C-47/76

JUDGMENT OF THE COURT 1 FEBRUARY 1977 1

Alexis de Norre and his wife Martine, née de Clercq v NV Brouwerij Concordia (preliminary ruling requested by the Hof van Beroep of Ghent)

Case 47/76

1. Competition — Agreements — Exclusive purchase agreements concluded between two undertakings in a single Member State — Characteristics set out in Article 3 of Regulation No 67/67 — Absence — Adverse effect on trade between Member States — Prohibition — Exemption by category (Regulation No 67/67 of the Commission, Article 1 (2))

2. Competition — Network of agreements — Cumulative effect — Regulation No 67/67 — Applicability

1. Agreements to which only two they would fall under the prohibition undertakings from one Member State contained in Article 85 (1) of the EEC only are party, under which one party Treaty. agrees with the other to purchase only 2. Neither the spirit nor the objectives of from that other certain goods for Regulation No 67/67 are opposed to resale and which do not display the the applicability of that regulation to features set out in Article 3 of agreements which fall under the Regulation No 67/67 of the prohibition contained in Article 85 Commission, qualify for the only because of the cumulative effect exemption by category provided for in produced by the existence of one or that regulation if, failing exemption, more networks of similar agreements.

JUDGMENT OF 1. 2. 1977 —CASE 47/76

on the interpretation of Article 85 of the said Treaty, Article 4 (2) (1) of Regulation No 17 of the Council of 6 February 1962 ('First Regulation implementing Articles 85 and 86 of the Treaty', OJ English Special Edition 1959-1962, p. 87) and Regulation No 67/67 EEC of the Commission of 22 March 1967 on the application of Article 85 (3) of the Treaty to certain categories of exclusive dealing agreements (OJ English Special Edition 1967, p. 10),

THE COURT

composed of: H. Kutscher, President, A.M. Donner and P. Pescatore, Presidents of Chambers, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

Advocate-General: H. Mayras Registrar: A. Van Houtte

gives the following

provisions of the contract of 1966], all 3. May the said agreements be regarded the conditions of which contract the as not being subject to the duty to purchasers . . . declare that they have notify, pursuant to Article 4 (2) (1) of taken over in so far as those conditions Regulation No 17/62 of the Council, are still in force'. although in fact they amount to a direct prohibition on imports in Since Mr and Mrs de Norre sold respect of one of the parties? beverages in the cafe other than those of 4. Can a relatively unimportant exclusive Concordia, the latter brought dealing agreement, to which Article proceedings before the Oudenaarde 85 (1) could only be applicable on Court of First Instance with, by account of the cumulative effect of all interlocutory judgment of 18 October agreements of the same type, avoid 1973, ordered the said spouses to pay on annulment pursuant to Article 85 (2), account to Concordia, as damages, FB and if so, according to which criteria? 25 000, reserving its final decision on the 5. Are the national courts under a duty amount of damages. to suspend proceedings where exemption pursuant to Article 85 (3) Mr and Mrs de Norre lodged an appeal is possible? against this judgment before the Hof van If the suspension of proceedings Beroep, Ghent, contending, inter alia, merely constitutes an option, is the that they were not bound by the national court permitted, in its contested contract because it was consideration of Article 85, to decide prohibited and void under Article 85 of that Article 85 (3) is not applicable? the EEC Treaty; in support of this 6. Should a new agreement, the fate of contention they relied on the case-law of which is not immediately settled, be the Court of Justice and an inquiry regarded as provisionally void or instituted by the Commission of the provisionally valid?

General 2. May it be deduced by analogy with the judgment in Fonderies de Roubaix that the exemption by Since the terms of the contested contract category laid down by Regulation No are in general use in the brewing 67/67 of the Commission is industry, the possibility cannot be applicable to all exclusive dealing excluded that, taken as a whole, contracts agreements of the type at issue, of this kind have a significant adverse concluded between undertakings in a effect on competition and intra-Com single Member State? munity trade.

