply concluded (229)  that  the
Commission  was  justified,  solely  on  the  basis  of  a
conclusion  as  to  the  purpose  of  the  meetings  in
categorising them as concerted practices within the
meaning  of  Article  85(1)  of  the  Treaty.

considerable  duration, 

From  the  Rhône-Poulenc  and  the  Suiker  Unie
judgements  it  may  be  seen  that:

—  contacts 

between 

competitors  with 

an
anti-competitive  object  alone  can  constitute  a
concerted  practice  within  the  meaning  of
Article  85(1),

—  disclosure  between  competitors  of  market
behaviour  which  has  been  decided  or 
is
contemplated  amounts  at  least  to  a  concerted

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practice,  because  this  information  is  bound  to
be  taken  into  account  by  those  competitors  in
determining  their  conduct  on  the  market.

2.2.  The  transparency  of  the  sugar  market;
privileged information in advance of other sources;
the  value  of  the  pricing  information  provided  at
the  meetings;  the  function  of  the  meetings  and
their  anti-competitive  effect  in  the  market

2.2.1.  British  Sugar’s  arguments

explained 

its  decision 

(98)  British  Sugar  argues  that,  even  if  it  had  not
informed  Tate & Lyle  of  its  decision  to  end  the
price  war  they  would  in  any  event  have  realised
that  it  had  taken  that  decision.  On  20  June  1986,
it  was  reported  in  The  Financial  Times  that  the
managing  director  of  British  Sugar  had  resigned.
This  is  the  same  date  as  the  meeting  held  between
British  Sugar  and  Tate & Lyle  at  which  British
to  pursue  a
Sugar 
high-pricing  strategy.  On  25  June  1986,  it  notified
price  rises  for  sugars  to  the  trade.  British  Sugar
argues  that,  as  a  consequence  of  these  facts,
Tate & Lyle  would  in  any  event  have  been  fully
aware  of  British  Sugar’s  change  in  policy.  In
addition  to  this,  British  Sugar  maintains  that  the
actual advance warning given by it to Tate & Lyle,
Napier  Brown  and  James  Budgett  of  its  changed
overall approach, and of individual price rises, was
limited.  After  the  meeting  on  20  June  1986,  for
example, British Sugar claims to have informed the
trade  of  its  new  retail  sugar  price  lists  on  25  June
1986;  these  were  to  take  effect  on  14  July  1986.
This would mean that in this instance Tate & Lyle
had 
the
changes (230).

advance  warning  of 

five  days 

(99) 

In  addition  to  this,  British  Sugar  argues  the
following:

(a)  I n d u s t r i a l   s u g a r

(100)  Regarding  the  quality  of  the 

industrial  sugar
information  provided  by  British  Sugar 
to
Tate & Lyle,  Napier  Brown  and  James  Budgett  at
the  meetings,  whilst  British  Sugar  admits  that
during  these  meetings 
its  basic
pricing  intentions  and,  on  one  occasion,  handed
out price matrix, it argues that no anti-competitive
effect  was  engendered  because  there  was  no

it  announced 

regarding 

discussion 
information
concerning sales to individual industrial customers,
price  information,  delivery  terms,  credit  loans,
etc. (231).

specific 

(101)  Moreover, British Sugar points out that the matrix
did  not  set  a  minimum  price  and  that  the  matrix
prices  bore  no  relationship  to  actual  transaction
prices. In support of the argument that the matrix,
or  general  information  regarding  price  changes,
provided  at  the  meetings  had  no  effect  on  the
actual  competitive  behaviour  of  the  companies
involved,  British  Sugar  submits  an  analysis  of  the
differences between the matrix price and the prices
actually  charged  to  a  selection  of  11  major
industrial  customers  during  the  relevant  period.
This  analysis  demonstrates  significant  and  varying
differences (232).  British  Sugar  argues  that,  as  the
Commission accepts that there was no relationship
between  the  matrix  and  the  actual  prices,  it  must
that  effective
accept,  as  a  matter  of 
competition  was  unaffected  by  the  industrial  sugar
meetings (233).

logic, 

(102)  British  Sugar  also  points  out  that  there  is  no
evidence  that  industrial  sugar  prices  would  have
been 
taken
place (234).

the  meetings  had  not 

lower 

if 

(b) R e t a i l   s u g a r

(103)  With  respect  to  retail  sugar,  British  Sugar  accepts
in its reply to the initial statement of objections as
well  as  in  its  reply  to  the  revised  statement  of
objections  that  it  met  Tate & Lyle  on  a  regular
basis and several times provided it with an advance
copy  of  its  retail  price  list.  However,  British  Sugar
argues  that  this  action  could  not  conceivably  have
had  any  effect  on  Tate & Lyle’s  pricing  practices,
trivial,  had  no
the  meetings  were 
that 
anti-competitive  object  and  were 
incapable  of
appreciably  affecting  competition  between  British
Sugar  and  Tate & Lyle (235).  As  evidence  of  this,
British  Sugar  argues  that  shortly  after  providing  a
copy  of  the  list  to  Tate & Lyle,  it  made  the  list
generally available to the sugar trade. British Sugar
considers  that,  of  the  seven  occasions  on  which
Tate & Lyle  believes  that  the  two  companies  met
regarding retail sugar, on only three occasions were
price lists handed over. According to British Sugar,
on  these  three  occasions  the  trade  received  the
price  lists,  respectively  five  days  after,  four  days
before and two days after the meetings, and in one

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case  this  was  even  after  publication  of  the  price
list (236).  British  Sugar  claims  that  these  price  lists
were  never  seen  in  draft  form,  and  were  never
modified following the meetings (237). British Sugar
furthermore  claims  that  the  main  subject  matter
discussed  at  these  meetings  (and  the  only  matter
discussed  when  price  lists  were  not  handed  out)
was  not  related  to  pricing  or  other  competitive
matters,  but  concerned  general  issues  such  as  the
activities of the Sugar Bureau, a generic advertising
campaign  for  sugar,  bar-coding  of  products  etc.
British  Sugar  argues 
it  never  discussed
individual  accounts  with  Tate & Lyle,  nor  did  it
ever  discuss  the  levels  of  discounts  that  could,
would  or  should  be  granted  from  the  price  list.
British  Sugar  therefore  argues  that  the  practices
had  no  appreciable  effect  on  competition (238).

that 

(104)  Thus,  according  to  British  Sugar,  retail  price  lists
gave  no  reliable 
indication  of  prices  actually
charged,  and  would  not  have  been  useful  to
Tate & Lyle  in  attempting  to  align  its  prices  with
those  of  British  Sugar.  According  to  British  Sugar,
it  was  impossible  to  calculate  from  the  list  price
what  any  customer  would  actually  be  paying  for
white 
Sugar
produced  evidence  comparing  its  retail  list  prices
with the net prices actually paid by its major retail
customers.  This  shows  that  in  the  relevant  period
there  were  significant  and  varying  differences
between  the  list  prices  and  net  prices  actually  paid
by  individual  customers (240).

sugar (239).  British 

granulated 

(105)  As  evidence  that  the  provision  of  retail  price  lists
had  no  effect  on  the  behaviour  of  the  two
companies,  British  Sugar  further  provided:

—  copies  of  internal  memos  demonstrating  that
during the relevant period British Sugar actively
sought  to  gain  business  from  Tate & Lyle  on  a
number of occasions by offering terms different
from  those  of  its  rival (241).

(106)  British  Sugar  also  argues  that  if  the  effect  of  the
provision  of 
information  to  Tate & Lyle  had
resulted  in  the  effective  organisation  of  the  market
between the two companies, leading to a similarity
of pricing and a lack of competition between them
for  individual  accounts,  one  would  have  expected
complaints  from  the  retailers,  or  at  least  some
evidence  of  price  fixing  to  have  been  supplied  by
them (242).  Moreover,  in  its  reply  to  the  revised
statement  of  objections,  British  Sugar  stresses  that,
contrary 
the
Commission,  retail  sugar  prices  did  not  increase
materially  as  a  result  of  discretionary  pricing
decisions  taken  by  British  Sugar (243).

impression  created  by 

the 

to 

information  was  not 

In  the  light  of  this,  British  Sugar  concludes (244)
that  ‘what  took  place  was  simply  limited  advance
notice,  albeit  to  a  competitor,  that  a  revised  price
list increase would be announced on a certain date.
Such 
confidential  or
proprietary and would have already been discussed
with  many  customers’ (245).  Thus,  British  Sugar
states (246):  ‘It  follows  that  the  meetings  and  the
passing  of  information  had  no  actual  effect  on  the
competitive  behaviour  of  the  parties’ (247).  In  its
reply  to  the  revised  statement  of  objections  British
Sugar  concludes  that,  regarding  the  Commission’s
allegation  of  coordination  of  a  collaborative
strategy of higher prices, it is impossible to discern
any  evidence  of  such  coordination  or  to  discern
any  general  price  effect  attributable  to  such
coordination (248).

—  a  comparison  containing  the  dates  on  which
changes  in  British  Sugar’s  and  in  Tate & Lyle’s
respective  price  lists  became  effective,  the  dates
on  which  the  trade  was  notified  of  these
changes,  the  retail  sugar  prices  respectively
listed  by  the  two  companies  and  the  dates  of
meetings  concerning  general  and  retail  issues
held  between  Tate & Lyle  and  British  Sugar.
This  shows  wide  variations  between  the  two
companies 
the  dates  of
respect  of 
notification  and  implementation  of  their  price
changes  as  well  as  in  their  prices  listed,

in 

(107)  Moreover,  in  its  reply  to  the  revised  statement  of
objections,  British  Sugar  attacks  the  Commission’s
case regarding the advance provision of retail price
lists  and  advance  warning  of  intended  retail  price
list changes. British Sugar identifies four sources of
evidence concerning the retail pricing meetings: the
correspondence  with  the  Director-General  of  Fair
Trading 
Sugar’s
from  Tate & Lyle,  British 
correspondence  with  him,  British  Sugar’s  reply  to
the  first  statement  of  objections  and  the  evidence
given  by  (the  relevant  executive;  deleted,  business
secret)  for  British  Sugar,  both  orally  and  in  his
affidavit.

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(108)  British 

Sugar 

describes 

admitted 
decided 

by  Tate & Lyle, 
it 
describe 
to 

Tate & Lyle’s
correspondence  with  the  Director-General  of  Fair
Trading as erratic and unclear (249). It points to the
fact 
that  Tate & Lyle’s  representations,  given
during  the  investigations  on  27  May  1994,  as  to
the  time  by  which  it  claims  to  have  received
advance  knowledge  of  British  Sugar’s  price
increases  differ  between  ‘3  or  4  weeks’  and  ‘by  a
week  or  two’.  British  Sugar  criticises  the  fact  that,
despite  the  confusion  about  the  extent  of  advance
the
knowledge 
Commission 
as
‘considerable’ (250).  British  Sugar  reiterates  that,  on
the  three  occasions  when  price  lists  were  handed
over  to  Tate & Lyle,  the  trade  received  the  price
list,  respectively  five  days  after,  four  days  before
and  two  days  after  the  meetings.  The  price  lists
were  never  seen  in  draft  form  and  were  never
modified following the meetings. British Sugar also
says 
supporting
Tate & Lyle’s  contention  of  advance  signalling  of
intended  price-list  changes  by  British  Sugar (251).  It
concludes (252)  that  there  was  no  need  for  any
advance  warning  of  an  imminent  price  change
because  this  information  was  predictable  and  had
usually  already  been  discussed  with  customers.
British 
concurs  with  Tate & Lyle’s
description  of  the  retail  sugar  meetings  as  ‘just  a
safety  factor,  a  belt  and  braces  job  really’ (253).

is  no  evidence 

Sugar 

there 

that 

Sugar’s  dominance  enabled  it  to  give  effect  to  its
unilateral  decisions  with  or  without  Tate & Lyle’s
acceptance  and  that  Tate & Lyle’s  vulnerability
precluded  it  from  exercising  any  real  freedom  of
choice of the kind normally implied by expressions
such 
and
as 
‘collusion’ (255).

‘coordination’, 

‘collaboration’ 

to 

the 

‘that 

party 

it  was 

(110)  Notwithstanding  this,  Tate & Lyle  in  its  reply  to
the  revised  statement  of  objections  continues  to
acknowledge (256) 
to
arrangements  which,  subject  to  the  appreciability
of their effect on inter-State trade, infringed Article
85(1).  In  those  circumstances  and  given  the
reduction in the scope of the allegations in the SO,
there 
is  substantial  common  ground  between
T & L  and  the  Commission’ (257).  Already  in  its
initial  statement  of  objections
reply 
Tate & Lyle  had  acknowledged (258) 
the
contacts gave rise to an arrangement which, subject
to  the  appreciability  of  its  effect  on  trade  between
Member  States,  fell  within  the  prohibition  of
Article  85’ (259).  Whilst  Tate & Lyle  argues  that  it
would  have  followed  British  Sugar’s  move  to  a
higher  pricing  strategy  when  the  latter  decided  to
end  the  price  war,  whether  or  not  it  had  been
directly  informed  of  this  fact  by  British  Sugar,  it
concedes (260)  that  ‘the  contacts  that  took  place
may  have  affected  the  speed  of  the  ending  of  the
price  war,  but 
the
outcome’ (261).

they  could  not  affect 

‘that 

2.2.2.  Tate &Lyle’s  arguments

the 

facts  as 

it  understands 

(109)  In  its  replies  to  the  initial  statement  of  objections
as  well  as  to  the  revised  statement  of  objections,
Tate & Lyle pursues a similar line to British Sugar.
However  it  reaches  a  different  conclusion  on  the
them.
basis  of 
Tate & Lyle  argues  that  its  contacts  with  British
Sugar  and  the  advance  provision  by  British  Sugar
of  its  price  lists  did  not  result  in  any  significant
change to its long-term pricing patterns, because in
any  event  it  would  have  followed  the  pricing
initiatives  of  British  Sugar  which  it  would  have
determined  through  its  market  intelligence (254).
Moreover,  in  its  reply  to  the  revised  statement  of
objections,  Tate & Lyle  attacks  the  Commission’s
description  of 
the
parties  as  ‘coordination  of  their  pricing  policy’,
‘price  collusion’  and  ‘collaborative  strategy  of
higher  pricing’.  Tate & Lyle  reiterates  that  British

the  arrangements  between 

(111)  Regarding  the  effects  of  the  regular  meetings
between  British  Sugar,  Tate & Lyle,  Napier  Brown
and  James  Budgett,  and  the  advance  provision  by
British Sugar of its retail price lists, Tate & Lyle, in
its  reply  to  the  initial  statement  of  objections,
agrees (262)  that  ‘At  most,  the  communication  of
to
such  decisions  could  be  expected  only 
short-circuit 
the  normal  process  of  market
intelligence,  and  to  accelerate  the  adjustment  to
those  decisions  which  the  market  would  in  any
event  have  had  to  make’ (263).

In  the  same  reply,  Tate & Lyle  also  reiterates (264),
with  reference  to  page  3  of  the  transcript  of
investigations  carried  out  at  the  premises  of
Tate & Lyle,  that  ‘the  information  provided  gave
T & L  a  certain  degree  of  comfort  regarding  BS’
intended  pricing  policy’ (265).  In  relation  to  retail
sugar,  Tate & Lyle  concedes  (266)  that  ‘Although
T & L  received  advance  warning  of  BS’  intention
to  change  its  retail  list  prices  and  its  broad  retail
discount  policy  such  information  was  of  little

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commercial  value  and  merely  provided  limited
comfort  that  BS  were  not  intending  to  resume  the
price  war.  Moreover,  receipt  of  such  information
did  not  affect  end  prices  or  the  timing  of  the
implementation  of  T & L’s  new  retail  prices,  but
simply enabled T & L to publish its own new retail
price lists a little earlier than might otherwise have
been  the  case’ (267).

(112)  Moreover,  Tate & Lyle  points  out  that,  although
the  revised  statement  of  objections  recognises  the
margin  disadvantage  suffered  by  Tate & Lyle
during the relevant period, it denies that as a result
Tate & Lyle  had  no  room  to  compete  with  British
Sugar (268). According to Tate & Lyle, the fact that
it  was  forced  during  the  price  war  to  respond  to
British  Sugar’s  aggressive  behaviour  provides  no
evidence  that  it  had  any  independent  ability  to  act
as  a  competitor  of  British  Sugar (269).

(113)  Finally,  Tate & Lyle  submits  that,  due  to  the
special characteristics of the sugar market resulting
from 
the
arrangements  in  this  case  are  devoid  of  any
significant  effects (270).

the  Community 

scheme, 

sugar 

2.2.3.  Napier  Brown’s  arguments

(114)  According  to  Napier  Brown (271),  the  Commission
is  mistaken  when  stating  that  the  information
supplied by British Sugar would have been difficult
to  gather  piecemeal  from  the  market.  Rather,
Napier  Brown  concurs  with  James  Budgett  in
saying  that  market  forces  provided  very  accurate,
rapid  information  about  general  price  levels,  and
that  information  concerning  British  Sugar’s  matrix
was  rapidly  and  accurately  communicated  via  the
market  (especially  customers),  at  least  to  all  major
players.  Moreover,  Napier  Brown  thinks  that  the
Commission’s allegation of a collaborative strategy
of higher pricing is wholly unsupported by facts or
evidence (272).

2.2.4.  James  Budgett’s  arguments

(115)  James  Budgett  in  its  reply  to  the  revised  statement
of  objections (273) 
sort  of
stresses 
information  provided  by  British  Sugar  was  not
such  as  to  allow  James  Budgett  to  change  its
negotiating  position  with  customers.  According  to
James  Budgett,  the  market,  including  in  particular

that 

the 

the  merchants,  was  well  aware  of  British  Sugar’s
general  pricing  aspirations.  Consequently, 
the
statements of British Sugar at the meetings did not
add  to  James  Budgett’s  knowledge  of  British
Sugar’s  desire  as  to  the  general  direction  of  white
granulated  sugar  prices,  nor  did  they  affect  the
prices  or  the  pricing  policy  of  James  Budgett.  It
states (274) that it did not understand the matrix as
constituting  minimum  or  target  prices  for  British
Sugar.  James  Budgett  claims  to  have  been  aware
that individual pricing decisions varied, but to have
obtained  from  the  meetings  the  reassurance  that
this  would  not  be  the  result  of  British  Sugar’s
salesmen  systematically  discriminating  without  the
knowledge  of  their  management.

2.2.5.  The  Commission’s  replies

(a)  T h e   r e l e v a n c e   o f   e f f e c t s   c r e a t e d   b y   t h e
a g r e e m e n t   a n d / o r   c o n c e r t e d   p r a c t i c e

(116)  The  Commission  accepts 

In 

to 

the 

that 

admitted 

1990 (275)  Tate & Lyle 

it  cannot  be
concluded  on  the  basis  of  the  facts  that  the
companies 
individual
in  question  discussed 
customer  accounts  or  the  discounts  to  be  granted,
with  regard  to  either  industrial  or  retail  sugar.  In
its  letter  to  the  Office  of  Fair  Trading  dated  16
July 
that
discussions  on  such  matters  took  place  by  stating
that  ‘It  also  appears  that  sometimes  information
was  exchanged  between  the  companies  about  the
specific
volume  discounts  being  applied 
customers’ (276). 
letter (277),
same 
Tate & Lyle  stated  also  that  ‘In  connection  with
customer  negotiations 
information  has  been
exchanged  about  changes  in  the  discounts  that
would  be  offered  to  some  of  the  larger  customers
(who  took  supplies  from  both  companies)’ (278).
However,  Tate & Lyle  later  stated  in  the  joint
British  Sugar/Tate & Lyle  memorandum  to  the
Office of Fair Trading of 15 April 1991 (279) under
point 4 that ‘During the arrangement, BS informed
TLS, before it made a general announcement to its
customers,  of  changes  in  list  prices,  and  discount
policy,  although  TLS  was  not  informed  of  any
specific  price  or  discount  which  was  to  be  quoted
to a specific customer’ (280). British Sugar explicitly
denies 
took  place.
such  discussions 
Tate & Lyle  has  not  provided  a  convincing
its  earlier
it 
explanation  of  why 

retracted 

that 

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22.3.1999

statements.  There  is  also  no  indication  that  these
earlier  statements  were  made  under  duress  or  that
Tate & Lyle  had  some  other  reason  for  giving  a
false account of the facts. However, in the absence
of  any  other  evidence  supporting  Tate & Lyle’s
original  version  of  events, 
the  Commission
considers that it is not able to prove that individual
accounts, or the discounts granted from price lists,
were  discussed,  or  that  information  about  changes
in discounts to be offered to specific customers was
exchanged  during 
the
Commission  does  not  challenge  the  information
provided  by  British  Sugar,  according  to  which
significant and varying discounts were granted, nor
the  fact  that  in  particular  cases  British  Sugar  and
Tate & Lyle  competed  for  individual  accounts.

the  meetings.  Equally, 

(117)  The  Commission  does,  however,  disagree  with  the
conclusions  drawn  by  the  parties  from  these  facts
and  observations.  While  the  Commission  does  not
maintain  that  the  agreement  and/or  concerted
practice  had  no  effect,  it  accepts  that  it  is  not
possible  for  the  Commission  to  calculate  the
precise  effect  in  terms  of  the  prices  that  would
have  been  set  by  Tate & Lyle,  Napier  Brown,
James  Budgett  and  British  Sugar  if  the  meetings  to
discuss  pricing  policy  had  not  taken  place  or  if
British  Sugar  had  not  given  advance  notice  of  its
is  not
price  modifications.  Such  an  exercise 
possible,  as  no  parallel  situation  can  be  pointed  to
which  might  serve  as  a  benchmark  by  which  a
meaningful  comparison  could  be  made.

