PERIODS .
2 . MEASURES RELATING TO THE TRADE MARGINS , END-OF-YEAR REBATE AND MAXIMUM TERMS OF PAYMENT
( A ) TRADE MARGINS
106 AS IS APPARENT FROM THE DESCRIPTION OF THE CONTESTED MEASURES , ONE OF THEIR FEATURES IS THE AGREEMENT BY THE MANUFACTURERS OF TOBACCO PRODUCTS AS TO THE CLASSIFICATION OF THE WHOLESALE AND RETAIL TRADE AND AS TO THE CORRESPONDING TRADE MARGINS . THAT SYSTEM WAS MODIFIED BY THE FEDETAB RECOMMENDATION OF 1 DECEMBER 1975 ONLY TO THE EFFECT , AS THE COMMISSION POINTED OUT IN PARAGRAPH 97 OF THE CONTESTED DECISION , THAT THE RECOMMENDATION TAKES ACCOUNT OF THREE NEW CRITERIA FOR ESTABLISHING THE AMOUNT OF THE VARIOUS MARGINS , NAMELY THE ANNUAL SALES VOLUME , THE NUMBER OF BRANDS OFFERED AND THE NUMBER OF SALES OUTLETS SERVED . FURTHER , THE SYSTEM ESTABLISHED BY THE RECOMMENDATION IS CONFINED TO THE CIGARETTE SUB-SECTOR ALONE , WHEREAS THE MEASURES IN FORCE PREVIOUSLY APPLIED TO ALL MANUFACTURED TOBACCO PRODUCTS .
107 THE COMMISSION FOUND AT ARTICLES 1 AND 2 OF THE DECISION THAT THE CLASSIFICATION OF BELGIAN WHOLESALERS AND RETAILERS INTO CATEGORIES AND THE ALLOCATION TO THE LATTER OF DIFFERENT PROFIT MARGINS CONSTITUTES AN INFRINGEMENT OF ARTICLE 85 ( 1 ) OF THE TREATY . IT GIVES AS REASON FOR THAT FINDING ( PARAGRAPHS 81 AND 97 ) THAT THE SYSTEM CONSTITUTES A RESTRICTION ON COMPETITION BOTH FOR MANUFACTURERS AND FOR WHOLESALERS . IT DEPRIVES MANUFACTURERS OF THE OPPORTUNITY OF COMPETING INTER SE WITH REGARD TO PROFIT MARGINS AND WHOLESALERS WITH REGARD TO THE SERVICES THEY RENDER MANUFACTURERS . BOTH IN THE SYSTEM PRIOR TO 1 DECEMBER 1975 AND THAT ESTABLISHED BY THE RECOMMENDATION OF THAT DATE NO ACCOUNT IS TAKEN OF SERVICES , OTHER THAN THOSE BEARING ON THE CLASSIFICATION , WHICH INTERMEDIARIES MAY RENDER INDIVIDUALLY .
108 DURING THE PROCEEDINGS BEFORE THE COURT THE COMMISSION STRESSED THAT THE ESSENCE OF THE MEASURES IN QUESTION IS THE HORIZONTAL CONCERTED PRACTICE OF THE APPLICANTS REGARDING THE PROFIT MARGINS AND OTHER FINANCIAL ADVANTAGES WHICH THE MANUFACTURERS AND IMPORTERS ALLOW TRADERS . IN THE COMMISSION ' S VIEW TO MAKE THOSE MARGINS AND BONUSES UNIFORM IS STRICTLY EQUIVALENT TO AN AGREEMENT ON PRICES BETWEEN MANUFACTURERS AND IMPORTERS GOVERNING THE PRICE TO BE PAID FOR THE SERVICE OF INTERMEDIARIES . IT CONSTITUTES A SERIOUS BREACH OF THE COMPETITIVE SYSTEM INTENDED BY THE TREATY .
109 FROM THAT POINT OF VIEW IT IS NECESSARY TO CONSIDER WHETHER , IN SO FAR AS THE CONTESTED MEASURES RELATE TO TRADE MARGINS AND OTHER FINANCIAL BENEFITS , THEY HAVE AS THEIR OBJECT OR EFFECT , CONTRARY TO ARTICLE 85 ( 1 ) OF THE TREATY , THE PREVENTION , RESTRICTION OR APPRECIABLE DISTORTION OF COMPETITION IN THE SECTOR OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET .
GROUNDS CONTINUED UNDER DOC.NUM : 678J0209.1110 PRIMA FACIE IT APPEARS FROM THE ACTUAL SUBSTANCE OF THE CONTESTED MEASURES THAT THEIR OBJECT IS IN PARTICULAR TO EXCLUDE THE POSSIBILITY OF MANUFACTURERS AND IMPORTERS NEGOTIATING WITH WHOLESALERS INDIVIDUAL MARGINS