Question 1 courts are merely empowered to stay the proceedings or whether they are under a In its judgment of 12 December 1967 in duty to do so except in cases where the De Haecht (Case 23/67 hereinafter adverse effect on competition and on referred to as 'Haecht I'), the Court held trade between Member States is not that, in order to assess whether a contract appreciable or where the application of such as that in the present case is caught Article 85 is not in doubt. In this latter by the prohibition contained in Article eventuality, the question arises whether 85 (1) of the Treaty, 'the existence of the said courts can assume the right to similar contracts is a circumstances find against the applicability of Article which, together with others', must be 85 (3). taken into account (ibid. 416). It is desirable that the 'other' circumstances Question 6 referred to by the Court should be identified. The judgment of the Court of 6 February 1973 in Case 48/72 ('Haecht II' [1973] Question 2 ECR 77) does not give a clear answer to this question. Legal opinion is divided In the light of the judgment of the between the alternative of provisional Court of 3 February 1976 in nullity and that of provisional validity. If Roubaix-Wattrelos (Case 63/75 [1976] the latter alternative were correct it ECR 111), the questions arises whether would be further necessary to ascertain, contracts of the type in question are first, whether this constitutes full covered. by the exemption provided provisional validity within the meaning for by Regulation No 67/67, of the judgment of the Court of 9 July notwithstanding the fact that, as a 1969 (Portelange v Marchant, Case general rule, they define no area within 10/69 [1969] ECR 309) or whether, in the the meaning of Article 1 (1) of the light of the Haecht II judgment, the regulation. parties must be regarded as being entitled to carry out the agreement as Question 3 they wish, but not to call for its enforcement and, secondly, whether the It is settled law that exclusive dealing national courts are or are not empowered agreements between undertakings in the to adopt temporary measures in the same Member State are exempt from the meantime. obligation to notify so long as their execution does not require the goods in question to cross national frontiers. Question 7 Nevertheless, the question arises whether this decision continues to apply where The Belgian legislature has moderated the effect of such a contract is directly to the unduly stringent provisions prohibit one of the parties to effect frequently included by brewers and beer imports from other Member States. merchants in contracts of the type in question. Thus, under the Royal Decree Question 4 of 25 September 1964, which applies in the present case, the penalties provided Legal opinion appears to be undecided for in these agreements in case of an on this point. infringement followed by a breach of the contract may not exceed 25 % of the Question 5 amount of the loan multiplied by the number of years still to run from the The question arises whether, in the dissolution of the contract to its agreed circumstances referred to, the national term, subject to a maximum of 100 %.

II — Written observations sub­ The structure of the industry in question mitted before the Court differs appreciably from one State to another both on the production and on General the consumption side. The Commission describes in detail the position in each Concordia states that, in Belgium, Member State; in the case of Belgium, it brewery contracts have been the subject draws particular attention to the facts of a series of Royal Decrees. By virtue of that:

A statistical table submitted by the Nevertheless, these decisions did not Commission shows that the trade in beer settle all the issues raised in the present between the Member States is limited. case, which is to be distinguished from This is first of all due to certain obstacles BRTv Sabam in that: of a 'technical' nature (differences — the present case is concerned with between the quality standards imposed establishing the view to be taken by by each Member State, etc.) which, the national court when a procedure however, are not insurmountable. But the for the grant of an exemption (based basic reason is the fact that a large therefore on Article 6 of Regulation number of establishments in the 'Horeca' No 17) can still be or has already sector, in fact, the more important of been set in motion; on the other them, are either bound by exclusive hand, the judgment in BRT\ Sabam purchase contracts to breweries in their was concerned only with the case respective countries or are actually owned where a procedure has been initiated by such breweries. In these pursuant to Article 3 of the circumstances, producers who wish to regulation and therefore with a view enter the market in another Member to the adoption of a finding that State have either to create new sales there has been an infringement of outlets, which calls for substantial Article 85 or 86; investment, or, the most common — the questions put by the Hof van solution, to associate with their local Beroep, Ghent, are concerned with competitors in their attempts to individual contracts which, in penetrate the market by way of a themselves, are not caught by the partnership or 'joint venture', which provisions of Article 85 (1) but which considerably reduces the competitive fall under the prohibition contained impact of the operation. in that article on account of the cumulative effect of the networks of Some general issues raised by the exclusive agreements existing in the questions submitted industry concerned.

help the national courts in reviewing — that neither this condition, nor the them. condition that the agreement should have the effect of obstructing To date, the Commission has not yet set competition, is fulfilled when the in motion a procedure either against agreement 'has only an insignificant Concordia or against other breweries, effect on the market, taking into Belgian or otherwise, which have made account the weak position which the agreements of the type in question. persons concerned have on the During the period 1970 to 1972 it market of the product in question'. conducted an inquiry into the brewing industry and eventually adopted a It may be concluded from this that decision requiring certain undertakings where, as in the present case, a single to supply information (JO L 161 of 19. 7. local agreement is not such as by its 1971, from p. 2).