(118)  In  any  event,  the  Commission  is  not  required  to
examine the consequences of the agreement and/or
concerted practice in terms of its effect on prices in
infringement  of  the
order  to  demonstrate  an 
competition 
an
suffices 
It 
anti-competitive  object  can  be  attributed  to  the
conduct.

rules. 

that 

(119)  Article  85(1)  states  that  the  ‘following  shall  be
prohibited  as 
incompatible  with  the  common
market:  all  agreements  between  undertakings,
decisions  by  associations  of  undertakings  and
concerted practices which may affect trade between
Member  States  and  which  have  as  their  object  or
effect  the  prevention,  restriction  or  distortion  of
competition  within  the  common  market  . . .’.  As
the  Court  of  Justice  confirmed  in  its  judgment  in
Consten and Grundig (281) ‘there is no need to take
account  of  the  concrete  effects  of  an  agreement

to 

or 

by 

the 

less 

that 

(. . .) 

stating 

distortion 

case (282). 

restriction 

took  part, 

regard 
(. . .) 

together  with 

Rhône-Poulenc 

the  producers 

state  with 
‘Accordingly, 

once  it  appears  that  it  has  as  its  object  the
prevention, 
of
competition’.  This  was  also  confirmed  by  the
Advocate-General  and  the  Court  of  First  Instance
The
in 
Advocate-General  considered  that  ‘if  it  is  certain
that  concertation  having  an  unlawful  object  has
taken  place  and  if  . . .  it  can  be  assumed  that  the
undertakings  have  acted  on  the  basis  of  that
concertation  even  if  the  Commission  adduces  no
evidence of the concrete acts (practice), there is . . .
a  concerted  practice  with  an  unlawful  object
covered by Article 85. When undertakings act with
justified
greater  knowledge  and  more  or 
expectations  about  other  undertakings  than  they
should  have  and  normally  would  have,  there  is
always  a  clear  risk  that  competition  will  be  less
intense than it otherwise would have been’ (283). As
was  indicated  above (284),  in  its  judgment  in  that
case,  the  Court  of  First  Instance  confirmed  the
Advocate-General’s 
that
view 
Rhône-Poulenc  ‘through  its  participation  in  those
meetings, 
its
competitors,  in  concerted  action  the  purpose  of
which  was  to  influence  their  conduct  on  the
market  and  to  disclose  to  each  other  the  course  of
conduct  which  each  of 
itself
contemplated  adopting  on  the  market’ (285).  The
to
Court  went  on 
Rhône-Poulenc 
in
determining  the  policy  which  it  intended  to  follow
on  the  market,  it  could  not  fail  to  take  account,
directly  or  indirectly,  of  the  information  obtained
during  the  course  of  those  meetings.  Similarly,  in
determining  the  policy  which  they  intended  to
follow,  its  competitors  were  bound  to  take  into
account,  directly  or  indirectly,  the  information
disclosed  to  them  by  (Rhône-Poulenc)  about  the
course  of  conduct  which  (Rhône-Poulenc)  itself
had  decided  upon  or  which 
it  contemplated
adopting  on  the  market’ (286).  On  this  basis  alone,
and  without  looking  at  possible  effects,  the  Court
concluded  that  the  Commission  was 
justified,
having  regard  to  the  purpose  of  certain  meetings,
in  categorising  them  as  ‘concerted  practices’ (287).
Likewise,  with  regard  to  the  common  intentions
existing  between  certain  undertakings  and  relating
to  target  prices  and  target  volumes,  the  Court
stated  that  the  Commission  was  entitled  to  treat
those  elements  of  the  complex  infringement  as
‘agreements’  within  the  meaning  of  Article  85(1).
In  this  regard,  too,  the  Court (288)  did  not  look  at
the  possible  effects  of  these  agreements  but  merely
cited  the  established  case-law (289),  according  to
which,  in  order  for  there  to  be  an  agreement  it  is
sufficient 
the  participating  undertakings
should  have  expressed  their  joint  intention  to
conduct  themselves  on  the  market  in  a  specific
way.  On  these  bases,  and  again  with  looking  at
possible  effects,  the  Court  finally  concluded  that
the  Commission  was  also  entitled  to  describe  the
continuous  conduct,  which  had  been  characterised
by a single purpose, as a single infringement under
the  denomination 
‘agreement  and  concerted
practice’ (290).

that 

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(b) T h e   t r a n s p a r e n c y   o f   t h e   s u g a r   m a r k e t ;
p r i v i l e g e d   i n f o r m a t i o n   i n   a d v a n c e   o f
o t h e r   s o u r c e s ;   t h e   v a l u e   o f   t h e   p r i c i n g
i n f o r m a t i o n   p r o v i d e d   a t   t h e   m e e t i n g s ;
t h e   f u n c t i o n   o f   t h e   m e e t i n g s

(120)  In  order  to  address  the  arguments  raised  by  the
parties  under  these  headings,  it  is  useful  to  further
substantiate  the  function  and  the  value  which  the
continuous  meetings  had  for  them.  This  leads  to
the 
convincing
explanation  for  the  parties’  frequent  meetings  over
a  long  period  is  the  joint  pursuit  of  the  object  of
their
restricting  competition  by  coordinating 
pricing  policy  on  the  market 
in  the  manner
described (291).

conclusion 

the  only 

that 

to 

(121)  As  regards  industrial  sugar,  it  is  established  (292)
that  during  the  meetings  British  Sugar  announced
its  intentions  as  to  general  future  price  increases
and  as 
increase  of
the  maintenance  or 
differentials in the prices to purchasers of larger or
smaller  quantities  of  industrial  sugar.  It  is  also
established  that  this  was  done  on  the  basis  of  a
pricing  matrix  established  by  British  Sugar,
showing  its  target  prices  according  to  calendar
quarter  and  tonnage  purchased.  The  parties  also
do  not  deny  that,  at  least  on  one  occasion,  the
British  Sugar  matrix  was  handed  over 
to
Tate & Lyle,  Napier  Brown  and  James  Budgett,
and that on the occasions when the matrix was not
in  the
actually  handed  over,  the  participants 
meetings  were  provided  with  information  similar
to that contained in that matrix. It has been shown
above (293)  that  the  regular  meetings  over  a  long
period provided all of the participants — including
British  Sugar,  in  spite  of  its  price  leadership  —
with the assurance of a continuing common policy
of higher pricing which they could not have gained
by 
the
developments on the market (294).  It  is  uncontested
that  Napier  Brown  and  James  Budgett  also  had  a
specific 
the  differentials  between
purchasers  of  larger  and  smaller  quantities  of
industrial  sugar  as  indicated  in  the  matrix (295).
Furthermore,  it  has  been  shown  that  British  Sugar
had  a  specific  interest  in  involving  Napier  Brown
and  James  Budgett  in  the  collusion  in  order  to
control  their  threat  potential  which  was  based  on
the  possibility  of  imports  and  which  could  have
substantially  damaged  British  Sugar’s  strategy  of
combining  high  pricing  with  its  ability  to  sell  its
entire  A/B  sugar  quota  in  the  UK.  Finally,  during
investigations  carried  out  at  Tate & Lyle  on  27
May  1994,  that  company  confirmed  that  the

individually  monitoring 

interest 

simply 

in 

information  contained  in  the  matrix  was  useful  in
that  it  gave  Tate & Lyle  an  indication  of  British
Sugar’s  pricing  intentions (296).  Even  in  its  reply  to
the  revised  statement  of  objections,  which  reply  is
characterised by Tate & Lyle’s general retraction of
a lot of what it had said earlier in the proceedings,
Tate & Lyle  admits (297)  that  ‘the  information  was
intentions’ (298).
of  use  as 
Tate & Lyle  confirms (299)  ‘that  the  information
provided  gave  T & L  a  certain  degree  of  comfort
regarding  BS’  intended  pricing  policy’ (300).

to  BS’  probable 

(122)  As regards retail sugar, it is established that British
Sugar  on  at  least  two  occasions  handed  over  to
Tate & Lyle  a  copy  of  its  new  retail  price  list  in
advance  of  circulating  it  to  the  trade (301).  British
Sugar  concludes (302)  that  ‘what  took  place  was
to  a
limited  advance  notice,  albeit 
simply 
competitor,  that  a  revised  price  list  increase  would
be  announced  on  a  certain  date’ (303).  Tate & Lyle
accepts (304)  that  it  ‘received  advance  warring  of
BS’  intention  to  change  its  retail  list  prices  and  its
broad retail discount policy’ (305). It states (306) that
the  advance  provision  of  British  Sugar’s  retail
pricing decisions could be expected to ‘short-circuit
the  normal  process  of  market  intelligence,  and  to
accelerate  the  adjustment  to  those  decisions’ (307).
Tate & Lyle also admits (308) that the receipt if that
pricing  information  ‘enabled  T & L  to  publish  its
own new retail price lists a little earlier than might
otherwise  have  been  the  case’ (309).  Moreover,  also
with  respect  to  retail  sugar  it  has  been  shown
above (310)  that  the  regular  meetings  over  a  long
period  provided  not  only  Tate & Lyle  but  also  —
and  despite  its  price  leadership  —  British  Sugar
with  assurance  of  a  continual  common  policy  of
higher  pricing  which  they  could  not  have  achieved
by simply individually monitoring developments on
the  market.

(c)  C o n c l u s i o n

(123)  While the Commission is not able to determine the
precise  anti-competitive  effect  of  the  meetings  in
terms  of  exact  price  levels  in  the  market,  on  the
basis  of  the  function  and  value  of  these  meetings

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for  the  parties,  it  is  nevertheless  established  that
the  parties  pursued  the  object  of  restricting
competition  by  pricing  coordination  between
them.

differential  between  industrial  and  retail  prices,
and  also  on  acceptable  differentials 
in  price
between  the  larger  and  smaller  customers’ (316).

2.3.  The  alleged  objects  of  the  meetings,
especially  the  undertakings

2.3.1.  British  Sugar’s  arguments

to 

to 

the 

to  British  Sugar, 

(124)  British  Sugar  argues  that  there  also  was  no
anti-competitive  object 
industrial-sugar
these
meetings.  According 
meetings  performed  three  functions (311):  first,  the
undertakings  given  by  British  Sugar 
the
Commission  during  the  Napier  Brown  procedure
in  1986  required  regular  contact  with,  and
reassurance  to,  the  merchants.  As  the  only  other
manufacturer in the UK market, Tate & Lyle had a
similar 
the  merchants;
in  reassuring 
second,  as  the  merchants  were  among  the  largest
customers  of  both  British  Sugar  and  Tate & Lyle,
major  interrelated  transactions  required  careful
coordination  between 
the
meetings;  third,  other  administrative  issues  needed
to  be  handled  jointly  across  the  trade.

the  participants 

interest 

in 

(125)  Likewise  for  retail  sugar,  British  Sugar  claims (312)
that  the  provision  of  retail  price  lists  had  no
anti-competitive  object.

(a)  T h e   u n d e r t a k i n g s

as 

its 

that 

stated 

in  establishing 

(126)  British Sugar, in its reply to the initial statement of
objections (313), 
a
already 
consequence  of  the  giving  of  these  undertakings,  it
was  ‘anxious  to  involve  the  merchants  in  pricing
decisions. They were competitors yet as customers,
they  derived  their  raw  materials  from,  inter  alia,
British  Sugar  . . .  If  British  Sugar  misjudged  the
situation 
industrial  price
schedules  or  in  its  sales  to  the  retail  trade,  the
merchants  would  have  been  the  first  to  complain.
This  is  why  bilateral  discussions  and  meetings
between  the  British  Sugar  and  each  merchant,
which  were  paralleled  by  meetings  between  T & L
and  each  merchant,  evolved  to  meetings  between
all  four  parties’ (314).  Furthermore,  British  Sugar
stated (315)  that  its  decision  to  engage  in  the
practices 
its
understanding  that,  in  order  to  comply  with  the
undertakings,  it  ‘was  obliged  to  consult  with  the
merchants  on  the  maintenance  of  an  acceptable

in  question  was  based  on 

(127)  In 

its 

the 

that 

charged 

the  undertakings  have 

to 
revised 
,  British  Sugar  argues 

statement  of
reply 
objections (317) 
that
‘Following  the  acceptance  of  the  undertakings  in
August  1986  the  merchants  acquired  a  special
“protected”  status  both  as  customers  and  as
competitors  of  British  Sugar’ (318).  British  Sugar
to  be
stresses 
interpreted  as  a  generalised  statement  that  the
merchants  had  a 
future,  and  as  a  blanket
prohibition  on  entering  into  pricing  policies  which
would have damaged the survival of the merchants,
whether  those  policies  concerned  the  merchants’
sale  of  either  retail  sugar  or  industrial  sugar (319).
Therefore,  British  Sugar  does  not  accept  the
Commission’s  reasoning (320)  that  it  is  hard  to
understand  how  British  Sugar’s  discussions  with
Napier  Brown  and 
James  Budgett,  which
exclusively concerned industrial sugar prices, could
have  served  to  implement  the  undertakings  which
the  differentials
did  not  specifically  mention 
to  purchasers  of
between  prices 
respectively large and small quantities of industrial
sugar,  while  they  expressly  mentioned  the  margin
between  industrial  and  retail  sugar  prices.  British
Sugar  recalls  that  the  bulk  of  Napier  Brown’s
trading business, and all of James Budgett’s, related
to  the  sale  of  industrial  sugar (321),  and  that  the
general  assurance  contained  in  the  undertakings  as
to  continued  existence  of  the  merchants  required
British  Sugar  to  avoid  discriminatory  pricing  for
industrial 
Sugar’s
perspective  it  was  vital  (. . .)  for  British  Sugar’s
prices  to  be  sufficient  for  the  merchants  to  secure
an adequate margin on resale in order for them to
survive’ (323).  On  the  one  hand,  British  Sugar’s
prices  to  the  merchants  had  been  too  high,  British
Sugar  would  have  been 
the
undertakings. On the other hand, if British Sugar’s
prices  to  other  customers  which  it  shared  with  the
merchants had been too low, the merchants would
have  been  discriminated  against  and  placed  at  a
competitive  disadvantage,  in  breach  of  Article  86
of  the  Treaty (324).  British  Sugar  stresses  that
Napier  Brown  and  James  Budgett  attended  the
meetings  as  customers,  not  as  competitors (325).
According to British Sugar (326), with regard to the
undertakings,  ‘it  was  essential,  for  the  parties  to
have  met  regularly  to  ensure  that  the  regime  was
in
working  as 
particular,  to  ensure  that  the  merchants  received
prices  which  were  non-discriminatory  having
regard  to  the  volumes  they  purchased  and  that
British Sugar would not discriminate against them,

intended  to  do  and, 

‘From  British 

in  breach  of 

sugar (322). 

it  was 

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especially  in  relation  to  customers  they  had  in
common’ (327).

2.3.3.  Napier  Brown’s  arguments

(128)  At  the  oral  hearing  on  18  and  19  April  1996,
British Sugar also raised the argument (328) that the
undertakings  were  accurately  reflected  in  its  ‘EEC
compliance  programme’,  drawn  up  in  December
1986. From the compliance programme, it cited in
particular  Section 
‘Unfair
pricing’,  as  proof  that  maintaining  an  insufficient
margin  between  industrial  and  retail  sugar  prices
was only one of a list of different forms of conduct
which  British  Sugar  had  understood  to  constitute
infringements  of 
the  Community  competition
rules.

subheading  2 

IV, 

(129)  According 

to  British  Sugar (329)  Tate & Lyle’s
presence  at  the  meetings  can,  in  part  be  explained
by  the  fact  that  Tate & Lyle,  which  —  according
to  the  Commission (330)  —  held  a  position  of  joint
dominance  together  with  British  Sugar,  was  a
potential  subject  of  a  complaint  by  the  merchants
and therefore had a strong interest in ensuring that
it  gave  no  reason  for  such  a  complaint.

(b) O t h e r   o b j e c t s   o f   t h e   m e e t i n g s

(130)  Moreover,  British  Sugar  in  its  reply  to  the  revised
statement  of  objections (331)  claims 
the
complex  commercial  relationships  between  the
parties  demand  frequent  meetings  between  them,
including  Tate & Lyle.  According  to  British  Sugar,
the  sale  and  purchase  arrangements  between  the
four  parties  were  discussed  and  finalised  during
these  meetings.

that 

2.3.2.  Tate &Lyle’s  arguments

(131)  Tate & Lyle hardly comments at all on the issue of
the  undertakings.  They  were  only  briefly
mentioned  in  its  letter  to  the  OFT  of  16  July
1990 (332)  and  during  the  oral  hearing (333).

Concerning the object of the meetings, Tate & Lyle
only  comments  very  briefly.  The  retail  sugar
meetings were described by Tate & Lyle during the
investigation  on  27  May  1994  as  ‘just  a  safety
factor,  a  belt  and  braces  job  really’ (334).

Moreover,  Tate & Lyle  claims (335)  that  there  were
‘other  legitimate  matters  of  general  interest  to  the
industry  to  be  discussed’ (336).

to 

traditionally 

(132)  Napier Brown, in its reply to the revised statement
of objections (337), underlines that the undertakings
were  concerned  with  the  role  of  the  merchants
generally and not just with pricing. The differential
between the prices of industrial and of retail sugar
was  only  one  element  in  the  Commission’s  Napier
Brown  Decision.  According  to  Napier  Brown,
British  Sugar’s  policy  of  drastically  reducing  the
differentials  between  prices  charged 
large
customers,  which  were  frequently  those  of  British
Sugar,  and  prices  charged  to  small  customers,
which  were 
the
merchants (338),  was  a  type  of  pricing  practice
which  was  also  intended  to  be  covered  by  the
the
undertakings.  Napier  Brown 
meetings  were  a  useful  way  of  emphasising  to
British  Sugar’s  senior  management  the  importance
of  its  monitoring  the  observance  by  its  sales  force,
not  only  of  the  letter,  but  also  of  the  spirit  of  the
undertakings. In Napier Brown’s view, the wording
of  the  undertakings  makes 
it  clear  that  the
insufficient  margin  between  British  Sugar’s  price
for  industrial  sugar  and  its  price  for  retail  sugar
was  merely  an  example  of  a  pricing  practice  that
was  not 
‘normal  and  reasonable’  and  which
therefore  might  be  ‘construed  as  predatory’.

customers  of 

thinks 

that 

2.3.4.  James  Budgett’s  arguments

Sugar’s  movement 

(133)  James Budgett, in its reply to the revised statement
of  objections (339),  claims  to  have  believed  that
British 
re-establish
volume-based  pricing  differentials (340)  was  part  of
British  Sugar’s  compliance  with  the  undertakings.
Budgett  believed  that  the  Commission  had  warned
British Sugar not to engage in predatory pricing in
respect  of  smaller  accounts  for  industrial  white
sugar in a manner which amounted to a breach of
Article  86  of  the  Treaty.

to 

2.3.5.  The  Commission’s  replies

regard 

(134)  At  the  meetings  the  parties  pursued  the  object  of
restricting  price  competition  between  all  four  of
them  with 
sugar,  and
additionally between British Sugar and Tate & Lyle
with regard to retail sugar. This can be asserted in
view of the fact that all the alternative justification
put  forward  by  the  parties  in  order  to  explain  the
purposes  of  meetings  are  not  convincing.

industrial 

to 

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(a)  T h e   u n d e r t a k i n g s

with  its  obligations,  James  Budgett  would  have
wanted  an 
indication  that  Tate & Lyle  would
behave  in  a  like  manner.

(135)  The  main 

on 

based 

explanation, 

the  undertakings, 

the
implementation  of 
is  not
convincing,  either  when  one  considers  those  who
actually participated in each of the 40 meetings, or
with  regard  to  the  chronology  of  events,  or  with
regard  to  the  subject  matter  of  the  individual
meetings,  or  yet  with  regard  to  the  alternative
methods  available  for  achieving  and  monitoring
the  implementation  of  the  undertakings.

