France: Court asks for clarification on produce associations

French competition authorities fined endive producer organizations and related associations almost 4 million euros in 2007 for anti-competitive practices, including working together to set the price of endives and agreeing the quantity of the vegetable to be placed onto the market.

However, the producers argued that they were only doing what was required of them under EU agricultural law, which tasks farmers with creating associations in order to stabilize prices and manage production against demand. Performing that task justified the practices, they said.

The French Court of Cassation has asked the Court of Justice of the EU (CJEU) to clarify the issue.

In a non-binding opinion in the case, advocate general Nils Wahl said that producers and associations do have the general objectives of adjusting production to account for demand, reducing production costs and stabilizing producer prices. In carrying out those tasks, they are effectively forums for collective concertation, he said.

On the exchange of strategic information, the advocate general said that the tasks assigned to the producers and associations necessarily involve exchanges of strategic information internally, with the result that the competition rules will generally not be applicable within a producer or association.

However, the communication of prices between producers, associations and other competing entities, cannot be linked to these tasks and are therefore subject to the principle of the prohibition of anti-competitive agreements, decisions and concerted practices.

Opinions of advocates general are not binding on the court, but are followed in the majority of cases.

Full Content: Out Law

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