It is, accordingly, agreements. important to make it clear at once that, according to recent decisions of the In these circumstances the Commission Court, proof of the restrictive effect on can only adopt a theoretical approach to competition in such a market, which the questions raised. Although it is presupposes the delineation of the prepared to indicate certain quantitative market in the products in question, and limitations, they cannot have any of the effect on trade between Member absolute value and must be regarded as States must be furnished on the basis of no more than pointers. concrete and well-established factors of law and of fact (judgment of 14 May First question 1975 in Kali, Joined Cases 19 and 20/74 [1975] ECR 499; judgment of 15 May Concordia states that this question can 1975 in Frubo, Case 71/74 [1975] ECR be answered by reference to previous 563; and judgment of 26 November 1975 decisions of the Court, in particular the in Papiers Peints, Case 73/74 [1975] ECR judgment of 9 July 1969 in Völk v 1491). Vervaecke (Case 5/69 [1969] ECR 295) in which it was held (in grounds Nos, 5 to 7 The salient features of the production of the judgment, ibid., p. 302) and sale of beer in Belgium are indicated — that, for an agreement to be capable by the following information: of affecting trade between Member — It appears that, in Belgium and States it must be possible to foresee Luxembourg, there are about 200 with a sufficient degree of probability breweries, comprising large, medium- on the basis of a set of objective size and small-scale undertakings. factors of law or of fact that the Concordia's share of the market agreement in question may have an amounts to 0.48 % of national output influence, direct or indirect, actual or and that of the largest Belgian group potential, on the pattern of trade amounts to just 35 %.

JUDGMENT OF 1. 2. 1977 —CASE 47/76

cafe owners and restaurant proprietors — on the other hand, certain factors who are not bound by agreements or that extraneous to the contracts in supply contracts increase the question taken as a whole, such as competitiveness of brewers whose the possible existence of non­ business is mainly local; or if the facts exclusive brewery agreements and are that, taking account of factors which their consequences; non-contractual have a restrictive effect, such as conditions concerning retail sales; differences in national laws, consumer agreements concluded at the habits, customs, and high transport costs, production and wholesale stages; the Belgian trade with other Member States structure of undertakings and their is maintained at a reasonable level or is position on the market; the type and even increasing, or that supply contracts volume of supply and demand, prices, are a means of entering the market in transport, state of national legislation other Member States, there is no reason etc.

to suppose that an isolated exclusive purchase agreement at national level is As regards, in particular, the cumulative caught by the prohibition contained in effect of agreements of the same kind, Article 85(1). the date on which they were concluded

DE NORRE v BROUWERIJ CONCORDIA

In each case there is a considerations. noticeable reduction in both the number and the commercial attraction of the The Commission states that the sales outlets which are free to choose additional criteria referred to in the their suppliers. This impedes not only present question are of two kinds, one the penetration of the market by quantitative and the other qualitative. suppliers from other Member States but also the extension of that part of the Quantitative aspect market which belongs to undertakings already established there. In order to assess the cumulative effect of brewery contracts, it is first necessary to Accordingly, in respect of the present define the market affected by it. In the case, the conclusion is inevitable that the Commission's view, these contracts must exclusive network formed by Concordia be viewed in a somewhat restricted has an effect on the Belgian market, the context, which is to say, limited not only character of which is indicated by the to beer to the exclusion of other information set out above and, moreover, beverages (alcoholic or otherwise), but by the fact that approximately 65 % of more specifically to retailers operating in the national output, that is to say almost the 'Horeca' sector and therefore to the 9 000 000 hl, is disposed of under exclusion, in particular, of grocers and exclusive agreements.