(136)  It 

and 

in  meetings 
‘industrial/institutional 

is  established (341) 
that  British  Sugar  and
in  all  40  meetings,
Tate & Lyle  participated 
James  Budgett
whereas  Napier  Brown  and 
classified  as
participated  only 
‘industrial’ 
price
changes’.  Specifically  James  Budgett  and  Napier
Brown  participated  in  18  meetings  under  these
classifications.  There  was  one  further  industrial
sugar  meeting  in  which  only  British  Sugar  and
James
Tate & Lyle 
Budgett, 
and
Tate & Lyle,  attended  one  further  meeting  about
imports/exports.  The  remaining  20  meetings  were
bilateral  occasions  between  British  Sugar  and
Tate & Lyle,  variously  classified  as  ‘background
meeting’,  ‘general  market’,  ‘general/retail’,  ‘retail’,
‘general/imports’, and  ‘imports/exports’.

participated.  Moreover, 

together  with  British 

Sugar 

(137)  During  the  hearing  on  18  and  19  April  1996,  the
Commission asked the parties to provide a tenable
explanation  for  the  presence  of  the  manufacturer
Tate & Lyle at all the meetings. The reason behind
if  the  meetings  were
this  question  was  that 
designed by British Sugar to reassure the merchants
and  to  ensure  implementation  of  the  undertakings
which  British  Sugar  had  given  to  the  Commission
—  undertakings  which  only  concerned  merchants
but  not  manufacturers (342)  —  then  Tate & Lyle’s
continuous  presence  would  be  difficult  to  explain.
British Sugar replied (343) that there was a common
industry  interest  in  securing  the  presence  of  both
the  manufacturers  (British  Sugar  and  Tate & Lyle)
and  both  the  merchants  (Napier  Brown  and  James
Budgett),  and  that  the  merchants  probably  had  as
many 
their
relationship  with  Tate & Lyle  as  they  had  with
British  Sugar.  Napier  Brown  replied (344)  that
British  Sugar  was  at  the  time  seeking  to  reassure
the whole market, not just the merchants, and that
British  Sugar  wanted  to  have  an  open  forum
explaining  what  they  were  doing  and  giving
everybody,  including  Tate & Lyle,  the  opportunity
of  commenting.  James  Budgett  replied (345)  that
there  was 
explaining
simple 
Tate & Lyle’s  presence.  It  said  that  in  addition  to
any  assurance  that  British  Sugar  would  comply

fears  concerning 

future  of 

answer 

the 

no 

(138)  As  a  starting  point,  the  Commission  observes  that
the  more  it  is  argued  that  the  meetings  served  the
purpose  of  reassuring  all  four  parties,  the  less
it  becomes  that  the  meetings’  main
credible 
function  was 
the
undertakings to which Tate & Lyle was plainly not
a  party,  which  did  not  mention  Tate & Lyle,  and
which were given by British Sugar in the course of
Napier  Brown  proceedings,  in  which  proceedings
Tate & Lyle’s  conduct  was  not  at  issue.

implementation  of 

the 

(139)  Tate & Lyle 

the 

rely  on 

itself  does  not 

the
undertakings as an explanation for the meetings at
all. When questioned at the oral hearing on 18 and
19  April  1996  about  the  significance  of  the
undertakings,  it  referred  to  its  two  letters  of  16
July  1990 (346)  and  29  August  1990 (347)  to  the
OFT  as  a  proper  description  of  the  circumstances
the  meetings  arose.  Tate & Lyle
in  which 
added (348) 
letter  of  16  July  1990
that 
mentioned  ‘the  existence  of  the  undertakings  as
being  part  of  the  context  in  which  the  meetings
took  place’ (349).  In  fact,  the  letter  of  29  August
1990 does not mention the undertakings at all and
the one of 16 July 1990 mentions them only once,
and  then  only  as  a  minor  point.  The  relevant  part
of  this  letter (350)  reads:  ‘in  the  summer  of  1986
there  were  indications  that  British  Sugar  was
contemplating  a  change  in  its  commercial  policy
vis-à-vis  Tate & Lyle.  At  that  time  key  relevant
employees of British Sugar had left or were on the
point of leaving. British Sugar was also required to
give  undertakings  to  the  European  Commission  in
the  context  of  Napier  Brown  proceedings  and  it
was  facing  commercial  pressures.  It  was  indicated
to  Tate & Lyle  that  British  Sugar  was  prepared  to
adopt  new  commercial  policies’ (351).  This  extract
shows 
the  undertakings  were  only  a
subordinate  element  amongst  several  others  and
that  they  in  any  event  did  not  constitute  the
principal  motive  for  British  Sugar’s  decision  to
change  its  policy  vis-à-vis  Tate & Lyle.

that 

(140)  Moreover,  a  more  detailed  analysis 

further
the

on 

contradicts 
undertakings.

the 

arguments 

based 

(aa)  The  participants  in  the  meetings

(141)  Firstly,  it  is  not  credible  that  the  20  bilateral
meetings  between  British  Sugar  and  Tate & Lyle

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implementing 

the  purpose  of 

served 
the
undertakings,  while  at  the  same  time  excluding
Napier  Brown  and  James  Budgett  although  these
two companies in their capacity as merchants were
directly  concerned  by  the  undertakings.  Secondly,
besides  Napier  Brown  and  James  Budgett,  the
undertakings 
other
equally 
merchants  operating  on  the  market 
in  white
granulated  sugar  in  Great  Britain (352).  The  fact
that  they  did  not  take  part  in  any  of  the  40
meetings  is  further  indication  that  these  meetings
did  not  serve  the  purpose  of  implementing  the
undertakings.

concerned 

the 

(bb) The  chronology  of  events

in  that 

‘significant 

(142)  The  decisive  meeting  between  British  Sugar  and
Tate & Lyle,  at  which  Napier  Brown  and  James
Budgett  were  not  present,  took  place  on  20  June
1986,  whereas  the  undertakings  were  only  offered
on  5  August  1986.  In  its  letter  of  29  August
1990 (353), Tate & Lyle described the meeting of 20
June  1986  as 
it  set  the
background  principles  against  which  all  future
discussions  were  held’.  In  the  light  of  this,  it  is
clear,  first,  that  the  meeting  of  20  June  1986  with
regard  not  only  to  the  absence  of  Napier  Brown
and James Budgett but also on account of its date,
could  not  have  concerned  the  implementation  of
the  undertakings.  Secondly,  the  fact  that  the
meeting  of  20  June  1986,  which  was  crucial  in
setting the principles for the future anti-competitive
conduct  and  for  all  the  subsequent  meetings  —
that  is  to  say,  for  the  bilateral  and  for  the
quadripartite  meetings,  took  place  before  the
undertakings  were  offered,  is  a  strong  indication
that  the  subsequent  meetings  were  not  concerned
with  their  implementation.

(143)  Furthermore,  if  the  meetings  were  designed  to
implement  the  undertakings  given  on  5  August
1986  in  the  Napier  Brown  proceedings,  it  is  not
understandable  why  for  almost  the  two  years
which  elapsed  between  that  date  and  the  adoption
of  the  Commission  decision  in  that  case (354),
British Sugar never told the Commission that these
bilateral  and  quadripartite  meetings  between  the
parties  were  taking  place.  In  these  proceedings,
British Sugar endeavoured to create the impression
that it ensured compliance with its undertakings as
well  as  with  the  Community  competition  rules
generally, in two ways. Firstly, it drew up a general
Community 
compliance
programme  in  December  1986  and,  secondly,  it

competition 

rules 

it  cannot  be  explained  why 

took  specific  action  aimed  at  compliance  in  the
form  of  the  meetings  which  are  at  issue  in  these
proceedings.  In  its  Napier  Brown  Decision,  the
Commission  took  the  giving  of  the  undertakings
and  the  adoption  of  the  compliance  programme
into  account  as  mitigating  factors (355),  but  still
imposed  a  fine  of  ECU  3  million.  Against  this
backdrop, 
the
meetings,  the  alleged  prime  purpose  of  which  was
to  ensure  compliance  with  the  undertakings  and
the  Community  competition  rules  generally,  were
never  mentioned  by  British  Sugar 
the
Commission.  Following  British  Sugar’s  logic,  it
would  have  been  in  its  interest  to  demonstrate  to
the Commission that it took the implementation of
the undertakings and of its compliance programme
very  seriously,  and  it  could  have  introduced  this
fact as a further argument when trying to obtain a
reduction  of  the  fine  imposed.

to 

(cc)  The  subject  matter  of  the  meetings

in 

the  course  of 

(144)  It  should  be  recalled  that  the  undertakings  were
given 
the  Napier  Brown
procedure,  a  case  which  had  focused  on  the  retail
sugar business. Industrial sugar is the raw material
for  manufacturing  the  downstream  product,  retail
sugar.  The  Napier  Brown  Decision  found  that
British  Sugar  was  dominant  on  the  market  for  the
supply  of  both  industrial  and  retail  sugar  in  Great
Britain (356).  Consequently,  in  so  far  as  merchants
wish  to  engage  in  the  retail  sugar  business  on  the
basis  of  industrial  sugar  purchased  from  British
Sugar,  they  depend  on  British  Sugar’s  maintaining
a  sufficient  margin  in  its  pricing  (the  repackaging
margin)  between  industrial  and  retail  sugar.  The
major  element  of  Napier  Brown’s  complaint,  and
the Commission’s finding in the decision, were that
British  Sugar  had  artificially  reduced  its  prices  for
retail  sugar  to  the  extent  that  the  margin  between
its  prices  for  retail  sugar  and  industrial  sugar
became insufficient for Napier Brown to survive in
the  British  retail  sugar  market.  Consequently,  the
undertakings expressly refer to the margin between
British Sugar’s industrial and retail sugar prices on
which 
retail  business  vitally
depends (357).  The  undertakings  do  not  deal  with
the  general  level  of  prices  for  industrial  and  retail
sugar.  Nor  does  the  text  of  the  undertakings
specifically  mention  the  differentials  to  be  created
or  maintained  between  prices  to  purchasers  of
larger  quantities  of  industrial  sugar  and  those
purchasing  smaller  quantities  of  industrial  sugar.
This  is  due  to  the  fact  that  in  the  Napier  Brown
procedure  the  Commission  never  accused  British

the  merchants’ 

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Sugar of maintaining an abusive, or even an unfair,
margin  between  large  and  small  purchases  of
industrial sugar.

(145)  According  to  the  information  available  to  the
Commission,  Naper  Brown  and  James  Budgett
were  only  involved  in  discussions  with  British
Sugar  and  Tate & Lyle  regarding  industrial  sugar
in  particular  regarding  the  price
prices,  and 
differentials  to  be  created  and  maintained  between
customers  purchasing  larger  and  those  purchasing
smaller  quantities  of  industrial  sugar.  18  industrial
sugar  meetings  were  held  between  all  four  parties;
one  further  industrial  sugar  meeting  was  held  only
between  British  Sugar  and  Tate & Lyle.

Napier  Brown  and  James  Budgett  were  not
involved in the seven meetings classified ‘retail’ and
the  one  meeting  classified  ‘general/retail’;  those
were  bilateral  meetings  between  British  Sugar  and
Tate & Lyle.  Apart  from  the  first  bilateral  meeting
between British Sugar and Tate & Lyle on 20 June
1986,  there  was  no  meeting  covering  jointly  the
aspects  of  industrial  and  retail  sugar.  It  is  possible
that,  at  their  first  bilateral  meeting  on  20  June
1986  British  Sugar  and  Tate & Lyle  also  discussed
the aspect of margins between industrial and retail
sugar  prices,  although  the  reason  for  doing  so
could not have been the undertakings, because they
were  given  with  regard  to  the  merchants  in  the
course  of  the  Napier  Brown  procedure  in  which
Tate & Lyle  had  not  been  involved.  Moreover,  if
the  issue  of  margins  between  industrial  and  retail
sugar  prices  was  actually  discussed  at  the  meeting
of  20  June  1986,  and  if  the  parties’  explanations
about  the  role  of  the  undertakings  were  correct,  it
would  have  been  logical,  first  for  British  Sugar,
Napier Brown and James Budgett together to have
taken  part  in  that  first  meeting  of  20  June  1986,
and  secondly,  for  these  three  companies  to  have
continued  over  the  entire  course  of  the  relevant
period  to  participate  together  in  meetings  which
jointly  dealt  with  the  issues  of  both  industrial  and
retail  sugar  pricing.

Against  this  backdrop,  in  view  of  the  subject
matters  and  the  participants 
in  the  different
meetings,  the  Commission  concludes  that  —  apart
from possibly the first meeting on 20 June 1986 —
the  issue  of  margins  between  industrial  and  retail

sugar  prices  was  discussed  neither  at  the  meetings
about  industrial  sugar  nor  at  the  meetings  about
retail  sugar.  In  the  view  of  the  absence  of  Napier
Brown and James Budgett from the first meeting of
20  June  1986,  and  since  there  were  no  further
meetings  which  jointly  dealt  with  both  industrial
and  retail  sugar  and  which  thus  could  have
discussed  the  margins  issue,  which  was  specifically
addressed  in  the  Napier  Brown  Decision  and
expressly  mentioned  in  the  undertakings,  it  is  not
credible  that  any  of  the  meetings  served  the
implementation  of  these  undertakings.

(146)  Likewise,  if  the  undertakings  were  designed,  as
British  Sugar  claims,  to  reassure  the  merchants  of
their  future,  it  cannot  be  explained  why  Napier
Brown and James Budgett were present only at the
meetings  covering  industrial  sugar  but  not  at  the
meetings dealing with the retail sugar business. The
industrial  sugar  market  as  such  was  not  the  focus
of the Napier Brown procedure, nor did it in itself
involve  an  issue  specifically  mentioned  in  the
undertakings.  On  the  contrary,  the  retail  sugar
market  was  the  focus  of  the  Napier  Brown
procedure  and,  on  this  basis,  the  position  of  the
merchants on that market was a concern which the
undertakings  were  designed  to  address.

(147)  As  a  consequence,  therefore,  it  is  not  credible  that
the  meetings  in  which  Napier  Brown  and  James
Budgett  were  present  in  any  way  pursued  the
object  of  implementing  the  undertakings,  all  the
more  so  because  Tate & Lyle,  being  a  party  not
concerned  by  the  undertakings (358),  was  always
present.  It  is  likewise  not  credible  to  contend  that
British Sugar and Tate & Lyle, when they excluded
Napier  Brown  and  James  Budgett  and  held
bilateral retail sugar meetings, or indeed when they
held  any  other  of  their  bilateral  meetings,  in  any
implementing  the
way  pursued  the  object  of 
undertakings,  again  all  the  more  so  because
Tate & Lyle  —  as  explained  above  —  was  not  a
party  concerned  by  the  undertakings.  Accordingly,
in view of the actual subject matter of the meetings
and Tate & Lyle’s continuous participation therein,
British  Sugar’s  argument (359)  that  its  conduct  was
based on its understanding that in order to comply
with  the  undertakings  it  ‘was  obliged  to  consult
with  the  merchants  on  the  maintenance  of  an
acceptable differential between industrial and retail
prices,  and  also  on  acceptable  differentials  in  price
between  the  larger  and  smaller  customers’ (360)  is
not  accepted  by  the  Commission.

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(148)  The  Commission’s  view 

is  confirmed  by  the
answers  which  Napier  Brown  and  James  Budgett
gave  at  the  oral  hearing  on  18  and  19  April  1996
concerning  the  question  of  why  they  were  not  at
least also involved in discussions about the margin
between  retail  and  industrial  sugar  prices.  The
representative  of  Napier  Brown  said (361):  ‘We
certainly  did  discuss  it,  but  I  had  no  intention  of
discussing  that  with  the  other  parties  there.  It  was
a  private  matter  between  us  and  British
Sugar’ (362).  The  representative  of  James  Budgett
said (363):  ‘My  view,  and  I  would  endorse  what’s
been said by Pat Ridgwell, whatever these meetings
were about, the early ones, they weren’t specifically
about  the 
issue  of  the  retail  over  the  bulk
margin’ (364).

(dd) The 

significance 

of 

the 

compliance

programme

was  based  on  Article  86.  As  the  same  part  of  the
decision  indicates  —  and  reference  to  the  text  of
the compliance programme confirms this (366)  —  it
covers  the  whole  range  of  obligations  under
Articles  85(1)  and  86.  Detailed  explanations  and
practical examples are given for both Article 85(1)
and  Article  86.  Moreover, 
the  compliance
programme  states:  ‘In  line  with  its  policy  of
complying  with  all  applicable  laws  the  company  is
therefore  committed  to  compliance  with  the  EEC
competition rules and will take every step to ensure
observance  of  that  policy.  It  is  also  the  company’s
policy  not  only  to  observe  the  law  but  to  go
beyond  mere  compliance  with  the  strict  letter  of
the law and seek to avoid any conduct which may
give  rise  to  doubts  as  to  whether  or  not  is  has
acted 
. . .  Therefore  all  directors,
managers  and  other  employees  throughout  the
company  are  expected  to  follow  the  company’s
policy  and  comply  with  the  spirit  and  the  letter  of
the  EEC  competition  rules.  They  are  also  expected
to  instil  in  all  their  subordinates  a  sense  of
obligation and concern to comply in the same way.
No  member  of  staff,  at  whatever  level  has  the
authority  to  give  orders  or  to  take  any  action
which  contradicts  the  company’s  policy  as  set  out
above’ (367).

lawfully. 

law 

(149)  Moreover,  the  existence  and  the  content  of  the
Community 
compliance
competition 
programme,  which  British  Sugar  announced  to  the
Commission  in  October  1986  and  adopted  in
December  1986,  further  weakens  the  credibility  of
its  argument  that  its  conduct  was  based  on  its
understanding  that  in  order  to  comply  with  the
undertakings  it  ‘was  obliged  to  consult  with  the
merchants’ on pricing in any way. The compliance
programme  covers 
the
to
Community 
economic  operators.  It  does  not  neglect  Article
85(1)  and  it  sufficiently  indicates  the  risk  of
infringing  Article  85(1)  which  any  direct  contacts
between  competitors  about  pricing  questions
entail.

the  whole  range  of 
rules  applicable 

competition 

a 

comprehensive 

(150)  The  Commission’s  Napier  Brown  Decision  of  18
July  1988 (365)  reports:  ‘. . .  in  October  1986,  BS
informed  the  Commission  that  it  intended  to
implement 
compliance
programme  in  order  to  ensure  that  in  the  future
the  company  fulfilled  all  of  its  obligations  under
Article  85(1)  and  particularly  Article  86  of  the
Treaty.  This  programme  has  subsequently  been
adopted.  As  part  of  this  programme,  BS  holds  an
review  meeting
annual  anti-trust  compliance 
following  which  a  report  is  compiled,  a  copy  of
which  is  forwarded  to  the  Commission’.

(151)  Furthermore, 

is 

the  all-embracing  scope  of 
reflected  by 

the
the
compliance  programme 
information  which  British  Sugar  supplied  to  the
Commission  in  the  course  of  its  request  of  23
December 1986 for negative clearance for the same
compliance  programme  (Case  IV/32.214).  In  the
Annex  to  form  A/B  British  Sugar  stated  under  the
heading 
‘1.  Brief  description:  A  compliance
programme  to  be  enforced  by  British  Sugar  in
respect  of  the  supply,  pricing  and  marketing  of  its
products  having  regard  to  the  competition  rules
contained  in  the  Treaty  of  Rome’ (368).  Under
heading  ‘2.  Market’  it  is  said:  ‘The  relevant
product market for the purposes of this application
is  granulated  sugar  for  sale  to  retail  and  industrial
clients.  The  relevant  geographical  market  is  the
United  Kingdom’ (369).

(ee)  Alternative  methods  of 

achieving 
implementation  of 

and
the

monitoring 
undertakings

the 

The reason for the particular mentioning of Article
86  in  this  part  of  the  Napier  Brown  Decision  lies
solely in the fact that the Napier Brown procedure

(152)  Finally,  if  the  UK  and  the  British  white  granulated
sugar  markets,  as  well  as  British  Sugar’s  pricing
policy, were as transparent as all the parties claim,

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the  market.  Moreover, 

to  achieve  and  monitor 

it  is  hard  to  understand  why  any  meetings  at  all
were  necessary 
the
implementation of the undertakings. It would have
sufficed  for  Napier  Brown  and  James  Budgett
simply  to  monitor  British  Sugar’s  pricing  conduct
on 
the  undertakings
continue in force. The fact that since July 1990 no
further  meetings  between  the  parties  have  taken
place,  and  that  no  complaints  have  been  made  by
any  of  the  merchants,  demonstrates  that  it  is
possible  to  successfully  achieve  and  monitor  the
implementation  of 
the  undertakings  without
holding meetings.

