COMMITMENT BY EACH OF THE PARTIES TO REFRAIN , FOR THE DURATION OF THE AGREEMENT , FROM THE MANUFACTURE OF CERTAIN PRODUCTS IN ORDER TO ENTRUST IT TO ITS PARTNER , BUT ONLY THE UNILATERAL COMMITMENT BY PRYM TO CEASE ITS PRODUCTION OF NEEDLES AND TRANSFER IT TO BEKA .
NEVERTHELESS , THE CONCENTRATION OF MANUFACTURING AGREED ON BY PRYM AND BEKA HAS , FROM THE POINT OF VIEW OF THE IMPROVEMENT OF PRODUCTION , FAVOURABLE EFFECTS ANALOGOUS TO THOSE OF SPECIALIZATION ; IT CAUSES AN INCREASE OF AT LEAST 50 PER CENT IN THE QUANTITY OF NEEDLES TO BE MANUFACTURED IN THE EUPEN FACTORY , WHICH MAKES IT POSSIBLE TO MAKE MORE INTENSIVE USE OF THE EXISTING PLANT AND TO INTRODUCE PRODUCTION-LINE MANUFACTURE .
THIS RATIONALIZATION OF PRODUCTION HAS IN PARTICULAR MADE IT POSSIBLE TO REDUCE THE VERY LARGE PROPORTION OF LABOUR COSTS IN THE PRODUCER'S COST PRICE . THE PRODUCER'S COST PRICE OF " STANDARD " QUALITY NEEDLES , WHICH FEEL BY SOME 20 PER CENT IN 1970 AFTER THE CONCENTRATION OF PRODUCTION AT EUPEN , WAS STILL LOWER AT THE END OF 1972 THAN IN 1969 IN SPITE OF THE INCREASES IN WAGES AND IN THE COST OF RAW MATERIALS WHICH HAD OCCURRED DURING THOSE FOUR YEARS . THE INTRODUCTION OF MECHANIZED PRODUCTION-LINE MANUFACTURE WITH INCREASED PRODUCTIVE CAPACITY ALSO MAKES IT POSSIBLE TO MANUFACTURE ARTICLES OF A MORE EVEN QUALITY .
2 . THE AGREEMENT ALLOWS CONSUMERS A FAIR SHARE OF THE BENEFIT RESULTING FROM IT , AS IT MUST BE SUPPOSED THAT BECAUSE OF THE PRESSURE OF COMPETITION EXISTING ON THE NEEDLE MARKET THE ADVANTAGES RESULTING FROM RATIONALIZATION WILL BE PASSED ON TO CONSUMERS .
3 . THE AGREEMENT DOES NOT CONTAIN RESTRICTIONS WHICH ARE NOT INDISPENSABLE TO THE ATTAINMENT OF THE SAID ADVANTAGES . THE FAVOURABLE EFFECTS OF THE AGREEMENT ARE DUE ESSENTIALLY TO THE IMPROVEMENT IN PRODUCTIVITY RESULTING FROM A MORE INTENSIVE UTILIZATION OF PRODUCTIVE CAPACITY , AND THAT MORE INTENSIVE UTILIZATION IS ONLY POSSIBLE IF THE QUANTITIES OF NEEDLES TO BE MANUFACTURED ARE , AND ARE TO REMAIN , CONSIDERABLY LARGER THAN BEFORE . THAT BEING SO , IT IS ESSENTIAL THAT PRYM SHOULD ENTER INTO A COMMITMENT FOR A LONG PERIOD , NOT ONLY TO CEASE MANUFACTURE , BUT ALSO TO PURCHASE ALL ITS REQUIREMENTS OF NEEDLES FOR DOMESTIC SEWING MACHINES FROM BEKA , SO AS TO PROVIDE A GUARANTEE FOR AN INCREASED OUTPUT BY THE LATTER .
THE LONG-TERM COMMITMENT BY PRYM TO OBTAIN ITS SUPPLIES EXCLUSIVELY FROM BEKA THUS REPRESENTS AN INDISPENSABLE RESTRICTION IF THE FAVOURABLE EFFECTS OF THE AGREEMENTS ARE TO BE ACHIEVED AND , MOREOVER , MAINTAINED . THAT COMMITMENT , MOREOVER , DOES NOT GO BEYOND WHAT IS STRICTLY NECESSARY , SINCE IT ALLOWS PRYM THE POSSIBILITY , IN THE EVENT OF BEKA BEING UNABLE TO MEET ITS COMMITMENTS , OF BUYING FROM OTHER SOURCES AND SINCE , IN ANY CASE , PRYM GETS THE BENEFIT OF PREFERENTIAL PRICES .
4 . THE AGREEMENT DOES NOT AFFORD