The probability becomes a beer sold by the glass in the 'Horeca' virtual certainty when, in a given market, sector is markedly dearer than that there are several large-scale networks. intended for domestic consumption; and so on. On the other hand, it seems reasonable to take a more favourable view of small Again, the market to be taken into networks created by fairly small-scale account must also be defined in producers. The Court has laid down the

agreement and the turnover achieved by competition, which might occur if, by the contracting undertakings, laid down means of appropriate price reductions, under paragraph II of the Notification of which might be incompatible with the Commission concerning agreements Article 86, the large breweries of minor importance (JO C 64 of 2. 6. endeavoured to eliminate the small-scale

1970, p. 1) seem scarcely applicable in undertakings operating in the same this industry. In view of the fact that industry. It would be better to avoid such there are, in Germany, a very large a situation by a reasonable application of number of small-scale breweries, to apply Article 85. these criteria in that Member State would mean that a very high proportion of To sum up, the Commission proposes brewery contracts would not be caught that the answer should be as follows: by the prohibition contained in Article 85 although, taken as a whole, the The application of Article 85(1) of the breweries concerned take a substantial EEC Treaty to exclusive purchase share of the market. For reasons which agreements concluded between an the Commission sets out in detail, the undertaking producing, importing or most acceptable solution would be to engaged in the wholesale distribution of retain, subject to exceptions in one beer and undertakings selling draught direction or another, the principle that beer requires an appraisal of the extent to a network of exclusive purchase which access to the demand from these agreements does not fall under Article 85 latter undertakings remains free. so long as it covers transactions involving no more than an aggregate of 100 000 hl In this connexion, account must be of beer. taken of the extent of the networks of agreements of the same nature and the Qualitative aspect stringency of the conditions laying down the exclusive rights and obligations. The effect of agreements of the type in dispute depends also on the nature of the In cases where one or more large relationships which they create: the networks of exclusive contracts have

deprived a supplier of freedom of choice (2) is thus to exclude from the scope of regarding access to a substantial part of Article 85 (1) and, therefore, from the demand involved, certain networks of Regulation No 67/67, exclusive dealing secondary importance may not be caught agreements which are purely domestic by the prohibition contained in Article in nature and are not capable of 85(1). significantly affecting trade between Member States' but that the purpose of Assessment of these factors in actual the said paragraph (2) 'is not to exclude cases must be carried out in the light of from the benefit of the exemption by the practice followed by the Commission categories those agreements which, in its decisions or of other information of although concluded between two comparable weight supplied by that undertakings from one Member State, institution, subject to review by the Court may nevertheless by way of exception of Justice. significantly affect trade between Member States but which, in addition, Second question satisfy all the conditions laid down in This question is, in Concordia's view, of Article 1 of Regulation No 67/67'. It paramount importance because, if it is would, accordingly, be unreasonable to answered in the affirmative, there is no withhold the benefit of exemption by need to answer the other questions. categories from an agreement solely on the ground that, in principle, such an In order to determine whether contracts agreement is not capable of significantly such as that under consideration qualify affecting trade between Member States. for the exemption by categories provided for in Regulation No 67/67, reference The court making the reference was must be made to the first and second wrong to entertain doubts concerning the paragraphs of Article 1 of the regulation. applicability of the exemption to Under the said paragraph (1) (b) as contracts of the contested type when it amended by Regulation No 2591/72 of referred to the provision in Article 1 (1) the Commission of 8 December 1972 (a) of Regulation No 67/67, which covers (OJ English Special Edition 1972 (9 to agreements granting exclusive sales 28 December), p. 7) 'until 31 December concessions and makes their exemption 1982 Article 85 (1) of the Treaty shall not subject to the condition that they have apply to agreements to which only two 'defined' the area of the common market undertakings are party and whereby ... within which resale can and must take