C.  APPRECIABLE  EFFECT  ON  TRADE  BETWEEN
MEMBER STATES

1.  The  Commission’s  assessment

1.1.  The  wording  of  Article  85(1)  and  the
standards  set  by  the  Court

(b) T h e  

o t h e r  

e x p l a n a t i o n s  

f o r  

t h e

m e e t i n g s

(153)  The further argument that the complex commercial
relationships  between  the  parties  required  frequent
meetings between them, is not convincing. The fact
that  since  July  1990  no  such  meetings  have  taken
place,  while  the  commercial  relationships  between
the parties have remained as complex as they were
in  the  relevant  period,  shows  that  it  is  possible  to
manage  these  relationships  successfully  without
meetings.  Nor  is  it  credible  to  assert  that  the
relationships  with  other
parties’  commercial 
operators  on  the  white  granulated  sugar  market  in
Great Britain, especially other merchants, were less
complex than the relationships between the parties
themselves. The fact, therefore, that the parties did
not  involve  these  other  operators  in  their  meetings
is  further  indication  that  these  meetings  did  not
serve  the  purpose  claimed  by  the  parties.

(c)  C o n c l u s i o n

(154)  In view of the fact that the explanations offered by
the  parties  for  their  meetings  are  unconvincing,
and  that  no  meetings  have  proved  necessary  in
order to achieve the alleged objects of the meetings
after  the  relevant  period,  it  can  be  concluded  that
the true reason for the parties’ continuing to invest
time  and  ressources  in  the  organisation  of  and
attendance  at  meetings,  with  such  frequency  and
over  such  a  long  period,  lay  in  all  four  parties’
pursuit  of 
restricting  price
competition  between  them  by  coordinating  their
pricing  policy  on  the  industrial  sugar  market  in
Great  Britain,  and  additionally  British  Sugar  and
Tate & Lyle  by  coordinating 
respective
pricing policies on the retail sugar market in Great
Britain.

the  object  of 

their 

(155)  The 

and/or 

concerted 

agreement 

practice
concerning  the  coordination  of  the  parties’  pricing
policy may have appreciably affected trade between
Member  States.  This  can  be  stated  although  the
object  of  this  agreement  and/or  concerted  practice
concerned  the  pricing  policy  pursued  on  a  market,
not extending to the whole of the UK, but covering
Great  Britain  alone.  An  infringement  of  Article
85(1) does not presuppose that the object or effect
of the restriction of competition concerns a market
which  in  terms  of  geography  or  product  goes
beyond  the  borders  of  one  Member  State,  so  long
as  the  pattern  of  trade  between  Member  States
may  have  been  affected,  either  negatively  or
positively.

(156)  In  this  case,  it  is  not  possible  to  determine  the
precise  extent  to  which  imports  were  drawn  into
Great  Britain  as  a  result  of  the  agreement  and/or
concerted 
pricing
coordination.

concerning 

practice 

(157)  However, it is not necessary for the Commission to
make  such  a  determination.  First  the  wording  of
Article  85(1),  which  mentions  ‘agreements  . . .  and
concerted practices which may affect trade between
Member  States’,  demonstrates  that  proof  of  actual
effect  on  trade  is  not  necessary  in  order  for  the
provision to become operative. Secondly, the Court
of Justice has stated on a number of occasions (370)
that,  in  order  for  an  agreement  or  a  concerted
practice  to  affect  trade  between  Member  States,  it
need  only  make  it  possible  to  foresee  with  a
sufficient degree of probability on the basis of a set
of  objective  elements  of  law  or  of  fact  that  it  may
have  an  appreciable  influence,  direct  or  indirect,
actual or potential, on the pattern of trade between
Member States capable of hindering the attainment
of  the  objectives  of  a  single  market  between
Member  States.  The  influence  which  an  agreement
or a concerted practice may have on trade between
Member  States  is  to  be  determined  by  taking  into
account  in  particular  the  position  and  importance
of  the  parties  on  the  relevant  market (371).

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(158)  Moreover, 

that 

restrictive 

the  Treaty 

interpretation  which 

the  Court  has  stated  on  various
occasions (372) 
agreement
a 
extending  over  the  whole  territory  of  one  single
Member  State  by  its  very  nature  has  the  effect  of
reinforcing  the  compartmentalisation  of  markets
on  a  national  basis  thereby  holding  up  the
economic 
is
designed  to  bring  about.  In  the  Belasco  case (373),
which concerned a cartel in the roofing felt market
in  Belgium,  the  Court  of  Justice  pointed  out  that
the  members  of 
the  cartel  had  reached  an
understanding  about  the  defensive  measures  to  be
taken  in  the  event  of  increased  competition  from
foreign  undertakings,  and  that  the  share  of  the
domestic  market  in  question  which  the  cartel
members  held  allowed 
these
measures  effectively.  Therefore,  the  agreement
and/or  concerted  practice  had  to  be  considered
capable  of  influencing  intra-Community  trade.  In
the  John  Deere  case (374),  the  Court  of  First
Instance  pointed  to  the  highly  olipolistic  nature  of
the  relevant  domestic  market  (the  UK  agricultural
tractor  market)  and  the  fact  that  the  members  of
the  cartel  held  88 %  in  the  market.  The  Court
concluded  that,  under  these  circumstances,  the
the
Commission  had 
that 
correctly 
information  exchange  operating  between 
the
companies  concerned  was  liable  to  substantially
affect  trade  between  Member  States  because  the
lessening  of  competition  resulting 
this
exchange  necessarily  influenced  the  volume  of
imports  to  the  domestic  market  concerned.

to  apply 

found 

them 

from 

1.2.  The  assessment  of  this  case

(159)  Applied to this case, the standards set by the Court
lead  to  the  conclusion  that  the  agreement  and/or
concerted  practice  was  capable  of  appreciably
affecting  trade  between  Member  States.

(160)  The  agreement  and/or  concerted  practice  had  the
object of increasing in a coordinated way the prices
for  white  granulated  sugar 
in  Great  Britain.
Economically,  it  is  logical  to  expect  imports  of
white granulated sugar into Great Britain to rise in
response  to  increased  prices  in  Great  Britain,
notwithstanding  the  structural  limits  on  imports
resulting  from  the  factors  indicated  above (375).
From this point of view, therefore, it is possible to
conclude  with  a  sufficient  degree  of  probability
that  the  agreement  and/or  concerted  practice  may
have had an appreciable influence on the pattern of
trade  between  Member  States.

(161)  This  is,  moreover,  confirmed  by  the  structure  of
the relevant market and the parties’ strength on it.

fact 

that 

Ireland  and 

Both  the  industrial  and  the  retail  sugar  markets  in
Great Britain were tightly olipolistic in the relevant
period (376).  The  four  companies  involved  in  the
agreement  and/or  concerted  practice  concerning
industrial  sugar  together  held  over  90 %  of  the
relevant  market.  The  two  companies  involved  in
the agreement and/or concerted practice concerning
retail  sugar  held  approximately  89 %  of  the
relevant  market.  The 
the  relevant
geographical  market  does  not  cover  the  whole
territory  of  the  United  Kingdom,  but  excludes
Northern 
to  Great
Britain (377),  is  immaterial  with  regard  to  the
question  of  effect  on  trade  in  the  present  case.
Where  a  minor  part  of  a  Member  State’s  territory
is  separated  from  the  remaining  major  part  of  its
territory — as is the case with respect to Northern
Ireland’s  position  in  relation  to  Great  Britain  —
the  logic  concerning  compartmentalisation,  put
forward by the Court of Justice (378) with regard to
anti-competitive  conduct  covering 
the  whole
territory  of  one  single  Member  State,  also  applies
in  the  relation  between  that  remaining  major  part
of  a  Member  State’s  territory  and  the  other
Member  States,  unless  appreciable  effects  on  trade
can  be  fully  ruled  out.  This  is  the  situation  here.

limited 

is 

As a result, regard being had to the structure of the
relevant market and the parties’ strength on it, it is
possible  to  conclude  with  a  sufficient  degree  of
probability  that  the  agreement  and/or  concerted
practice  will  have  had  an  appreciable  influence  on
the  pattern  of  trade  between  Member  States.

(162)  Furthermore,  in  relation  to  industrial  sugar  and  to
retail  sugar,  there  are  additional  facts  in  evidence,
which  make 
it  possible  to  conclude  with  a
sufficient  degree  of  probability  that  the  agreement
and/or  concerted  practice  will  have  had  an
appreciable  influence  on  the  pattern  of  trade
between  Member  States.

1.2.1.  Industrial  sugar

(163)  As  far  as  industrial  sugar  is  concerned,  a  number
of  companies  in  Great  Britain  including  the  sugar
merchants  in  their  principal  merchanting  role,
purchase  sugars  from  Continental  producers  in
order to secure for themselves an alternative source
of  supply  in  the  event  of  production  difficulties  in
Great  Britain,  such  as  crop  failure.  They  will,  if
necessary,  be  willing  to  pay  a  price  premium  for
such  purchases.  Moreover,  major  Continental
sugar  producers  have  traditionally  sold  significant

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to 

the 

increases  owing 

quantities  of  industrial  sugar  in  Great  Britain.
Logically,  if  the  industrial  sugar  price  in  Great
Britain 
four  parties’
agreement  and/or  concerted  practice  concerning
coordinated  higher  pricing,  British  companies  will
find  alternative  sources  of  supply  located  in  other
Member  States  more  attractive.  Furthermore,  this
would  encourage  companies  from  other  Member
States to seek an increase of their exports to Great
Britain.

(164)  Indeed,  there  are  indications  that  the  agreement
and/or  concerted  practice  for  the  coordinated
increase  in  prices  for  industrial  sugar  in  Great
Britain  after  the  price  war  did  result 
in  an
appreciable  change  in  the  patterns  of  trade  in
industrial 
sugar  between  Great  Britain  and
neighbouring  Member  States,  in  particular  France
and  Denmark (379).

is  an 

(165)  First,  it  is  notable,  as  was  stated  earlier (380),  that
during  the  sugar  campaign  years  (1  October  to  30
September) covering the relevant period, imports of
sugar  from  other  Member  States  into  the  UK
increased  from  88 000  tonnes 
in  1986/87  to
110 000  tonnes  in  1987/88,  then  to  132 200
tonnes in 1988/89 and finally to 153 000 tonnes in
increase  of  73,9 %,
1989/90.  This 
representing  an  increase  of  the  imported  share  of
total national consumption from 3,9 % in 1986/87
to 6,7 %  in 1989/90. The import figure  in  the last
year  during  which  the  price  war  was  still  largely
ongoing,  namely  1985/86,  was  137 000  tonnes.  If
one compares this figure with the figure of the last
year  which  was  substantially  affected  by  the
agreement  and/or  concerted  practice,  1989/90,  an
increase of 11,7 % can be observed. The vast bulk
of  the  sugar  imported  in  the  UK  and  into  Great
Britain  has  traditionally  been,  and  was  during  the
relevant  period,  white  granulated  sugar,  most  of
which  was  destined  for  industrial  claims.

(166)  Secondly,  the  fact  that  Tate & Lyle,  in  particular,
felt  it  necessary  to  adopt  an  active  policy  of
threatening  importers  with  retaliatory  exports  if
they  sold  additional  quantities  of  sugar  into  Great
Britain,  as  was  described  earlier (381),  gives  a  clear
indication  that  the  parties  were  concerned  that  the
increased  pricing  level  in  Great  Britain  would  lead
to increased imports. The fact that the Commission

‘that 

stressed 

it  had 

in  its  revised  statement  of  objections  dropped  the
qualification  of  this  aspect  of  Tate & Lyle’s  and
British  Sugar’s  conduct  as  infringements  of  Article
85(1)  and  86  does  not  mean  that  this  conduct
cannot  be  taken  into  account  in  this  Decision.
Moreover,  in  its  written  reply  to  the  revised
statement  of  objections,  Tate & Lyle  again
acknowledged (382) 
to
importers  that  it  would  defend  its  sales  on  the  UK
market  and  that  on  occasion  it  had  unilaterally
threatened  retaliatory  action  (although  in  fact  it
took  no  action  despite  increases  in  imports)’ (383).
This 
the  Commission’s
confirms 
assessment  in  two  ways:  first,  it  admits  that
Tate & Lyle  did 
indeed  have  a  policy  of
threatening  importers.  Secondly,  it  demonstrates
that,  notwithstanding  this,  imports  into  Great
Britain 
logical
increased,  for  which  the  most 
explanation  is  that,  due  to  the  parties’  agreement
and/or  concerted  practice,  market  prices  in  Great
Britain  had  increased.

statement 

1.2.2.  Retail sugar

(167)  Although 

imports  of  white  granulated  sugar
packaged  in  one-kilogram  bags  for  retail  sale  are
not a historic feature of the sugar market in Great
Britain,  such  imports  are  by  no  means  impossible.
Even  though  there  are  significant  barriers  to  the
entry  of  such  products  (notably  the  need  to  print
specific  English-language  bags  or  labels,  consumer
loyalty  to  known  brands,  and  the  unwillingness  of
supermarkets  to  rely  on  suppliers  in  respect  of
whom they have no guarantee as to their ability to
ensure  regular  and  adequate  supplies),  when  retail
prices 
imports
increasingly  become  a  real  threat  to  the  domestic
producers.  In  particular,  the  major  supermarket
chains  have  strong  buying  power  and  are  perfectly
capable  of 
labels  using
launching  own-brand 
imported  supplies.

in  Great  Britain 

such 

rise, 

(168)  Furthermore, it is perfectly possible for companies,
such as sugar merchants or major supermarkets for
example,  to  purchase  industrial  sugar  in  other
Member States, import it and then repackage it for
retail  sale,  as  was  done  by  Napier  Brown  up  to
1988.  When  prices  for  retail  sugar  rise  in  Great
repackaging  operations  become
Britain, 
commercially  more  attractive.  The  domestic
producers  have  little  interest  in  selling  industrial
sugar  to  a  customer  wishing  to  repackage  it  and
entry
sell 

retail 

such 

sale. 

The 

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it 

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onto  the  market  of  a  new  repackager,  or  the
expansion of an existing repackager, will inevitably
put the margin between retail and industrial prices
under  pressure.  Thus,  even 
if  some  domestic
producers  are  willing  to  sell  for  this  purpose,  it  is
foreseeable that any company intending to set up a
repackaging  operation  will  wish  to  source  at  least
some,  if  not  most  or  all,  of  its  industrial  sugar
requirements  from  producers  in  other  Member
States,  in  particular  in  times  when  prices  of
industrial  sugar  on  the  British  market  are  rising.

2.  The  arguments  of  the  parties

2.1.  British  Sugar

the  price  war.  Therefore, 

(169)  British  Sugar  emphasises  that  there  was  no  actual
effect  on  trade  and  that  the  limited  increase  in
imports  had  nothing  to  do  with  changes  in  the
relative  sugar  prices.  It  states (384)  that  for  the
quantification  of  import  increases  the  Commission
should  have  adopted  a  base  year  in  which  prices
and imports into the UK were affected by the price
war  and  not  a  year  which  would  not  have  been
affected  by 
the
appropriate  base  year  would  be  1985/86  and  not
1986/87. In comparison with the year 1989/90, the
last  year  which  could  have  been  affected  by  the
alleged  pricing  concertation,  this  would  lead  to  an
import  increase  figure  of  only  12 %,  rather  than
74 %.  For  the  increase  —  which  it  admits  —
British  Sugar  offers  two  main  explanations (385):
first,  it  says  that  from  a  long-term  perspective,  the
increase  observed  after  1986  was  no  more  than  a
return toward previous levels of imports. Secondly,
British  Sugar  claims  that  an  element  of  the  import
increase was simply a reflection of increasing gains
from 
the  green  pound  was
speculation  as 
progressively devalued.

it  was  attractive 

(171)  Finally,  British  Sugar  recalls  that,  as  the  price
leader  during  the  relevant  period,  it  always  set  its
prices as close as possible to the minimum price at
which 
for  other  European
producers  to  begin  to  export  sugar  from  the
Continent 
in  quantities  which  would  threaten
British Sugar’s ability to sell its entire quota in the
UK (387).  On  this  basis,  British  Sugar  argues (388)
that 
in
is  strenuously
anti-competitive  conduct,  which 
denied,  it  did  so  in  a  manner  which  was  carefully
limited  by  the  objective  never  to  encourage
imports.  Thus 
the  alleged  “agreement”  was
incapable  of  affecting  trade  between  Member
States’ (389).

if  British  Sugar  had  engaged 

‘even 

2.2.  Tate & Lyle

the  attractiveness  of 

(172)  Tate & Lyle  acknowledges  that  rising  UK  sugar
prices  enhance 
imports.
Tate & Lyle  claims,  however,  that  the  UK  price
rises in the relevant period could not reasonably be
attributed  to  the  parties’  arrangements.  Rather,
they  were  the  consequence  of  British  Sugar’s
unilateral  decision  to  end  the  price  war (390).

2.3.  Napier  Brown

that 

explained 

(173)  Napier  Brown  states  that  there  is  no  evidence  that
the  increase  in  sugar  prices  in  the  UK  over  the
relevant  period  had  any  impact  at  all  on  the  level
of  imports (391).  At  the  oral  hearing (392),  Napier
Brown 
‘the  main  area  of
competition is the cost of importing sugar from the
Continent  plus  the  freight’ (393).  Napier  Brown
confirmed  that,  over  the  period  from  1986  to
1990,  it  increased  its  imports  of  white  sugar  into
the  UK (394),  that  it  made  imports  for  strategic
reasons,  such  as  establishing  a  third  independent
source  of  supply,  and  that  it  used  its  imports  as
leverage  in  its  purchase  negotiations  with  British
Sugar  and  Tate & Lyle (395).

(170)  With  regard  to  retail  sugar (386),  British  Sugar
describes  the  Commission’s  finding  as  to  the  effect
on  trade  as  pure  speculation.  It  points  out  that,
over  the  relevant  period,  the  retail  sugar  price
increases  attributable  to  decisions  by  British  Sugar
amounted to a trivial total figure, 6,8 % , of which
the  most  important  part  was  accounted  for  by
adjustments  which  were
institutional  price 
invariably  contractually  passed  on  to  retail  buyers.
Moreover,  British  Sugar  claims  that,  during  the
relevant period, only 350 tonnes were imported by
one  retailer  in  1989/90.

2.4.  James  Budgett

(174)  James  Budgett  stresses  that  price  levels  in  Great
Britain were set by British Sugar, which it describes
as  ‘the  dominant  supplier’.  According  to  James
Budgett,  prices  were  not  affected  by  the  industrial
sugar  meetings  in  which  James  Budgett  took  part,
and  consequently  that  those  meetings  had  no
actual  or  potential  effect  on  imports (396).

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(175)  James  Budgett  also  states  that,  in  the  calendar
years  from  1986  to  1990  inclusive,  it  trebled  its
imports of sugar into the UK although this did not
provide  short-term  profit  opportunities.  According
to  James  Budgett,  it  imported  mainly  for  strategic
reasons,  in  particular  to  satisfy  customer  demand
for  alternative  sourcing  and  to  obtain  leverage  in
its 
and
Tate & Lyle (397).

negotiations  with  British 

Sugar 

into 

in  dissuading  other  Community  producers  from
exporting 
the  UK  and  Great  Britain.
Moreover,  during  the  oral  hearing  which  followed
the  revised  statement  of  objections,  British  Sugar
presented  a  calculation  according  to  which  sugar
price  increases  during  the  relevant  period  —  after
deduction  of  institutional  price  changes  and  green
pound adjustments — left a profit margin, albeit a
small  one,  for  operators  wishing  to  import  sugar
into  Great  Britain (401).

3.  The  Commission’s  replies

(178)  British Sugar’s further arguments in relation to the
import  statistics  which  the  Commission  mentions
are  not  convincing  either.

(176)  In the first place it has to be stated that the parties’
arguments  concentrate  on  the  question  of  actual
effect on trade between Member States and do not
adequately  take 
into  account  the  wording  of
Article  85(1),  as  well  as  the  standards  set  by  the
Court  for  assessing  whether  an  agreement  and/or
concerted  practice  may  affect  inter-State  trade.
Therefore,  the  Commission  primarily  reiterates
it  has  said  above (398)  concerning  these
what 
standards  and  the  appraisal  of  this  case.  In
particular,  it  has  to  be  stressed  that  the  fact  that,
with  regard  to  the  restriction  of  competition,  the
Commission  relies  on  the  object  of  the  conduct
does  not  preclude  it  —  for  the  question  of  effect
on  trade  —  from  relying  on  the  potential  effect.
Such  a  conclusion  is  clearly  compatible  with  the
wording  of  Article  85(1).

