CELEX: 31976D0602
Language: en
Date: 1976-05-20 00:00:00
Title: 76/602/ECSC: Commission Decision of 20 May 1976 authorizing a joint buying agreement in respect of finished rolled steel products between the steel distribution undertakings C. Walker & Sons Ltd, J. Champion SA and NV A. Lommaert

No L 198/6                       Official Journal of the European Communities                                 23 . 7. 76
                                                          II
                                      (Acts whose publication is not obligatory)
                                              COMMISSION
                                             COMMISSION DECISION
                                                  of 20 May 1976
              authorizing a joint buying agreement in respect of finished rolled steel products
              between the steel distribution undertakings C. Walker & Sons Ltd, J. Champion SA
                                               and NV A. Lommaert
                                (Only the Dutch, English and French texts are authentic)
                                                   (76/602/ECSC)
 THE COMMISSION OF THE EUROPEAN                               Walker has the power to exercise control within the
 COMMUNITIES,                                                  meaning of Decision 24/54 over the following steel
                                                              stockholders :
Having regard to the Treaty establishing the European
 Coal and Steel Community, and in particular
Article 65 thereof,                                                            Firm                     Locality
Having regard to the application from the firms                C. Walker & Sons (Ireland) Ltd    United Kingdom
 concerned dated 21 November 1974,                             Padley Stainless Steels Ltd      United Kingdom
Whereas :                                                     Mersey Steels Ltd                 United Kingdom
                                                              Martin Hall Ltd                   United Kingdom
                                                              Martin Hall Steel Tubes Ltd       United Kingdom
                           I
                                                              Martin Hall (London) Ltd          United Kingdom
On 21 November 1974 three steel distribution under­           Harrowmills Ltd                   United Kingdom
takings within the meaning of Article 80 of the               Slough Tubes Ltd                  United Kingdom
Treaty :                                                      Dublin Steel Stockholders Ltd     Ireland
                                                              Shamrock Steel Services Ltd       Ireland
C. Walker & Sons Ltd, Blackburn, United Kingdom
(Walker); Ets Metallurgiques J. Champion SA,
Nanterre, France ( Champion); and NV Algemene
Handelsmaatschappij A. Lommaert, Schoten, Belgium
(Lommaert);
                                                              These undertakings form the Walker Group, whose
                                                              consolidated turnover in 1974 totalled £ 41 418 627.
applied to the Commission of the European Communi­
ties for authorization under Article 65 (2) of the
Treaty of a joint steel buying arrangement between
them .                                                        Champion is a French limited liability company with
                                                              a capital of FF 12 million ; it is in business as a
Walker is a United Kingdom steel stockholder with             stockholder for all steel products ; 98% of its capital
a share capital of £350 000, held entirely by members         is held by members of the Champion family, and its
of the Walker family.                                         1974 turnover totalled FF 311 058 000 .
 ---pagebreak--- 23 . 7. 76                           Official Journal of the European Communities                          No L 198 /7
Lommaert, a Belgium limited liability company in                Each of the firms involved will remain free to deter­
business as a steel stockholder, has a capital of Bfrs          mine :
35 million, all held by members of the Lommaert
family.                                                         — sales prices,
                                                                — outlets,
Lommaert has the power to exercise direct or indirect
control over the following steel stockholders :                 — product range,
                                                                — customer selection,
                  Firm                      Locality
                                                                — quality of after-sales service,
A. Lommaert NV Algemene
Handelsmaatschappij, Lanaken        Belgium                     — technical developments,
Anciens Etablissements Leduc SA,
Liège                               Belgium                     — business expansion,
BV Ijzerhandel v/h A. Lommaert,
Born                                Netherlands                — investment programmes.
BV Ijzerhandel v/h A. Lommaert,
The Hague                           Netherlands
H. Heutappel BV, Maastricht                                     The agreement was concluded for five years from
                                    Netherlands
                                                                1 January 1975 and may be renewed if all three
Eisen- und Stahlgroßhandel                                      parties so agree.
Dr. Ing. A. Schneider GmbH,         Federal Republic
Heidelberg                          of Germany
Eisen- und Stahlgroßhandel
Dr. Ing. A. Schneider GmbH,         Federal Republic
Düsseldorf                          of Germany
                                                                                             II
                                                                The agreement "restricts the normal play of competi­
These undertakings form the Lommaert Group, whose               tion since the joint buying of finished and end rolled
consolidated       turnover   in   1974   totalled   Bfrs       steel products to be taken into stock will enable the
2 978 313 000.                                                  firms involved to obtain identical prices and terms of
                                                                delivery, more favourable than those which they
                                                                would have obtained individually.
On 1 January 1975 these undertakings entered into
a cooperation agreement, the main points being:
                                                               The agreement also distorts the normal play of
— the parties will pool their buying of finished and            competition since the firms involved will regularly
     end rolled steel products once the necessary              be exchanging commercial, technical, financial and
     facilities have been set up ;                              administrative information, notably market research,
                                                               statistics on and analyses of current economic trends,
                                                                management information and knowhow, technical
— they will regularly exchange commercial, technical,           knowhow and research and development findings.
     financial and administrative information, notably:
    — market research,
                                                               Although these last-mentioned cooperation measures
    — statistics on and analyses of current economic           taken individually would not be anticompetitive for
         trends,                                               purposes of the 'Notice on agreements, decisions
                                                                and concerted practices concerning cooperation
     — management information and knowhow,                     between undertakings' (*) and would therefore not be
                                                               caught by Article 65 (1 ), their cumulative effect will
    — technical knowhow, and research and devel­
         opment findings;
— they will encourage as far as possible staff                 (*) OJ No C 75, 29. 7. 1968, p. 3 ; Corrigendum in OJ
    exchanges and joint advertising;                               No C 84, 28. 8. 1968, p. 14.