(177)  British  Sugar’s  conclusion  that,  in  this  case,  under
no  circumstances  can  even  a  potential  effect  on
trade  be  foreseen  with  a  sufficient  degree  of
probability,  has  to  be  rejected.  In  particular,  the
argument  that  British  Sugar’s  policy  of  setting
prices below a certain level ruled out the possibility
of  any  effect  on  trade  is  not  convincing.

(179)  Firstly,  it  has  to  be  pointed  out  that,  apart  from
pointing  to  import  figures,  the  Commission  has
already (402)  provided  sufficient  other  elements  of
fact  and  law  which  make  it  possible  to  conclude
with  a  sufficient  degree  of  probability  that  the
agreement and/or concerted practice may have had
an  appreciable  influence  on  the  pattern  of  trade
between  Member  States.

(180)  Secondly,  it  is  uncontested  that  the  quantity  of
imports increased during the relevant period. While
there  is  a  disagreement  as  to  the  correct  reference
year,  the  annual  figures  are  uncontested.  but  even
if  British  Sugar’s  view  as  to  the  correct  reference
year was correct, the fact remains that there was a
substantial  increase  during  the  relevant  period  and
that  in  the  last  year  which  was  substantially
the  agreement  and/or  concerted
affected  by 
practice,  namely  1989/90,  imports  reached  a  peak
of  153 000  tonnes,  which  was  followed  —  after
the  termination  of  the  anti-competitive  conduct  —
by  a  slide  over  the  following  years  to  108 000
tonnes  in  1993/94 (403).

to 

the 

reply 

revised 

is  British  Sugar’s 

Nor 
line  of  argumentation
consistent.  It  says  in  its  written  reply  to  the  initial
statement  of  objections (399),  and  reiterates  in  its
written 
statement  of
objections (400),  that  during  the  relevant  period  it
set  prices  at  a  level  designed  to  avoid  imports  in
quantities  which  would  threaten  its  own  ability  to
sell  its  entire  sugar  quota  in  the  UK.  However,
such  a  pricing  policy  does  not  prove  that  imports
were  not  already  profitable  for  other  Community
producers  or  for  merchants,  while  taking  place  in
quantities  that  threatened  only  other  undertakings’
ability, and especially Tate & Lyle’s ability, but not
British Sugar’s, to maintain their respective market
shares  in  the  UK  and  in  Great  Britain.  This
explains  why  Tate & Lyle  was  particularly  active

(181)  Thirdly,  there  is  disagreement  about  what  caused
the increase in imports. The Commission concludes
that  the  most  likely  cause  for  the  import  increase
was  the  increase  of  market  prices  in  Great  Britain
engendered  by  the  agreement  and/or  concerted
practice.  Alternative  explanations  offered  by  the
parties  are  not  convincing.  In  particular,  it  does
not  suffice  to  state  that  the  import  increase  after
1986  was  only  a  return  toward  previous  levels  of
increase
imports. 
involved  a  return  to  previous  levels,  there  must
nevertheless  have  been  an  underlying  reason  for
this  increase.  After  imports  had  fallen  during  the
price  war  from  1984  to  1986,  the  most  plausible

Irrespective  of  whether 

the 

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explanation  for  the  subsequent  increase  is  that  it
was  the  consequence  of  the  parties’  coordinated
strategy of higher pricing which followed that price
war,  all  the  more  so  since  after  the  termination  of
import  quantities
the  anti-competitive  conduct 
decreased  substantially.  In  so  far  as  Tate & Lyle,
Napier  Brown  and  James  Budgett  deny  their
responsibility  by  pointing  to  British  Sugar’s  price
leadership,  the  Commission  refers  to  what  is  has
already said (404).

consequence  of 

(182)  As  to  retail  sugar  in  particular,  the  Commission
position 
speculative  nor
is  neither  purely 
inconsistent  with  its  previously  expressed  views.
On the basis of the standards set by the Court, the
issue  is  whether  the  scenario  already  described  by
the  Commission (405)  is,  with  a  sufficient  degree  of
probability,  a  possible 
the
anti-competitive  conduct.  The  most  prominent
instance  in  which  the  Court  of  Justice  dismissed
any possibility of an effect on trade is the Hugin v.
Commission  case (406)  concerning  the  application
of  Article  86.  In  that  case,  the  Court  made  a
detailed analysis of the sector in question and came
to  the  conclusion  that,  owing  to  economic  and
technical  factors  peculiar  to  this  sector,  an  effect
on 
ruled  out  under  all
circumstances.  The  activities  of  the  company  in
question  had  never  extended  beyond  one  single
Member State, trade between Member States in the
relevant  product  had  never  existed,  and  for
technical reasons could be ruled out even if market
conditions had been entirely free and not subject to
restrictive practices.

could  be 

trade 

(183)  In  this  case  the  circumstances  are  quite  different.
Firstly,  it  is  true  that  there  are  barriers  to  entry
which make trade in packaged retail sugar between
Great  Britain  and  other  Member  States  more
difficult.  However,  there  is  obviously  no  logical
reason  which  would  prevent  such  trade  from  ever
taking  place.  Secondly,  as  far  as  the  import  of
industrial  sugar  and  the  subsequent  repackaging
for  retail  sale  is  concerned,  the  fact  that  Napier
Brown did exactly this until 1998 shows that it is a
realistic  possibility.  Thirdly,  the  elements  with
which  the  Commission  has  put  together  the
particular
scenario 
supermarkets’  tendency  to  exercise  their  strong
buying  power  and  retail  sugar  traders’  wish  to
diversify  their  sources  of  supply,  are  firmly  based
in  fact.

described 

above, 

in 

D.  ARTICLE  85(3)

(184)  The  agreement  and/or  concerted  practice  outlined
above  has  not  been  notified.  By  virtue  of  Article
4(1) of Regulation No 17, therefore, on procedural
grounds  alone  no  exemption  can  be  granted.
Furthermore,  even  were  it  to  have  been  notified,
the Commission considers, on the basis of the facts
currently  available  to  it,  there  for  reasons  of
substantive  law  no  exemption  could  in  any  event
be,  or  have  been,  granted.  In  particular,  the
Commission  is  not  aware  of  any  elements  that
could  lead  to  the  conclusion  that  the  agreement
and/or  concerted  practice  contributed 
the
improvement  of  the  production  or  distribution  of
goods  or  to  the  promotion  of  technical  or
economic  progress,  nor  has  it  any  grounds  for
believing that any of the other three conditions for
the  granting  of  an  individual  exemption  are  met.

to 

IV.  INAPPLICABILITY  OF  REGULATION  No  26

in 

of 

and 

from 

trade 

for  derogation 

(185)  Article  2(1)  of  Council  Regulation  No  26  of  4
April 1962 applying certain rules of competition to
production 
agricultural
products (407),  as  amended  by  Regulation  No
49 (408),  provides 
the
application  of  Article  85(1)  Treaty  of  certain
agreements,  decisions  and  concerted  practices  in
the  agricultural  sector.  For  Article  2(1)  of
Regulation  No  26  to  apply,  the  agreement,
decision  or  concerted  practice  must  relate  to  a
product  listed  in  Annex  II  to  the  Treaty.  Sugar  is
such  a  product.  However,  this  does  not  mean  that
the  agreement  and/or  concerted  practice  to  which
this  Decision 
the
application  of  Article  85(1).  None  of  the  criteria
for  the  application  of  any  of  the  three  alternative
grounds  for  derogation  set  out  in  Article  2(1)  of
Regulation  No  26  are  met.  This  is  all  the  more
true  since  the  Court  has  stated  that  Article  2  of
Regulation  No  26,  as  it  provides  for  derogation
from the general rule laid down in Article 85(1) of
the  Treaty,  must  be  interpreted  strictly (409).

is  excluded 

refers 

from 

(186)  Turning 

to 

the 

first  ground 

for  derogation
provided  for  in  Article  2(1)  of  Regulation  No  26
(referring  to  agreements,  decisions  or  concerted
practices which ‘form an integral part of a national
market  organisation’),  it  is  sufficient  to  point  out
that  long  before  the  relevant  agreement  and/or
concerted  practice  started  in  1986,  provision  was
made,  beginning  with  Council  Regulation  (EEC)
No  1009/67,  for  the  termination  of  national  sugar

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for  sugar.  That 

market  regimes  by  the  establishment  within  the
Community  of  a  common  organisation  of  the
market 
first  regulation  was
superseded  successively  by  Regulation  (EEC)  No
3330/74  and  (EEC)  No  1111/77;  the  Council
Regulation  presently  in  force  is  Regulation  (EEC)
No  1785/81 (410),  as  last  amended  by  Regulation
(EC)  No  1148/98 (411).  Given  that  the  national
sugar market regimes had been terminated and the
sugar  market
common  organisation  of 
established  when  the  agreement  and/or  concerted
practice  being  the  subject  to  this  procedure  took
place,  that  agreement  and/or  concerted  practice
cannot logically be considered as having formed an
integral  part  of  a  national  market  organisation.

the 

(187)  The  second  ground  for  derogation  provided  for  in
Article  2(1)  of  Regulation  No  26  (referring  to
agreements,  decisions  or  concerted  practices  which
are  ‘necessary  for  attainment  of  the  objectives  set
out in Article 39 of the Treaty’) only applies if the
application  of  Article  85(1)  of  the  Treaty  were  to
jeopardise  the  attainment  of  all  five (412)  objectives
laid  down  in  that  Article  39.  This  is  not  the  case
here.

include 

For  the  sugar  sector,  the  means  of  attaining  the
objectives  of  the  common  agricultural  policy  are
laid down in Regulation (EEC) No 1785/81 and its
implementing  Regulations.  They 
the
creation of national production quotas, quaranteed
prices,  levies  and  refunds,  coupled  with  a  system
the  effect  of  exchange  rate
for  eliminating 
fluctuation  on  the  free  movement  of  the  product
between  Member  States.  The  coordination  of
pricing  policy  as  described  in  this  Decision  is
inconsistent with this system. These are, moreover,
measures  which  are  likely  to  affect  trade  and
influence  prices  to  the  detriment  of  consumers.
These  restriction  of  competition  cannot  therefore
be said to be necessary for the attainment of any of
the  objectives  set  out  in  Article  39  of  the  Treaty.

(188)  Finally,  the  conditions  of  the  third  ground  for
derogation  (as  set  out  in  the  second  sentence  of
Article 2(1) of Regulation No 26) are similarly not
fulfilled,  This  is  because  none  of  the  four  parties
subject  to  this  Decision  can  be  identified  as  a
farmer,  farmers’  association  or  association  of  such
associations  within 
that
provision (413).

the  meaning  of 

V.  ARTICLE  3  OF  REGULATION  No  17

(189)  The  agreement  and/or  concerted  practice  set  out
above  was  formally  terminated  by  Tate & Lyle  on
2 July 1990 when the chairman and chief executive
of the company ordered an end to all contacts with
competitors  of  the  kind  which  are  the  subject  of
this  procedure (414).  This  was  confirmed 
in
Tate & Lyle’s letter of 16 July 1990 to the OFT, a
copy  of  which  was  sent  to  the  member  of  the
in  charge  of  competition.  The
Commission 
Commission  does  not  have  evidence  that  any  of
the  four  parties  has  continued  the  anti-competitive
conduct  beyond  2  July  1990.

VI.  ARTICLE  15(2)  OF  REGULATION  No  17

(190)  Under  Article  15(2)  of  Regulation  No  17  the
Commission  may  by  decision 
impose  on
undertakings  fines  ranging  from  ECU  1 000  to
ECU  1  million,  or  a  sum  in  excess  thereof  but  not
exceeding  10 %  of  the  global  turnover  in  the
preceding business year of each of the undertakings
participating  in  the  infringement,  where  either
intentionally  or  negligently  they  infringe  Article
85(1)  of  the  Treaty.  In  fixing  the  amount  of  the
fine,  regard  is  to  be  had  to  both  the  gravity  and
the  duration  of  the  infringement.

A.  INTENTION

(191)  The  Court  of  Justice  has  consistently  held  that  in
order for an infringement to be regarded as having
been  committed  intentionally,  it  is  not  necessary
for  the  companies  in  question  to  have  known  that
they  infringed  Article  85  or  to  have  been  aware
that  they  were  transgressing  the  prohibition  laid
down  by  that  provision.  It  is  sufficient  that  they
could  not  have  been  unaware  that  the  conduct
concerned  had  the  object  or  effect  of  restricting
competition in the Common Market with actual or
trade  between  Member
potential  effect  on 
States (415).

direct 

(192)  The  Commission  considers  that,  owing  to  the  fact
competitors
that 
concerning  pricing  questions  are 
invariably
considered  dubious  from  the  point  of  view  of
competition law, and on account of the seriousness

contacts 

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that 

as  well  as  the  systematic  and  repetitive  nature  of
the  anti-competitive  practice  which  took  place  in
this  case,  none  of  the  companies  concerned  could
have  been  unaware  that  their  conduct  had  the
object  of  restricting  competition  in  the  common
market.  Similarly,  the  companies  concerned  could
not  have  been  unaware 
their  conduct
potentially  affected  trade  between  Member  States.
Moreover,  in  the  case  of  British  Sugar,  all  these
findings  are  reinforced  by  the  fact  that  in  1986  it
had 
introduced  a  comprehensive  Community
competition  law  compliance  programme,  which
described  the  prohibition  laid  down  in  Article  85
in detail. To sum up, an objective evaluation of the
concrete factual circumstances of this case leads to
the  conclusion  that  all  four  companies  concerned
committed  the  infringement  intentionally.

B.  GRAVITY  OF  THE  INFRINGEMENT

(193)  In  this  case  the  characteristics  of  the  infringement

were  as  follows.

of 

object 

competition 

The  agreement  and/or  concerted  practice  pursued
the 
by
restricting 
coordinating pricing policy on the horizontal level.
The  cartel  operated  in  relation  to  a  market  which
was  highly  concentrated.  The  participant  in  the
infringement  accounted,  in  the  industrial  sugar
section,  for  over  90 %  and,  in  the  retail  sugar
section,  for  approximately  89 %  of  the  relevant
market (416).

(196)  The  participation  of  British  Sugar,  on  account  of
its  share  of  the  relevant  markets  for  industrial  and
retail  sugar  and  due  to  its  position  as  price  leader,
was  essential  to  the  operation  of  the  cartel.

For  these  reasons,  in  calculating  the  fine  to  be
imposed  on  British  Sugar, 
the  Commission
considers  it  appropriate  to  fix  an  amount  of  ECU
18  million  with  regard  to  the  gravity  of  the
infringement.

(197)  Tate & Lyle, on account of its share of the relevant
markets  for  industrial  and  retail  sugar,  was  the
second  most  important  member  of  the  cartel.

For  these  reasons,  in  calculating  the  fine  to  be
imposed  on  Tate & Lyle, 
the  Commission
considers  it  appropriate  to  fix  an  amount  of  ECU
10  million  with  regard  to  the  gravity  of  the
infringement.

later,  and 
in 

(198)  The  merchants  Napier  Brown  and  James  Budgett
did  not  participate  in  the  key  meeting  of  20  June
1986,  at  which  the  principles  for  the  future
anti-competitive  conduct  were  set.  Napier  Brown
and  James  Budgett  joined  the  cartel  only  several
then  onwards  only
months 
from 
participated 
concerning
industrial  sugar.  Moreover,  owing  to  the  fact  that
Napier  Brown  and  James  Budgett  were  dependent
on supplies from the two domestic sugar producers
(British  Sugar  and  Tate & Lyle)  for  a  significant
part of the sugar which they sold in their capacities
as  principal  or  as  nominal  merchants (417),  their
influence  on  the  relevant  market  and  their  scope
for  exercising  power  on  that  market  was  limited.

infringement 

the 

However,  while  the  collusion  consisted 
in  a
collaborative strategy of higher pricing, there is not
sufficient evidence to state that minimum prices, or
prices  to  be  charged  to  specific  customers,  were
jointly fixed. Moreover, although it is by no means
out  of  the  question  that  an  actual  restrictive  effect
on  competition  and  an  actual  effect  on  trade
between  Member  States  resulted  from  the  parties’
behaviour,  the  Commission  does  not  rely  on  the
demonstration  of  such  effects.  Furthermore,  the
geographic  scope  of  the  relevant  market  was
confined  to  Great  Britain.

(194)  Against  this  backdrop,  the  Commission  concludes
that  the  agreement  and/or  concerted  practice  at
issue 
in  this  proceeding  constituted  a  serious
infringement  of  the  Community  competition  rules.

(195)  As to the individual contributions of the parties to
considerable  differentiation

infringement, 

this 
needs  to  be  made:

For  these  reasons,  in  calculating  the  fines  to  be
imposed  on  Napier  Brown  and  James  Budgett,  the
Commission  considers  it  appropriate  to  fix  an
amount  of  ECU  1,5  million  for  each  of  the  two
companies  with  regard  to  the  gravity  of  the
infringement.

C.  DURATION  OF  THE  INFRINGEMENT

(199)  With respect to British Sugar and Tate & Lyle, the
infringement concerning industrial sugar as well as
retail  sugar  lasted  from  20  June  1986,  when  the
first  meeting  was  held  between  those  companies,
until 2 July 1990 when Tate & Lyle terminated the
agreement  and/or  concerted  practice  in  question.
With  respect  to  Napier  Brown  and  James  Budgett,
the  infringement  regarding  industrial  sugar  lasted
from  late  1986  until  2  July  1990  when  the
agreement  and/or  concerted  practice  in  question
was  terminated (418).

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(200)  In  terms  of  the  Commission’s  fining  policy,  the
infringement in this case is considered to have been
of  medium  duration.

(201)  The  amount  imposed  to  take  account  of  the
gravity  of  the  infringement  should  therefore  be
increased by ECU 7,2 million in the case of British
the  case  of
Sugar,  by  ECU  4  million 
Tate & Lyle,  by  ECU  0,5  million  in  the  case  of
Napier  Brown  and  by  ECU  0,5  million  in  the  case
of  James  Budgett.

in 

(202)  The  basic  amounts  are  therefore  set  at  ECU  25,2
million  for  British  Sugar,  at  ECU  14  million  for
Tate & Lyle,  at  ECU  2  million  for  Napier  Brown
and  at  ECU  2  million  for  James  Budgett.

D.  AGGRAVATING  AND  ATTENUATING
FACTORS

1.  The  common  organisation  of  the  sugar
market

increase 

(203)  No  mitigation  stems  from  the  fact  that,  owing  to
the  common  organisation  of  the  sugar  market,  the
scope for competition on this market is in practice
to  a  certain  extent  restricted  as  a  consequence  of
regulatory  intervention,  as  was  pointed  out  by  the
Court  in  its  Suiker  Unie  judgment (419).  In  its
analysis  of  the  scope  for  competition  in  the  sugar
market, the Court observed that the common sugar
organisation  in  particular  provided  for  a  price
support  system,  the  collection  of  an  import  levy,
the  grant  of  export  refunds  and  the  fixing  of
national  production  quotas.  The  Court  stated  that
the  system  of  national  quotas  prevented  the  free
allocation  of  production,  as  well  as  any  large
in  production,  and  that  this
overall 
restriction, 
the  relatively  high
transport  costs,  affected  one  of  the  essential
elements  in  competition,  namely  the  supply,  which
consequently  affected  the  volume  and  pattern  of
trade  between  Member  States (420).  However,  the
Court 
these
restrictions, 
field  of
competition was left and that this field was subject
to  the  Community  competition  rules (421).  In  this
connection,  the  Court  expressly  mentioned  price
competition  because 
the
Community  system  were  not  sales  prices  for
dealers,  users  and  consumers,  and  consequently
allowed  producers  some  freedom  to  determine
their  sales  prices.  The  Court  also  pointed  to
evidence  of  tough  negotiations  taking  place  in
relation  to  sales  prices (422).

that,  notwithstanding 

in  practice  a 

together  with 

the  prices 

residual 

stressed 

set  by 

(204)  In  its  assessment  of  the  level  of  fines  imposed  by
the  Commission  decision (423),  the  Court  stated
that  the  Commission  had  not  sufficiently  taken
into  account  the  limitations  on  the  scope  of
competition caused by the common organisation of
the sugar market, and the Court further stated that
this  organisation  helped  to  ensure  that  sugar
producers continued to behave in an uncompetitive
manner.  However, 
the
possibility  for  reduction  of  fines  imposed  for  such
uncompetitive  behaviour  to  practices  engendered
by 
existing
anti-competitive  features  of  that  system,  such  as
the  partitioning  and  protection  of  national  or
regional  markets  by  controlling  supplies  coming
from  other  Member  States  as  well  as  the  other
forms of import and export restrictions which were
at  issue  in  that  case (424).

the  Court  confined 

and  worsening 

already 

the 

improper 

result  of 

suffered  as  a 

Moreover, 
to  expressly
the  Court  went  on 
underline  that  the  damage  which  users  and
consumers 
these
anti-competitive  practices  was  limited,  in  view  of
the  fact  that  the  parties  had  not  engaged  in  any
in  their  sales
concerted  or 
prices (425).  Therefore,  any  extension  of 
the
possibilities for mitigation, such as to cover pricing
collusion,  cannot  be  defended  under  the  principles
expounded in the Suiker Unie judgment. The strict
interpretation  of  the  possibilities  for  mitigation
allowed  by  the  Suiker  Unie  judgment  also  follows
from  the  fundamental  rule  that  exceptions  to
general  rules  have  to  be  construed  narrowly (426).

increase 

(205)  In contrast to the Suiker Unie case, the present case
is  about  behaviour  which  had  the  object  of
restricting price competition in the relevant market
by  means  of  pricing  coordination.  The  agreement
and/or  concerted  practice  pursuing  this  object  was
not engendered or facilitated by the common sugar
market  organisation,  nor  can  it  be  said  to  have
merely  aggravated  the  inherently  anti-competitive
features  of  that  system.  Pricing  coordination  is  a
practice  alien  to  that  system.  It  is  collusive  and
anti-competitive  conduct  concerning  sales  prices
applied to dealers, users and consumers. Such sales
prices 
important
competition  parameter  which 
the  Court  has
expressly mentioned as forming part of the residual
field of competition remaining in the sugar market
which 
the  Community  competition  rules  are
designed  to  protect.  Moreover,  with  particular
regard to the market for white granulated sugar in

particularly 

constitute 

a 

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L  76/53

Great  Britain,  it  has  been  shown (427)  that  the
Community  sugar  market  organisation  always  left
ample  scope  for  such  price  competition,  as  is
evidenced  not  only  by  the  occurrence  of  the  price
war  itself,  but  also  by  the  conditions  prevailing
after  the  ending  of  that  price  war.

2.  British  Sugar

competition  rules  by  British  Sugar  occurred  on  the
same  relevant  market,  both  as  regards  the  product
and  as  to  the  geographical  extent  of  the  market,
namely  the  market  for  retail  and  industrial  white
granulated sugar in Great Britain. Moreover, it has
to  be  recalled  that  both  Article  85  and  Article  86
serve  the  common  aim  laid  down  in  point  (g)  of
Article  3  of  the  Treaty,  of  establishing  a  system
ensuring  that  competition  in  the  internal  market  is
not  distorted (431).

(206)  With  regard  to  aggravating  circumstances,  the
following  elements  have  to  be  taken  into  account.

(210)  In  conclusion,  the  aggravating  factors  mentioned
justify  an  increase  of  75 %,  namely  ECU  18,9
million  in  the  basic  amount  for  British  Sugar.

(207)  British  Sugar  was  the  instigator  of  the  agreement
and/or  concerted  practice  and,  throughout  the
relevant  period,  it  remained  the  driving  force
behind  the  infringement.  This  conclusion  is  in
particular  borne  out  by  the  fact  that  the  key
meeting  of  20  June  1986,  which  set  the  principles
for 
future  anti-competitive  conduct,  was
convened  on  British  Sugar’s  initiative.

the 

in 

to 

its 

announced 

(208)  British  Sugar  acted  in  a  manner  contrary  to  the
compliance
contained 
clear  wording 
the
it 
programme,  which 
Commission  in  October  1986  and  introduced  in
December  1986.  As  is  clear  from  the  Napier
Brown  Decision (428),  the  introduction  of  the  same
compliance  programme  was  taken  into  account  as
a  mitigating  factor  in  fixing  the  fine  in  that
decision,  as  a  result  of  which  British  Sugar
benefited  from  a  significant  reduction  of  the  fine
by comparison with the amount which would have
been imposed in the absence of the programme. As
in  detail (429), 
was 
the  compliance
programme  covered  the  whole  range  of  the
company’s  obligations  under  Article  85  and  86,
and  specifically  mentioned  agreements  and/or
concerted  practices  concerning  pricing.  Moreover,
compliance
British 
programme 
ensure
to 
compliance with the Community competition rules,
even  to  go  beyond  its  strict  legal  obligations  and
avoid  any  doubtful  behaviour,  and  to  pass  this
message  on  to  every 
level  of  the  company’s
hierarchy.  The  infringement  found  in  this  Decision
shows  that  this  promise  has  not  been  fulfilled.

Sugar  promised 

in 
every 

its 
step 

set  out 

take 

to 

(209)  The same company is now found to have infringed
Article 85 by engaging in collusive behaviour. This
latter behaviour had already commenced two years
before the end of the Napier Brown procedure (430)
and  it  went  on  for  another  two  years  after  the
adoption of the Napier Brown Decision on 18 July
infringements  of  the  Community
1988.  Both 

(211)  The  Commission 

that 

acknowledges 

the
infringement  was  committed  by  a  British  Sugar
management  which  was  replaced  soon  after  the
relevant  period,  and  that  the  present  parent
company, Associated British Foods (ABF), acquired
British  Sugar  only  after  the  relevant  period  (in
January  1991).  However,  for  the  purpose  of
assessing  the  nature  and  the  gravity  of  the
infringement,  only  British  Sugar’s  behaviour  in  the
relevant  period  is  material.  Liability  is  to  be
attached to British Sugar as a company, not to the
managers  of  the  company,  nor  to  the  parent
company  at  any  point  in  time  during  or  after  the
relevant period.

The fact that ABF will possibly have to bear a part
or  the  whole  of  the  economic  burden  of  the  fine
imposed  on  British  Sugar  is  not  relevant  to  the
Commission’s  assessment  of  the  level  at  which  the
fine should be set. The rule is that the purchaser of
its
a  company  acquires 
liabilities,  including  any  liability  arising  from  the
infringement  of  Community  competition  law.

it  together  with  all 

E.  COMMISSION  NOTICE  ON  THE
NON-IMPOSITION  OR  REDUCTION  OF  FINES  IN
CARTEL  CASES (432)

cooperate  with 

(212)  The  Commission  has  declared  it  to  be  in  the
Community  interest  that  favourable  treatment  in
the  imposition  of  fines  be  shown  to  enterprises
which 
specific
circumstances  set  out  in  the  notice.  While  the
Community  already  had  a  policy  of  being  lenient
in  fixing  fine  levels  for  cartel  members  who
cooperate  with  it,  the  notice  goes  beyond  that
former  practice  and  creates  special  incentives  for
enterprises  who  cooperate  with  the  Commission

the 

in 

it 

L  76/54

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22.3.1999

the 

and thereby enable or help it to detect and prohibit
the cartel. The application of the conditions set out
in the notice for either non-imposition of a fine, or
for one of  the  different  degrees of  reduction in the
level  of  the  fine,  is  therefore  more  favourable  for
the  enterprises  than  was  their  treatment  according
to 
former  practice.  However,  a  direct
application  of  the  notice  is  only  possible  for
cooperation which took place after the publication
of  the  notice  in  the  Official  Journal  on  18  July
1996.  In  all  other  cases  of  cooperation,  the  notice
will be applied by analogy, meaning in this context
essentially  an  extension  ratione  temporis.  Such
favourable
analogous  application  means 
treatment  in  line  with  the  Notice  will  depend  on
fulfilment  of  all  the  substantive  requirements  of
cooperation  as  set  out  in  that  Notice.

that 

1.  All  four  parties

(213)  In  the  written  replies  to  the  revised  statement  of
objections,  which  the  Commission  received  in
February  1996,  none  of  the  four  parties  has
substantially  contested  the  facts  on  which  the
Commission  bases  the  allegations  set  out  in  that
statement  of  objections (433).  All  four  parties  have
therefore  fulfilled  the  substantive  requirements  set
out  under  the  second  indent  of  point  D.2.  of  the
notice.  Since  this  happened  before  the  Notice  was
published  on  18  July  1996,  the  Notice  is  to  be
applied by analogy.

(214)  In  fixing  that  amount  by  which  the  fine  is  to  be
reduced  within  the  range  provided  for  by  point  D.
of  the  notice,  the  Commission  has  taken  into
account  that  the  parties’  admission  of  the  facts  is
no  more  than  the  logical  consequence  of  the  fact
that, in this particular case, the initial statement of
objections  was  replaced  by  a  revised  statement  of
objections  which  took  account  of  the  parties’
contestation  of  certain  facts,  and  that  it  confined
the  allegations  to  those  which  could  be  sustained
with  the  high  degree  of  factual  proof  required  by
the  Court  of  Justice.  Consequently,  by  an
analogous  application  of  the  second  indent  of
point  D.2.  of  the  notice,  the  fines  which  would
have been imposed on British Sugar, Napier Brown
and  James  Budgett 
in  the  absence  of  their
cooperation  with  the  Commission  have  been
reduced  by  10 %  for  each  of  those  companies
(representing  ECU  4,4  million  for  British  Sugar,
ECU  0,2  million  for  Napier  Brown  and  ECU  0,2
million  for  James  Budgett).

2.  Tate &Lyle  in  particular

As  concerns  Tate & Lyle,  the  following  additional
circumstances  have  been  taken  into  account:

(215)  Tate & Lyle  has  cooperated  with  the  Commission,
in  particular  by  sending  the  two  self-incriminating
letters  of  16  July  1990 (434)  and  of  29  August
1990 (435). Since this cooperation took place before
publication  of  the  notice  on  18  July  1996,  the
notice  is  to  be  applied  by  analogy.

(216)  Tate & Lyle  has  met  the  conditions  set  out  under
points  (a),  (b)  and  (c)  of  Section  B:  Tate & Lyle
brought  the  infringement  to  the  Commission’s
attention  at  a  time  when  the  Commission  did  not
know  of  the  agreement  and/or  concerted  practice
and therefore had not taken any investigative steps.
Moreover,  by  the  self-incriminating  letters  of  16
July  1990  and  29  August  1990,  Tate & Lyle  was
the  first  of  the  parties  to  adduct  decisive  evidence
of  the  cartel’s  existence.  Finally,  Tate & Lyle  put
an  end  to  its  involvement  in  the  illegal  activity  no
later than the time when it disclosed this activity to
the  Commission.  In  fact,  the  Chairman  and  Chief
Executive  of  Tate & Lyle  ordered  an  end  to  the
agreement  and/or  concerted  practice  on  2  July
1990,  which  was  shortly  before  Tate & Lyle
informed  the  Commission  of  the  existence  of  the
cartel  at  a  meeting  with 
the  Commission
responsible for competition on 5 July 1990, and by
a  copy  of  its  letter  of  16  July  1990  to  the  OFT.

(217)  However,  after  the  initial  revelations,  Tate & Lyle
did  not  maintain  continuous  and  complete
cooperation  with  the  Commission  throughout  the
investigation. 
substantive
requirements  of  point  (d)  of  Section  B  are  not
fulfilled.  Consequently,  Tate & Lyle  cannot  benefit
from 
to  an
analogous  application  of  section  B  or  of  section  C
of  the  Notice.

treatment  according 

favourable 

Therefore, 

the 

(218)  Tate & Lyle’s cooperation therefore falls under the
first  indent  of  point  D.2.  of  the  Notice.  In  view  of
the  fact  that  Tate & Lyle  disclosed  the  agreement
and/or  concerted  practice  at  a  time  when  the
Commission  was  still  entirely  ignorant  of  the
matter, and with due regard to the particular value
of 
two
self-incriminating  letters  mentioned  above,  and
moreover  taking  into  account  that  Tate & Lyle
also  fulfilled  the  substantive  requirements  under
the  second  indent  of  point  D.2.  of  the  Notice  as
described  above (436),  the  Commission  considers  it
appropriate 
to  grant  Tate & Lyle,  under  an
analogous  application  of  section  D,  a  reduction  of

information  provided 

the 

the 

in 

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L  76/55

50 % (representing ECU 7 million) of the fine that
would  have  been 
it  had  not
cooperated,

imposed 

if 

HAS  ADOPTED  THIS  DECISION:

Article  1

plc, 

Sugar 

Tate & Lyle 

plc,  Napier
British 
Brown & Company  Ltd  and  James  Budgett  Sugars  Ltd
have  infringed  Article  85(1)  by  participating  in  an
agreement  and/or  concerted  practice  the  object  of  which
was  to  restrict  competition  by  the  coordination  of  the
parties’  pricing  policy  on  the  market  for  industrial  sugar
in  Great  Britain.

In  the  case  of  British  Sugar  plc  and  Tate & Lyle  plc  this
participation  lasted  from  20  June  1986  until  2  July
1990.

In  the  case  of  Napier  Brown & Company  Ltd  and  James
Budgett  Sugars  Ltd  the  participation  lasted  from  late
1986  until  2  July  1990.

Article  2

British  Sugar  plc  and  Tate & Lyle  plc  have  infringed
Article  85(1)  by  participating  from  20  June  1986  until  2
July  1990  in  an  agreement  and/or  concerted  practice  the
object  of  which  was  to  restrict  competition  by  the
coordination  of  the  parties’  pricing  policy  on  the  market
for  retail  sugar  in  Great  Britain.

Article  3

A  fine  of  ECU  39,6  million  is  hereby  imposed  on  British
Sugar  plc  in  respect  of  the  infringement  referred  to  in
Articles  1  and  2.

imposed  on
A  fine  of  ECU  7  million 
Tate & Lyle plc in respect of the infringement referred to
in  Articles  1  and  2.

is  hereby 

A  fine  of  ECU  1,8  million  is  hereby  imposed  on  Napier
Brown & Company  Ltd  in  respect  of  the  infringement
referred  to  in  Article  1.

A  fine  of  ECU  1,8  million  is  hereby  imposed  on  James
Budgett Sugars Ltd in respect of the infringement referred
to  in  Article  1.

Article  4

The  fines  imposed  under  Article  3  shall  be  payable  in
ECU  within  three  months  of  the  date  of  notification  of
this  Decision  to  the  following  bank  account  of  the
Banque
European  Commission: 
Bruxelles  Lambert,  Agence  Europe´enne,  Rond-Point
Schuman  5,  B-1040  Brussels.

310-0933000-43, 

that  period, 

the  expiry  of 

shall
After 
automatically  be  payable  at  the  rate  charged  by  the
European  Central  Bank  for  transactions  in  ECU  on  the
first  working  day  of  the  month  in  which  this  Decision
was  adopted,  plus  3,5  percentage  points,  namely
7,50 %.

interest 

Article  5

This  Decision  is  addressed  to:

—  British  Sugar  plc,  Oundle  Road,  Peterborough

PE29QY,  United  Kingdom,

—  Tate & Lyle  plc,  Sugar  Quay,  Lower  Thames  Street,

London  EC3R  6DQ,  United  Kingdom,

—  Napier  Brown & Company  Ltd,  International  House,
1  St.  Katharine’s  Way,  London  E1  9UN,  United
Kingdom,

—  James  Budgett  Sugars  Ltd,  Beacon  House,  Rainsford
Road,  Chelmsford,  Essex  CM1  2PY,  United
Kingdom.

This  Decision  shall  be  enforceable  pursuant  to  Article
192  of  the  Treaty.

Done  at  Brussels,  14  October  1998.

For  the  Commission

Karel  VAN  MIERT

Member  of  the  Commission

L  76/56

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22.3.1999

Notes

(1)  OJ  13,  21.2.1962,  p.  204/62.
(2)  OJ  127,  20.8.1963,  p.  2268/63.
(3)  British  Sugar  is  often  addressed  to  under  the  following
abbreviations which also occur in this Decision: BS = British
Sugar;  BSC  =  ‘British  Sugar  Company’.

(4)  Tate & Lyle  is  often  addressed  to  under  the  following
abbreviations  which  also  occur  in  this  Decision:  T & L  =
Tate & Lyle;  TLS  =  ‘Tate & Lyle  Sugars’,  see  also  recital
9.

(5)  See  recital  58.
(6)  See  also  recital  59.
(7)  Council Regulation (EEC) No 793/82 (OJ L 94, 21.4.1972,
p.  1),  and  Commission  Regulation  (EEC)  No  2103/77  (OJ
L  246,  27.9.1977,  p.  12).

(8)  Paragraph  4.30,  page  23,  of  the  Monopolies  and  Mergers
Commission  (‘MMC’)  report  ‘Tate & Lyle  plc  and  British
Sugar plc. A report on the proposed merger’, (HMSO Cmd
1435  of  February  1991),  (hereinafter  ‘the  third  MMC
report’)  gives  a  breakdown  of  the  total  UK  sales  of  UK
produced  sugar  into  the  different  types  for  the  year
1998/89:  granulated  sugar:  73,2 %,  liquid  sugar:  17 %;
speciality  sugars  8 %;  other  types;  1,9 %.

(9)  For  fuller  details  of  the  3  different  types  of  sugar  see
paragraphs  2.62  to  2.73  of  the  MMC  report  ‘Tate & Lyle
plc  and  Ferruzzi  Finanziaria  SpA  and  S & W  Berisford  plc.
A  report  on  the  existing  and  proposed  mergers’  (HMSO
Cmd  89  of  February  1987)  (hereinafter  ‘the  second  MMC
report’)  and  paragraphs  4.30  to  4.32  of  the  third  MMC
report.

(10)  Protocol  3  on  ACP  sugar  annexed  to  the  ACP-EEC  Lome´
Convention, signed on 28 February 1975, and contained in
Protocol  8  of  the  fourth  ACP-EEC  Convention,  signed  at
Lome´ on  15  December  1989.

(11)  All  the  parties  to  the  present  proceedings  have  agreed  with
this  assessment.  See  also  the  second  MMC  report  at
paragraphs  2.31  to  2.35  and  the  third  MMC  report  at
paragraph 7.7.

(12)  Both  beet  growers  and  sugar  processors  also  contribute  to
the  cost  of  financing  the  sugar  scheme  through  production
levies.

(13)  The tender system on the basis of which export refunds are
granted  operates  in  the  following  way.  The  Commission
issues  an  invitation  to  tender  for  export  refunds.  Exporters
may only bid for white sugar export refunds. The bid must
specify the quantities to be exported and the level of refund
which  the  processor  considers  necessary  to  achieve  its  sales
objectives.  After  having  received  all  the  tenders,  the
Commission  will  calculate  the  maximum  amount  of  refund
to  be  paid.  All  tenderers  under  this  maximum  receive  an
export  licence  and  the  refund  they  indicated.  They  are
obliged  to  export  the  amount  of  sugar  they  were  tendering
for.  As  part  of  the  export  refund,  the  successful  tenderers
receive  a  flat  sum  to  cover  the  costs  of  transport  to  the
(fobbing  costs).  The
Community  harbour  of  export 
Commission  uses  the  refund  system  as  an  instrument  to
keep  the  internal  market  in  balance  and  to  support
domestic  market  prices.  The  Commission  will  issue  an
invitation to tender when it considers that the level of sugar
in  the  internal  market  is  in  excess  of  consumption  plus  a
certain  amount  of  stock.  In  practice,  a  tender  takes  place
every week. Some 98 % of the A/B sugar surplus is disposed
of this way. Even though the average price achieved via the
refund  system  may  at  times  be  marginally  below  the

effective support price, most Community refiners prefer this
to sales into intervention because this latter option means in
practice  that  the  seller  must  itself  store  the  sugar  in  silos
that  are  normally  required  for  next  season’s  crop.  Of  the
tonnes  of  sugar  annually
approximately  16  million 
produced in the Community in recent years, about 3 million
tonnes  have  been  ‘sold  into  restitution’  each  year.

(14)  On  13  February  1989  it  changed  its  name  to  Berisford

International  plc.

(15)  For  further  information  about  British  Sugar,  reference  is
made  to  paragraphs  3.26  to  3.36  of  the  third  MMC
report.

(16)  See James Budgett’s written reply to the initial statement of
objections,  page  24.  See  also  transcript  of  investigations
carried  out  on  27  May  1994  under  Article  14(2)  of
Regulation  No  17  at  Tate & Lyle  (Annex  1  to  the  revised
statement  of  objections),  page  6,  and 
transcript  of
investigations  carried  out  on  25  May  1994  under  Article
14(2) of Regulation No 17 at British Sugar (Annex 2 to the
revised  statement  of  objections),  page  12.

(17)  See James Budgett’s written reply to the initial statement of

objections,  page  25.

(18)  For  a  description  of  the  role  of  the  sugar  merchants,
reference  is  also  made  to  paragraphs  4.38  to  4.40  of  the
third  MMC  report.

(19)  Source: 

Internal 

statistics  of  Directorate-General  VI

(Agriculture)  of  the  Commission.

(20)  See  recital  3  of  this  Decision.

(21)  Market  shares  in  Great  Britain  do  not  differ  to  an
appreciable  extent.  British  Sugar  and  Tate & Lyle  have
continuously  and  constantly  held  high  market  shares  in  the
period  concerned  by  this  Decision.