 ---pagebreak---   No L 198 /8                          Official Journal of the European Communities                              23 . 7. 76
 be to make the firms involved cooperate on a broader             Joint buying will enable these firms :
 front and then coordinate their activities beyond joint
 buying, so that they are likely to align their market
 conduct as suppliers.                                            — to place joint orders for steel products to be taken
                                                                       into stock, so that they can avoid surcharges on
                                                                      small orders and qualify for quantity discounts ;
 This agreement, whose purpose is to give the parties
 a substantially stronger market position vis-a-vis their         — to make a substantial improvement in their
 suppliers and a substantially better competitive                     supplies and extend their product range by giving
 position than they would have on their own in                        them access to each other's traditional suppliers;
 conditions of normal competition, is therefore caught
 by the prohibition in Article 65 ( 1 ) of the Treaty.
                                                                  — to be sure of continuous and faster supplies of
                                                                       products from other Community countries;
                              III                                 — to rationalize their buying and thus reduce costs
                                                                      so as to step up their efficiency and competi­
                                                                      tiveness on a broader market.
 Specialization agreements or joint buying or joint
 selling agreements in respect of particular products
 may be authorized if the Commission finds that they              Joint buying by Walker, Champion and Lommaert
 satisfy the tests of Article 65 (2).                             will thus make for a substantial improvement in the
                                                                  distribution of steel products.
 The agreement in question may be authorized under
Article 65 (2) if it makes for a substantial improve­            These results could not be obtained on the same
 ment in the production or distribution of the relevant           scale if each of the firms individually bought the
products, is essential in order to achieve these results         steel it needed. The agreements impose no restrictions
 and is not more restrictive than is necessary for that           as regards pricing, selection of customers or outlets,
 purpose. The agreement must not be such as to give              business expansion or investment programmes, where,
 the undertakings concerned the power to determine               each firm remains completely free. It can therefore
the prices, or to control or restrict the production or          be concluded that the agreement is not more restric­
 marketing, of a substantial part of the products in              tive than its purpose requires .
 question within the common market, or to shield
them against effective competition from other under­
 takings within the common market.
                                                                 The agreement thus satisfies the tests of Article 65 (2),
                                                                  (a) and (b).
                              IV
                                                                                              V
Walker, Champion and Lommaert are all steel
distributors and generally supply small and medium
firms within 80 or 100 kilometres of their depots ;
and these firms find it advantageous to be in close              In the assessment of the market shares held by the
                                                                 firms concerned, account should be taken of the
contact with their suppliers .
                                                                 peculiar features of the stockholder market, where
                                                                 there are geographic limits depending on the location
                                                                 of depots. The firms concerned have their registered
The geographical location of the depots of the parties           offices and main depots in three separate Community
to the agreement and their subsidiaries will enable              countries. There is therefore no point in seeking a
them to supply users in the Benelux countries, Ireland,          relevant market covering them all ; each should be
the United Kingdom, the northern half of France and              considered in relation to the market covered from its
part of Germany.                                                 depots.
 ---pagebreak--- 23 . 7. 76                          Official Journal of the European Communities                         No L 198/9
Walker's share of the United Kingdom stockholder               HAS ADOPTED THIS DECISION:
market may be estimated at 5% in 1974, when
Champion held approximately 4% of the French
market and Lommaert 6% of the combined Belgian                                         Article 1
and Dutch markets . These are thus medium-sized
firms . Each of them on its own market has to face             The joint buying agreement in respect of steel
competition not only from large numbers of local or            products to be taken into stock entered into on
regional iron and steel dealers but also from dealers          1 January 1975 between the following steel distri­
under the control of the manufacturing firms, some of          bution undertakings :
them holding market shares three or four times as
large.                                                         C. Walker and Sons Ltd, Blackburn, United Kingdom;
                                                               Ets Metallurgiques J. Champion SA, Nanterre, France;
The agreement at issue is accordingly not liable to            and NV AlgemeneHandelsmaatschappij A. Lommaert,
give the undertakings concerned the power to deter­            Schoten, Belgium ; is hereby authorized.
mine the prices, or to control or restrict the pro­
duction or marketing of a substantial part of the
steel products sold in the common market, or to                                        Article 2
shield them against effective competition from other
undertakings within the. common market. It thus                The said undertakings shall without delay inform the
satisfies the tests of Article 65 (2) (c) of the Treaty.       Commission of any change or addition to or extension
                                                               of the agreement, and effect shall not be given to
                                                               any such change, addition or extension until the
                            VI                                 Commission has confirmed that it is consistent with
                                                               the authorization given by this Decision or has
The Commission must ensure that any arrangements               authorized it under Article 65 (2).
 made by the firms involved under " the joint buying
 agreement are consistent with the authorization given
 by this Decision and with the Treaty.                                                 Article 3
Walker, Champion and Lommaert must therefore be                This Decision is addressed to the undertakings named
 required to inform the Commission without delay               in Article 1 .
 of any change or addition to or extension of the
 agreement, and effect must not be given to any such
 change, addition or extension until the Commission
 has declared it admissible or has authorized it under         Done at Brussels, 20 May 1976.
 Article 65 (2) of the Treaty.
 The agreement which the Commission is asked to                                              For the Commission
 authorize satisfies the requirements of Article 65 (2)                                        A. BORSCHETTE
 and is consistent with the other provisions of the
 Treaty,                                                                                Member of the Commission