(22)  These  figures  have  been  provided  by  Tate & Lyle  and
include liquid and speciality sugars. British Sugar calculated
figures  on  a  different  basis,  considering  only  granulated
sugar.  The  resultant  differences  in  market  shares  are
immaterial  for  the  purposes  of  this  Decision.  According  to
British Sugar, it had a market share of between 55,9 % and
58,6 %  during  the  period  in  question,  Tate & Lyle  had
between  33,1 %  and  36,7 %,  and  imports  increased  from
5,3 %  in  1986/87  to  9,2 %  in  1989/90.

(23)  From  1986/87  to  1989/90,  in  thousand  tonnes  white  sugar
equivalent, imports from Denmark increased from 34 to 60,
imports  from  France  increased  from  7  to  42,  and  imports
from Ireland increased from 38 to 48. Worksheet of DG VI
of the Commission of the European Communities as quoted
in  British  Sugar’s  written  reply  to  the  initial  statement  of
objections in table 5 on page 33 and as reproduced as table
7  after  page  63  of  British  Sugar’s  written  reply  to  the
revised  statement  of  objections.

(24)  See  British  Sugar’s  written  reply  to  the  initial  statement  of
objections at paragraphs 61, 105 and British Sugar’s written
reply  to  the  revised  statement  of  objections  at  paragraph
164.

(25)  Commission  Decision  88/518/EEC  of  18  July  1988  (Case
No  IV/30.778  Napier  Brown  —  British  Sugar)  (OJ  L  284,
19.10.1988,  p.  41).

(26)  Second  MMC  report,  paragraphs  16.25,  16.62  and  third

MMC  report,  paragraphs  7.25,  7.26.

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(27)  See  recitals  64  and  65  of  this  Decision  and  the  second

MMC  report  at  paragraph  16.27.

(44)  See  paragraph  7.18  of  the  third  MMC  report.
(45)  See  recitals  59,  60  to  65,  74,  86,  87  and  88  of  this

(28)  The  third  MMC  report,  paragraphs  4.59  and  7.28.
(29)  From  the  table  at  recital  14  and  the  analysis  made  under
recitals  20  and  21  below  it  can  be  seen  that  during  the
period  in  question,  when  as  a  consequence  of  British
Sugar’s  initiative  prices  increasing,  imports  into  the  UK
from  other  Member  States  increased  significantly.  See
Tate & Lyle’s  written  reply  to  the  initial  statement  of
objections  paragraphs  3.35  to  3.48,  volume  I.  Appendix  II
to  Tate & Lyle’s  letter  to  the  Office  of  Fair  Trading  of  29
August  1990  (Annex  3  to  the  revised  statement  of
objections).

(30)  See  the  third  MMC  report  paragraphs  7.28,  4.59.  In  the
in  this  case  the
initial  statement  of  objections  sent 
Commission  argued  that  these  practices,  in  which  British
Sugar  participated, 
infringed  Articles  85(1)  and  86.
However,  taking  account  of  the  written  replies  of  the
companies  in  question  and  of  the  evidence  presented  at  the
initial  statement  of
oral  hearing 
objections,  the  Commission  concluded  that  there  was  not
sufficient  evidence  to  demonstrate  that  Articles  85(1)  or  86
were  infringed  by  these  practices.

in  relation  to  the 

(31)  See  transcript  of  investigations  at  Tate & Lyle  on  27  May
1994  (Annex  1  to  the  revised  statement  of  objections,  page
7), and Tate & Lyle’s letter of 16 July 1990 (Annex 5 to the
revised  statement  of  objections)  quoted 
in  recital  36
below.

(32)  See  also  Tate & Lyle’s  written  reply  to  the  initial  statement

of  objections,  paragraph  3.31,  volume  I.

(33)  Tate & Lyle’s’s  written  reply  to  the  initial  statement  of
objections,  paragraph  2.6,  volume  I,  and  British  Sugar
written  reply  to  the 
initial  statement  of  objections,
paragraph 88.

(34)  British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  paragraph  85.

(35)  The  third  MMC  report,  paragraph  7.27.
(36)  The  third  MMC  report,  paragraph  7.25.
(37)  Paragraphs 86 and 92 of British Sugar’s written reply to the
initial  statement  of  objections,  paragraph  3.2.2  of  James
Budgett’s written reply to the initial statement of objections
and  paragraph  61  of  its  written  reply  to  the  revised
statement  of  objections.

(38)  British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  paragraph  70.

(39)  See  statistics  on  the  United  Kingdom  sugar  market  quoted

above  under  recital  14.

(40)  Napier  Brown’s  written  reply  to  the  revised  statement  of
objections,  at  paragraph  34.  Figures  set  out  in  Annex  A  of
Napier  Brown’s  response  to  the 
initial  statement  of
objections.

(41)  James  Budgett’s  written  reply  to  the  revised  statement  of
objections,  at  paragraph  60.  Figures  stated  in  table  6  of
James  Budgett’s  response  to  the  original  statement  of
objections  and  in  Annex  4  of  its  response  to  the  revised
statement  of  objections.
(42)  See  recital  5  of  this  Decision.
(43)  See paragraph 9 of the first MMC report, paragraphs 16.24
and  16.39  of  the  second  MMC  report  and  paragraph  7.18
of the third MMC report. See also paragraph 100 of British
Sugar’s  written  reply  to  the  initial  statement  of  objections
and  paragraphs  32  to  33  of  its  written  reply  to  the  revised
statement  of  objections.  See  furthermore  paragraphs  2.4
and  2.16  of  Tate & Lyle’s  written  reply  to  the  initial
statement  of  objections  and  point  statement  of  objections
and  point  paragraph  20  of  its  written  reply  to  the  revised
statement  of  objections.

Decision.

(46)  This  is  not  disputed  by  the  merchants:  see  Napier  Brown’s
written  reply  to  the  initial  statement  of  objections  at
paragraphs 30 and 55, and furthermore paragraph 17 of its
written reply to the revised statement of objections. See also
James  Budgett’s  written  reply  to  the  initial  statement  of
objections at paragraph 6.4, and furthermore paragraph 79
of  its  written  reply  to  the  revised  statement  of  objections.

(47)  See  recital  16  of  this  Decision;  British  Sugar’s  written  reply
to  the  initial  statement  of  objections  at  paragraphs  61  and
105,  and  British  Sugar’s  written  reply  to  the  revised
statement  of  objections  at  paragraph  164.

(48)  See  recital  19  of  this  Decision.
(49)  See  recitals  59,  60  to  65,  74  and  86  to  88  of  this

Decision.

(50)  Third  MMC  report,  paragraph  1.4.
(51)  Napier  Brown  Decision,  see  footnote  25.
(52)  In  English  in  the  original  text.
(53)  In  English  in  the  original  text.
(54)  Napier  Brown  Decision,  see  footnote  25.
(55)  Letter  of  29  August  1990  from  Tate & Lyle  to  the  United
Kingdom  Office  of  Fair  Trading  (Annex  3  to  the  revised
statement  of  objections)  at  point  1.

(56)  See  footnote  55.
(57)  In  English  in  the  original  text.
(58)  Memorandum  of  arrangement,  dated  15  April  1991,
between  British  Sugar  and  Tate & Lyle  (Annex  4  to  the
revised  statement  of  objections).

(59)  In  English  in  the  original  text.
(60)  The list of meetings is attaches to Tate & Lyle’s letter to the
OFT  of  29  August  1990  (Annex  3  to  the  revised  statement
of  objections).
this 

support 

(61)  In 

the 

respect, 

three  companies 

the
Commission’s  account  of  facts  by  expressly  confirming  or
at least implicitly accepting it when presenting their defence.
See  British  Sugar’s  written  reply  to  the  initial  statement  of
objections  at  paragraphs  11  et  seq.  and  its  written  reply  to
the  revised  statement  of  objections  at  paragraphs  1  et  seq.;
Napier  Brown’s  written  reply  to  the  initial  statement  of
objections  at  paragraphs  31  to  33  and  its  written  reply  to
the  revised  statement  of  objections  at  paragraph  10;  James
Budgett’s written reply to the initial statement of objections
at paragraphs 3.4 to 4.4 and its written reply to the revised
statement  of  objections  at  paragraph  3.

(62)  Letter  of  16  July  1990 

the
Director-General  of  the  Office  of  Fair  Trading  (Annex  5  to
the  revised  statement  of  objections).

from  Tate & Lyle 

to 

(63)  In  English  in  the  original  text.
(64)  Representative of British Sugar. Minutes of the oral hearing
following  the  initial  statement  of  objections,  page  103.

(65)  In  English  in  the  original  text.
(66)  Transcript  of  the  investigations  of  25  May  1994  at  British
Sugar (Annex 2 to the revised statement of objections), page
3.

(67)  In  English  in  the  original  text.
(68)  James  Budgett’s  written  reply  to  the  Commission’s  request
for  information  of  9  June  1994  under  Article  11  of
Regulation  No  17  (Annex  6  to  the  revised  statement  of
objections),  point  A.1.

(69)  Transcript  of  investigations  carried  out  at  Tate & Lyle  on
27  May  1994  (Annex  1  to  the  revised  statement  of
objections),  page  2.

(70)  Transcript  of  investigations  carried  out  at  Tate & Lyle  on
27  May  1994  (Annex  1  to  the  revised  statement  of
objections),  page  2.

(71)  In  English  in  the  original  text.

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(72)  Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  4,  paragraph  33.

(73)  Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  4,  paragraph  33.

(74)  In  English  in  the  original  text.
(75)  See  paragraph  38.
(76)  Written  reply  to  the  revised  statement  of  objections,

paragraph 11.

(77)  At  paragraph  30(a)  of  the  revised  statement  of  objections.
(78)  See  point  (a)  of  paragraph  29  of  this  Decision.
(79)  In  English  in  the  original  text.
(80)  Paragraph  3.18,  volume  I  of  Tate & Lyle’s  written  reply  to

the  initial  statement  of  objections.

(81)  In  English  in  the  original  text.
(82)  Paragraph  61,  volume  II  of  Tate & Lyle’s  written  reply  to
the  initial  statement  of  objections.  See  also  Tate & Lyle’s
letter  to  the  OFT  dated  16  July  1990  (Annex  5  to  the
revised  statement  of  objections)  quoted  at  paragraph  36.
See  also  the  letter  dated  19  October  1990  (Annex  7  to  the
revised  statement  of  objections).

(83)  In  English  in  the  original  text.
(84)  Minutes  of  oral  hearing  following  the  initial  statement  of
objections,  page  104.  See  also  minutes  of  the  oral  hearing
following  the  revised  statement  of  objections  on  18  and  19
April  1996,  page  11.

(85)  In  English  in  the  original  text.
(86)  British  Sugar’s  written  reply  to  the  revised  statement  of
objections,  paragraph  41.  Representative  of  British  Sugar,
minutes  of  the  oral  hearing  following  the  revised  statement
of  objections  on  18  and  19  April  1996,  page  11.

(87)  At  paragraph  4.4.6.
(88)  In  English  in  the  original  text.
(89)  James  Budgett’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  24.

(90)  In  English  in  the  original  text.
(91)  James  Budgett’s  written  reply  to  the  revised  statement  of

objections,  paragraph  30.

(110) In  English  in  the  original  text.
(111) At  paragraph  12.
(112) In  English  in  the  original  text.
(113) Tate & Lyle’s  letter  to  the  OFT  of  29  August  1990  (Annex

3  to  the  revised  statement  of  objections),  page  3.

(114) In  English  in  the  original  text.
(115) At  paragraphs  19  to  23.
(116) In  English  in  the  original  text.
(117) In  English  in  the  original  text.
(118) At  paragraphs  27  to  29.
(119) In  English  in  the  original  text.
(120) Transcript of investigations at Tate & Lyle on 27 May 1994

(Annex  1  to  the  revised  statement  of  objections),  page  4.

(121) In  English  in  the  original  text.
(122) Transcript of investigations at Tate & Lyle on 27 May 1994

(Annex  1  to  the  revised  statement  of  objections),  page  4.

(123) Transcript of investigations at Tate & Lyle on 27 May 1994

(Annex  1  to  the  revised  statement  of  objections),  page  9.

(124) At  section  4,  paragraph  36.
(125) In  English  in  the  original  text.
(126) Written  statement  of  12  December  1990  of  Tate & Lyle

(Annex  14  to  the  revised  statement  of  objections).

(127) In  English  in  the  original  text.
(128) Transcript  of  the  investigations  at  Tate & Lyle  on  27  May
1994 (Annex 1 to the revised statement of objections), page
9.

(129) Transcript  of  the  investigations  at  Tate & Lyle  on  27  May
1994 (Annex 1 to the revised statement of objections), page
4.

(130) In  English  in  the  original  text.
(131) Tate & Lyle’s letter to the OFT dated 16 July 1990 (Annex

5  to  the  revised  statement  of  objections),  page  4.

(92)  Transcript of investigations carried out on 27 May 1994 at
the  revised  statement  of
to 

(Annex  1 

Tate & Lyle 
objections),  page  2.

(93)  In  English  in  the  original  text.
(94)  Transcript  of  investigations  of  25  May  1994  at  British
Sugar (Annex 2 to the revised statement of objections), page
14.

(95)  Written  reply  to  the  revised  statement  of  objections,

paragraph 48.

(96)  Transcript  of  the  investigations  carried  out  at  Tate & Lyle
on  27  May  1994  (Annex  1  to  the  revised  statement  of
objections),  page  3.

(97)  In  English  in  the  original  text.
(98)  Transcript  of  the  investigations  (Annex  1  to  the  revised

statement  of  objections),  page  5.

(99)  Transcript  of  the  investigations  (Annex  1  to  the  revised

statement  of  objections),  page  3.

(100) In  English  in  the  original  text.
(101) Tate & Lyle’s  responses,  dated  15  January  1991, 

to
hand-written  questionnaire,  (Annex  13  to  the  revised
statement  of  objections).
(102) In  English  in  the  original  text.
(103) At  section,  4,  paragraph  36.
(104) In  English  in  the  original  text.
(105) At  section  4,  paragraph  36.
(106) In  English  in  the  original  text.
(107) Tate & Lyle’s letter to the OFT dated 16 July 1990 (Annex

5  to  the  revised  statement  of  objections),  page  4.

(108) In  English  in  the  original  text.
(109) Transcript  of  investigations  on  25  May  1994  at  British
Sugar (Annex 2 to the revised statement of objections), page
7.

(132) In  English  in  the  original  text.
(133) See, 

for  example,  paragraph  41; 

the
investigations  carried  at  Tate & Lyle  on  27  May  1994
(Annex  1  to  the  revised  statement  of  objections),  page  3.

transcript  of 

(134) James  Budgett’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  4.7  on  page  64.

(135) In  English  in  the  original  text.
(136) James  Budgett’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  4.7  on  page  64.

(137) In  English  in  the  original  text.
(138) Napier  Brown’s  written  reply  to  the  revised  statement  of

objections,  paragraph  12.

(139) Transcript  of  investigations  on  27  May  1994  at  British
Sugar (Annex 2 to the revised statement of objections), page
12.

(140) In  English  in  the  original  text.
(141) Tate & Lyle’s  letter  to  the  OFT  of  29  August  1990  (Annex
3  to  the  revised  statement  of  objections),  pages  3  and  4.

(142) In  English  in  the  original  text.
(143) Forwarded  to  the  Commission  by  letter  of  7  August  1990

(Annex  8  to  the  revised  statement  of  objections)

(144) Letter  of  16  July  1990 

the
Director-General  of  the  Office  of  Fair  Trading  (Annex  5  to
the  revised  statement  of  objections),  see  recital  36.

from  Tate & Lyle 

to 

(145) James  Budgett’s  written  reply  to  the  initial  statement  of
objections  at  paragraph  4.3.2,  and  Napier  Brown’s  written
reply  to  the  initial  statement  of  objections  at  paragraph
33.

(146) That  is,  Tate & Lyle’s  letter  to  the  OFT  of  16  July  1990.

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(147) This statement is irreconcilable with all other statements by
British  Sugar.  In  its  written  reply  to  the  initial  statement  of
objections  and  in  its  written  reply  to  the  revised  statement
of  objections,  as  well  as  in  the  two  hearings  which  took
place,  British  Sugar  never  disputed  the  Commission’s
finding  that  its  meetings  with  Tate & Lyle  started  on  20
June  1986.

(148) In  English  in  the  original  text.
(149) In  English  in  the  original  text.
(150) James  Budgett & Son  Limited  —  Business 

1987-1990 
objections).

(Annex  9 

to 

the 

revised 

strategy
statement  of

(151) In  English  in  the  original  text.
(152) Agenda  of  board  meeting  on  2  August  1990  of  James
Budgett  (Annex  10  to  the  revised  statement  of  objections).

(153) In  English  in  the  original  text.
(154) Internal  note  of  29 

June  1987  of  De  Danske
Sukkerfabrikker  (Annex  11  to  the  revised  statement  of
objections).

(155) Peter  Jacobs,  at  that  time  managing  director  of  British

Sugar.

(156) Translation  from  Danish.
(157) Memorandum  of  1  March  1989  to  R.A.  Shirtcliff  (T & L’s
chief  executive)  and  C.  Rutherford  (divisional  director  in
T & L,  sales  and  marketing)  from  F. R.  Smith  (General
Manager  in  T & L,  industrial  products)  entitled  ‘Subject:
1990-Pricing’  (Annex  12  to  the  revised  statement  of
objections).

(158) Mr Ridgwell is the chairman and joint managing director of

Napier  Brown.

(159) In  English  in  the  original  text.
(160) For  details  see  recital  6.
(161) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  tables  2  to  6.

(162) Protocol  of  the  oral  hearing  on  18  and  19  April  1996,

pages  26  to  27.

(163) See  recital  31.
(164) OFT  News  Release  No  54/96  of  11  December  1996.
(165) For  fuller  details  of  the  different  sweeteners  available,  and
their  particular  characteristics,  see  paragraphs  2.59  to  2.75
of  the  second  MMC  report.

(166) The  common  agricultural  policy  sugar  scheme  is  described

in  recitals  4  to  7.
(167) See  also  recital  8.
(168) Judgment  of  16  December  1975  in  Joined  Cases  40  to  48,
50, 54 to 56, 111, 113 and 114/73, Suiker Unie and others
v.  Commission,  [1975]  ECR  1663,  1914,  paragraph  16.

(169) Suiker  Unie  judgment,  see  footnote  168;  at  paragraph  17.
(170) Suiker  Unie  judgment,  see  footnote  168;  at  paragraph  24.
(171) See  British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  paragraph  92.

(172) See  also  recitals  16  to  21  on  imports  into  the  United

Kingdom  and  Great  Britain.

(173) See  recital  16.
(174) At  paragraph  16.62.
(175) See  the  third  MMC  report  paragraphs  4.59  and  7.28.
(176) This conclusion is supported by the second MMC report, at

paragraph  16.27.

(177) See  transcript  of  investigations  at  Tate & Lyle  on  27  May
1994 (Annex 1 to the revised statement of objections), page
12.

(178) See  Case  41/69,  ACF  Chemiefarma  NV  v.  Commission,
[1970]  ECR  661,  at  paragraph  112,  as  referred  to  in  the
judgment  of 24 October 1991, Case T-1/89 Rhône-Poulenc
v.  Commission  [1991]  ECR  II-867,  at  paragraph  120.

(179) Judgment  of  14  July  1972 

in  Case  48/69,  ICI  v.

Commission,  [1972]  ECR  619,  at  paragraph  64.

(180) ICI  judgment,  see  footnote  179;  at  paragraphs  65,  66  and

67.

(181) Suiker  Unie  judgment,  see  footnote  168;  at  paragraphs  173
and 174. As confirmed by the Rhône-Poulenc judgment, see
footnote  178;  at  paragraph  121.

(182) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraphs
125, 126 and 127. Also, Case T-13/89, ICI v. Commission,
[1992]  ECR  II-1021,  1116,  paragraphs  259  to  261.

(183) For the subject matter of this infringement see recitals 72 et

seq.

(184) As  defined  in  recital  66.
(185) As  defined  in  recitals  67  to  69.
(186) See  in  particular  recitals  44  to  45.
(187) As to the reassuring value for British Sugar see for example

recital  46  this  Decision.

(188) Joined  Cases  56  and  58/64,  Consten  and  Grundig,  [1966]
ECR  299,  at  p.  342;  see  also  the  opinion  of  Judge
Vesterdorf, 
the
Rhône-Poulenc  case,  see  footnote  178;  at  page  942.

as  Advocate-General 

acting 

in 

(189) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  4,  paragraph  93.

(190) See  recital  33  of  this  Decision.
(191) See  its  written  reply  to  the  revised  statement  of  objections,

at  paragraph  2.

(192) At  paragraphs  78  to  83  of  its  written  reply  to  the  revised

statement  of  objections.

(193) At paragraphs 110 to 120 of its written reply to the revised

statement  of  objections.

(194) Rhône-Poulenc  judgment,  see  footnote  178.
(195) At  section  4,  paragraphs  51  to  53.
(196) Tate & Lyle’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  3.5,  volume  I.

(197) In  English  in  the  original  text.
(198) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  1,  paragraph  1.4.

(199) In  English  in  the  original  text.
(200) Tate & Lyle’s  written  reply  to  the  initial  statement  of
objections,  at  paragraph  3.7,  volume  I,  Tate & Lyle’s
written  reply  to  the  revised  statement  of  objections,  at
section  1,  paragraph  1.6.
(201) In  English  in  the  original  text.
(202) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraph  2.5.

(203) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  4,  paragraph  55.

(204) At  paragraphs  8  and  17.
(205) At  paragraphs  73  to  79.
(206) At paragraph 54 of its written reply to the revised statement

of  objections.

(207) British  Sugar  at  paragraphs  11  and  53;  Tate & Lyle  at
section  4,  paragraphs  20  and  53;  Napier  Brown  at
paragraph  29;  James  Budgett  infra.
(208) See  recitals  72  and  74  of  this  Decision.
(209) Jugdment  of  the  Court  of  Justice  of  13  February  1979  in
Case  85/76  Hoffmann-La  Roche  v.  Commission  [1979]
ECR  461,  at  paragraph  123.

(210) In  its  judgment  of  21  August  1996  (see  recital  58  of  this
Decision),  the  UK  Restrictive  Practices  Court  comes  to  the
same  conclusion.

(211) See  recitals  66  to  71  of  this  Decision.
(212) See  recitals  72  to  74  of  this  Decision.
(213) At  recitals  91  to  92.
(214) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraphs

126  and  127;  see  also  this  Decision  at  recital  70.

(215) See  recital  10.
(216) Cited  under  recitals  30,  44,  50.
(217) See  recital  66  of  this  Decision.
(218) See  recital  30  of  this  Decision.
(219) See  recitals  31  and  58  of  this  Decision.
(220) See  recital  66  of  this  Decision.

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(221) See  recital  51  of  this  Decision.
(222) See  recital  72  of  this  Decision.
(223) See  recital  53  of  this  Decision.
(224) See  recital  56  of  this  Decision.
(225) Rhône-Poulenc  judgment,  see  footnote  178.
(226) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraphs

121  to  124.

(227) Suiker  Unie  judgment,  see  footnote  168;  at  paragraphs  172

to  176.

(228) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraph

123.

(229) Rhône-Poulenc  jugdment,  see  footnote  178;  at  paragraphs

122,  123  and  124.

(230) British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  148.

(257) In  English  in  the  original  text.
(258) Tate & Lyle’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  3.5,  volume  I.

(259) In  English  in  the  original  text.
(260) Tate & Lyle’s  written  reply  to  the  initial  statement  of
objections,  at  paragraph  3.7,  volume  I;  Tate & Lyle’s
written  reply  to  the  revised  statement  of  objections,  at
section  1,  paragraph  1.6.
(261) In  English  in  the  original  text.
(262) Tate & Lyle’s  written  reply  to  the  initial  statement  of
objections,  at  paragraph  1.6,  volume  I;  see  also  its  written
reply  to  the  revised  statement  of  objections,  at  section  1,
paragraph 1.6.

(263) In  English  in  the  original  text.
(264) Tate & Lyle’s  written  reply  to  the  revised  statement  of

(231) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraph  2.12.

objections,  paragraph  41.

(232) Written  reply  to  the  revised  statement  of  objections,  at

paragraph  37,  table  10.

(233) Written  reply  to  the  revised  statement  of  objections,  at

paragraph 43.

(234) Written  reply  to  the  revised  statement  of  objections,  at

paragraph 8.

(235) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  10.

(236) Written  reply  to  the  revised  statement  of  objections,  at

paragraphs  10  and  125.

(237) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  125.

(238) British  Sugar’s  written  reply  to  the  initial  statement  of
objections,  at  paragraph  206;  British  Sugar’s  written  reply
to  the  revised  statement  of  objections,  at  paragraph  10.
(239) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  49.

(240) British  Sugar’s  written  reply  to  the  initial  statement  of
objections,  at  paragraph  183,  including  Appendix  19  and
graphs  H  and  J;  British  Sugar’s  written  reply  to  the  revised
statement  of  objections,  at  paragraph  49.

(241) British  Sugar’s  written  reply  to  the  initial  statement  of
objections,  at  paragraph  203,  including  Appendix  10.
(242) British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  paragraphs  204  to  207.

(243) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  51.

(244) British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  189.
(245) In  English  in  the  original  text.
(246) British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  192.
(247) In  English  in  the  original  text.
(248) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  52.

(249) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  122.

(250) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  123.

(251) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  125.

(252) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  126.

(253) Transcript  of  the  investigations  held  at  Tate & Lyle  on  27
May 1994 (Annex 1 to the revised statement of objections),
page 8.

(254) Tate & Lyle’s  written  reply  to  the  initial  statement  of
objections,  paragraphs  3.15  to  3.18  and  3.25,  volume  I;
Tate & Lyle’s  written  reply  to  the  revised  statement  of
objections,  at  section  4,  paragraph  60.

(255) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraphs  2.2  and  2.3.

(265) In  English  in  the  original  text.
(266) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraph  2.13.

(267) In  English  in  the  original  text.
(268) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraph  2.6.

(269) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraph  2.7.

(270) Tate & Lyle’s  written  reply  to  the  revised  statement  of
objections, at section 1, paragraph 1.5, see also at section 2,
paragraph 2.8.

(271) Napier  Brown’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  12.

(272) Napier  Brown’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  15.

(273) At  paragraph  24b.
(274) James  Budgett’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  39.

(275) Cited under recital 36 (Annex 5 to the revised statement of

objections,  at  page  4).

(276) In  English  in  the  original  text.
(277) Cited under recital 36 (Annex 5 to the revised statement of

objections,  at  page  4).

(278) In  English  in  the  original  text.
(279) See  recitals  31  and  58  of  this  Decision.
(280) In  English  in  the  original  text.
(281) Consten  and  Grundig  judgment,  see  footnote  188;  at  page

342.

(282) Rhône-Poulenc  case,  see  footnote  178;  at  pages  II-869  ff.
(283) Opinion of Judge Vesterdorf, acting as Advocate-General in
the  Rhône-Poulenc  case,  see  footnote  178;  at  page  II-942.

(284) See  recital  97  of  this  Decision.
(285) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraph

122.

(286) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraph

123.

(287) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraph

124.

(288) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraph

120.

(289) ACF  Chemiefarma  NV  judgment,  see  footnote  178;  at

paragraph  112.

(290) Rhône-Poulenc  judgment,  see  footnote  178;  at  paragraphs

126  and  127.

(291) On the object of the meetings, see also recitals 72 to 74, 90

to  94  and  recitals  134  to  154  of  this  Decision.

(292) See  recitals  29(a),  30  to  46  of  this  Decision.
(293) See  recitals  72  to  74,  90  of  this  Decision.
(294) See  recital  90  of  this  Decision.
(295) See  recitals  44  to  45,  72  to  73  of  this  Decision.
(296) See  recital  41  of  this  Decision.
(297) Tate & Lyle’s  written  reply  to  the  revised  statement  of

(256) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  4,  paragraph  36.

objections,  at  section  1,  point  1.4.

(298) In  English  in  the  original  text.

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(299) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraph  2.12.

(300) In  English  in  the  original  text.
(301) See  recital  47  of  this  Decision;  British  Sugar’s  written  reply
to the revised statement of objections, at paragraph 10 and
125; Tate & Lyle’s written reply to the revised statement of
objections,  at  section  2,  paragraph  2.13.

(302) British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  189.
(303) In  English  in  the  original  text.
(304) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraph  2.13.

(305) In  English  in  the  original  text.
(306) Tate & Lyle’s  written  reply  to  the  initial  statement  of
objections,  at  paragraph  1.6.,  volume  I;  and  its  written
reply  to  the  revised  statement  of  objections,  at  section  1,
paragraph 1.6.

(307) In  English  in  the  original  text.
(308) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  2,  paragraph  2.13.

(309) In  English  in  the  original  text.
(310) See  recitals  72  to  74,  90  of  this  Decision.
(311) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  paragraph  7.

(312) At paragraph 10 of its written reply to the revised statement

of  objections.

(313) Paragraph 165 of British Sugar’s written reply to the initial

statement  of  objections.
(314) In  English  in  the  original  text.
(315) Paragraph  20  of  British  Sugar’s  written  reply  to  the  initial

statement  of  objections.
(316) In  English  in  the  original  text.
(317) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  21.

(337) At  paragraphs  21  to  25.
(338) See  recitals  44  and  45  of  this  Decision.
(339) At  paragraphs  34  and  35.
(340) See  recitals  44  and  45  of  this  Decision.
(341) See  recitals  32  and  33  of  this  Decision.
(342) See  recital  26  of  this  Decision.
(343) Protocol of the oral hearing on 18 and 19 April 1996, page

76.

(344) Protocol of the oral hearing on 18 and 19 April 1996, page

76.

(345) Protocol of the oral hearing on 18 and 19 April 1996, page

76.

(346) Tate & Lyle’s letter to the OFT dated 16 July 1990 (Annex

5  to  the  revised  statement  of  objections).

(347) Tate & Lyle’s  letter  of  29  August  1990  to  the  OFT  (Annex

3  to  the  revised  statement  of  objections).

(348) Protocol of the oral hearing on 18 and 19 April 1996, page

77.

(349) In  English  in  the  original  text.
(350) Tate & Lyle’s letter to the OFT dated 16 July 1990 (Annex

5  to  the  revised  statement  of  objections)  at  page  3.

(351) In  English  in  the  original  text.
(352) See  recital  10  of  this  Decision.
(353) Tate & Lyle’s  letter  of  29  August  1990  of  the  OFT  (Annex
3  to  the  revised  statement  of  objections),  cited  at  recital
30.

(354) Napier  Brown  Decision,  see  footnote  25.
(355) Napier  Brown  Decision,  see  footnote  25;  at  paragraphs  85

and  86.

(356) Napier  Brown  Decision,  see  footnote  25;  at  paragraph  60.
(357) See  recital  26  of  this  Decision.
(358) See  recitals  137  to  139  of  this  Decision.
(359) British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  20.

(318) In  English  in  the  original  text.
(319) British  Sugar’s  representations  during  the  oral  hearing  on

(360) In  English  in  the  original  text.
(361) Representation  by  Mr  Ridgwell,  protocol  of  the  oral

18  and  19  April  1996,  page.  18.

hearing  on  18  and  19  April  1996,  page  81.

(320) At  paragraph  73  of  the  revised  statement  of  objections.
(321) British  Sugar’s  representations  during  the  oral  hearing  on

(362) In  English  in  the  original  text.
(363) Representation  by  Mr.  O’Hanlon,  protocol  of  the  oral

18  and  19  April  1996,  page  18.

(322) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  22.

(323) In  English  in  the  original  text.
(324) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  22.

(325) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  23.

(326) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  25.

(327) In  English  in  the  original  text.
(328) British Sugar’s representations in the oral hearing on 18 and

19  April  1996,  pages  18  and  19.

(329) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  27.

initial  statement  of  objections,

(330) See  the  Commission’s 
paragraphs  188  to  191.
(331) At  paragraphs  26  and  27.
(332) Tate & Lyle’s letter to the OFT dated 16 July 1990 (Annex
5  to  the  revised  statement  of  objections),  see  also  recital
139.

(333) See Mr Fowler’s statement at the oral hearing on 18 and 19

April  1996,  page  77.

(334) Transcript  of  the  investigations  at  Tate & Lyle  on  27  May
1994 (Annex 1 to the revised statement of objections) page
9.

(335) Tate & Lyle’s  written  reply  to  the  revised  statement  of
objections,  at  section  2,  paragraph  2.8,  with  reference  to
Tate & Lyle’s  letter  of  29  August  1990  of  the  OFT  (Annex
3  to  the  revised  statement  of  objections).

hearing  on  18  and  19  April  1996,  page  82.

(364) In  English  in  the  original  text.
(365) Napier  Brown  Decision,  see  footnote  25;  at  paragraph  10.
(366) See  also  recital  27.
(367) In  English  in  the  original  text.
(368) In  English  in  the  original  text.
(369) In  English  in  the  original  text.
(370) See  for  example:  Case  56/65,  Socie´te´ Technique  Minie`re
[1966]  ECR  235,  249;  Case  5/69,  Völk  v.  Vervaecke,
[1969]  ECR  295,  302,  paragraphs  5  to  7;  Case  T-77/92,
Parker  Pen  v.  Commission,  [1994]  ECR  II-549,  564,
paragraph  39,  Case  T-66/89,  Publishers  Association  v.
Commission,  [1992]  ECR  II-1995,  2016-2027,  paragraph
55.

(371) Parker  Pen  judgment,  see  footnote  370;  at  paragraph  40;
Case  99/79,  Lancôme  v.  ETOS,  [1980]  ECR  2511,  2536,
paragraph 24.

(372) Case  8/72,  Cementhandelaren  v.  Commission,  [1972]  ECR
977,  991,  paragraph  29;  Case  73/74,  Papiers  Peints  v.
Commission,  [1975]  ECR  1491,  1513,  paragraph  26.
(373) Case  246/86  Belasco  v.  Commission,  [1989]  ECR  2117,

2190  and  2191,  paragraphs  37  and  38.

(374) Case  T-35/92,  John  Deere  v.  Commission,  [1994]  ECR

II-957,  1009  and  1010,  paragraph  101.

(375) See  recitals  16  to  21  and  62  and  63  of  this  Decision.
(376) See  recital  65  of  this  Decision.
(377) See  recitals  16  and  17,  64  and  65  of  this  Decision.
(378) Cementhandelaren 

footnote  372;  at
paragraph 29; Papiers Peints judgment, see footnote 372; at
paragraph 26.

judgment, 

see 

(336) In  English  in  the  original  text.

(379) See  recital  15  of  this  Decision.

L  76/62

EN

Official  Journal  of  the  European  Communities

22.3.1999

(380) See  recitals  14  and  20  of  this  Decision.
(381) See  recital  17  of  this  Decision.
(382) At  section  4,  paragraph  9.
(383) In  English  in  the  original  text.
(384) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  143.

(385) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraphs  144  to  146.

(386) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraphs  158  to  161.

(387) British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  61.

(388) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  164.
(389) In  English  in  the  original  text.
(390) Tate & Lyle’s  written  reply  to  the  revised  statement  of

objections,  at  section  4,  paragraph  80.

(391) Napier  Brown’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  34.

(392) See  procotol  of  the  oral  hearing  on  18  and  19  April  1996,

at  page  67.

(393) In  English  in  the  original  text.
(394) The  figures  provided  by  Napier  Brown  in  Annex  A  to  its
written  reply  to  the  revised  statement  of  objections  show
that  in  the  calendar  years  from  1  January  1986  to  31
December  1990,  Napier  Brown’s  imports  of  white  sugar
into  the  UK  increased  by  60 %.

(395) See  protocol  of  the  oral  hearing  on  18  and  19  April  1996,

at  pages  67  and  68.

(396) James  Budgett’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  55.

(397) James  Budgett’s  written  reply  to  the  revised  statement  of
objections, at paragraphs 60 and 61. Figures stated in table
6  of  James  Budgett’s  response  to  the  original  statement  of
objections  and  in  Annex  4  of  its  response  to  the  revised
statement of objections. See also Budgett’s representation at
the  oral  hearing  on  18  and  19  April,  at  page  49.

(398) See  recitals  155  to  158  and  159  to  168  of  this  Decision.
(399) British  Sugar’s  written  reply  to  the  initial  statement  of

objections,  at  paragraph  61.

(400) British  Sugar’s  written  reply  to  the  revised  statement  of

objections,  at  paragraph  164.

(401) See  protocol  of  the  oral  hearing  on  18  and  19  April  1996,

page  32.

Interal 

(402) See  recitals  159  to  163,  167  and  168  of  this  Decision.
(403) Source: 

statistics  of  Directorate-General  VI
(Agriculture)  of  the  Commission,  as  cited  above  under
paragraph 14 and as reproduced in full (including the years
up to 1993/94) in British Sugar’s written reply to the initial
statement  of  objections,  as  Table  5  on  page  33  and  in  its
written  reply  to  the  revised  statement  of  objections,  as
Table  7  after  page  63.

(404) See  recitals  86  to  88  of  this  Decision.
(405) See  recitals  167  and  168  of  this  Decision.
(406) Case 22/78, Hugin v. Commission, [1979] ECR 1869, 1899

to  1901,  paragraphs  17  to  26.
(407) OJ  30,  20.4.1962,  p.  993/62.
(408) OJ  53,  1.7.1962,  p.  1571/62.
(409) Case  C-399/93,  Oude  Luttikhuis,  [1995]  ECR  I-4515,
4527,  paragraph  23;  Joined  Cases  T-70/92  and  T-71/92,
II-693,  745,
Florimex  v.  Commission, 
paragraph  152.

[1997]  ECR 

(410) OJ  L  177,  1.7.1981,  p.  4.
(411) OJ  L  159,  3.6.1998,  p.  38.
(412) Oude  Luttikhuis  judgment,  see  footnote  411;  at  paragraph

25.

(413) For the interpretation of the second sentence of Article 2(1)
in  the  light  of  its  genesis  and  the  reasons  on  which
Regulation  No  26  is  based,  see  Joined  Cases  C-319/93,
C-40/94 and C-224/94, Dijkstra, [1995] ECR I-4471, 4506
and  4507,  paragraphs  17  to  20.

(414) Tate & Lyle’s  written  reply  to  the  revised  statement  of
objections,  at  section  4,  paragraph  93.  See  also  recital  76.
(415) Case  19/77,  Miller  v.  Commission,  [1978]  ECR  131,  152,
paragraph  18;  Case  T-29/92,  SPO  v.  Commission,  [1995]
ECR  II-289,  402,  paragraphs  356  to  358;  Case  T-61/89,
Dansk  Pelsdyravlerforing,  [1992]  ECR  II-1931,  1991  and
1992,  paragraph  157;  Case  C-279/87,  Tipp-Ex  v.
Commission,  [1990]  ECR  I-261.

(416) See  recitals  65  and  161  of  this  Decision.
(417) See  recital  23  of  this  Decision.
(418) See  also  recitals  76  and  188  of  this  Decision.
(419) Suiker  Unie  judgment,  see  footnote  168.
(420) Suiker  Unie  judgment,  see  footnote  168,  at  paragraphs  13

to  17.

(421) Suiker  Unie  judgment,  see  footnote  168,  at  paragraph  24.
(422) Suiker  Unie  judgment,  see  footnote  168,  at  paragraphs  21

and  22.

(423) Commission  Decision  73/109/EEC  of  2  January  1973  in
Case  IV/26.918,  European  sugar  industry  (OJ  L  140,
26.5.1973,  p.  17).

(424) Suiker Unie judgment, seee footnote 168; at paragraphs 614

to  620.

(425) Suiker  Unie  judgment,  see  footnote  168,  at  paragraph

621.

(426) See  also  the  Opinion  of  Advocate-General  Cosmas  of  15
in  Case  C-235/92  P,  Montecatini  SpA  v.
July  1997 
Commission,  paragraph  48;  not  yet  published  in  the  ECR.

(427) See  in  particular  recitals  22  and  23,  72  to  74,  86  to  88.
(428) Napier Brown Decision, see footnote 25; paragraphs 10, 85

and  86.

(429) See  recitals  27,  150  and  151.
(430) The  Napier  Brown  procedure  started  with  a  formal
complaint  lodged  with  the  Commission  on  19  September
1980.

(431) Judgment of 21 February 1973, Case 6/72, Continental Can
v.  Commission,  [1973]  ECR  215,  244-245,  paragraph  25;
judgment  of  10  July  1990,  Case  T-51/89,  Tetra  Pak
Rausing  SA  v.  Commission,  [1990]  ECR  II-309,  356-357,
paragraph 22.

(432) OJ  C  207,  18.7.1996,  p.  4.
(433) British  Sugar’s  written  reply  to  the  revised  statement  of
objections,  at  paragraph  16  et  infra;  Tate & Lyle’s  written
reply  to  the  revised  statement  of  objections,  at  section  1(4)
et  infra;  Napier  Brown’s  written  reply  to  the  revised
statement  of  objections,  at  paragraph  5  et  infra;  James
the  revised  statement  of
to 
Budgett’s  written  reply 
objections,  at  paragraphs  3  to  5  et  infra.

(434) Tate & Lyle’s letter to the OFT dated 16 July 1990 (Annex

5  to  the  revised  statement  of  objections).

(435) Tate & Lyle’s  letter  of  29  August  1990  to  the  OFT  (Annex

3  to  the  revised  statement  of  objections).

(436) See  recital  212.