The disputed contract was concluded at a Finally, the Belgian Government suggests date before Regulation No 67/67 came that the answer should be as follows: into force. The notification of exclusive dealing agreements was at that time Subject to the fulfilment of the governed by Article 4 (2) (a) of conditions laid down in Regulation No Regulation No 27 of the Commission of 67/67, the exemption by categories for 3 May 1962 (OJ English Special Edition which it provides is applicable to all 1959 to 1962, p. 132), which was inserted exclusive purchase agreements concluded into the regulation pursuant to in the brewing industry between two Regulation No 153 of the Commission undertakings from the same Member of 21 December 1962 (JO 1962, p. 2918) State and which may by way of exception and provided for a simpler method of significantly affect trade between notification. Paragraph (2) (a), which was Member States. Such exemption does rendered otiose by the entry into force of not, therefore, apply to brewery Regulation No 67/67, was repealed by agreements having a purely national Article 7 of that regulation. The effect of character, nor does it apply to other Article 4 (2) of Regulation No 67/67 is brewery agreements which do not satisfy that the exemption by categories laid the conditions required by the said down in Article 1 of that regulation 'shall Regulation No 67/67, even though both have retroactive effect' in respect of cases involve agreements concluded agreements concluded between 13 March between two undertakings from the same 1962 and the date of the entry into force Member State.

DE NORRE v BROUWERIJ CONCORDIA

Finally, brewery agreements frequently Either

contain oppressive clauses which are — it wished to draw attention to the tact

more restrictive than is necessary for the that an undertaking such as that attainment of objectives capable of involved here necessarily means that justifying exemption by categories, with the cafe proprietor concerned cannot the result that exemption by categories obtain his supplies from breweries cannot be applied to them, despite the established in other Member States. fact that Article 2 of Regulation No This situation is the same as that in 67/67 contains nothing which enables the Bilger case, which means that, in the benefit of such exemption to be giving the interpretation which has withheld from those clauses on the basis just been quoted, the Court certainly of the application, by analogy, of that took this circumstance into account; article. or

JUDGMENT OF 1. 2. 1977 —CASE 47/76

p. 120, paragraph (1) of the operative in accordance with Article 4 (2) of part of the judgment). Regulation No 17.

requirements of Articles 4 and 5 thereof, they were exempted en bloc on account However, when an agreement, harmless of its entry into force. in itself, is, exceptionally, caught by the prohibition owing to the cumulative In these circumstances the reply should effect produced by other agreements of be as follows: the same kind, the automatic application of the said paragraph (2) has an effect Only those brewery agreements, which is arbitrary and, in any case, concluded between two undertakings, unsatisfactory. which are purely national in character, that is to say, agreements between, on the When the number of 'tied' retailers in a one hand, a producer or supplier of Member State reaches a certain level the home-produced beer and, on the other question arises whether all contracts hand, a retailer established in the same subsequently entered into are Member State, for the resale of beer in automatically null and void or whether, that State, are not required to be notified in those circumstances, certain contracts

DE NORRE v BROUWERIJ CONCORDIA

concluded earlier, for example, the more which do not relate to imports or exports important ones (whatever meaning but which, owing to their cumulative should be given to those words), are effect, significantly affect trade between thereby suddenly rendered nugatory. Member States and competition.

agreements referred to in the said this question is contained in the Government's comments on the first comments made on the first. Only question and not, therefore, by taking agreements which form part of a account only of the agreement involved small-scale network avoid being caught in each case under review and of other by Article 85 (1). agreements 'of the same type'. If, however, the combined effect of all In so far as, owing to their cumulative the existing networks is to restrict access effect, all these agreements are caught by to the market to a certain extent, Article 85 (1), fairness demands that they anything which further aggravates this should be the subject of a single decision. situation, even only slightly, is caught by Because of the structure of Community the prohibition. regulations this is not, however, always feasible, with the result that, on occasion, Similarly, it is not possible, in the big it is justifiable to take decisions in networks, to draw a distinction between individual cases pursuant to Article 85 (3) contracts according to the extent to and as the result of a notification. This which each contributes towards applies in cases involving agreements restricting access to the market. 'The

JUDGMENT OF I. 2. 1977 —CASE 47/76

In fact the cause to suspend proceedings in cumulative effect of exclusive agreements order to allow the parties to obtain largely arises from the industrial power of the Commission's standpoint, unless the big breweries which are parties to the it establishes either that the agreements in question. This industrial agreement does not have any power is the very reason why the perceptible effect on competition or networks of agreements are, individually trade between Member States or that and collectively, so influential and there is no doubt that the agreement important.

judgment. Nevertheless, if the Commission initiates a procedure in In the light of these observations the application of Article 3 of Regulation Commission suggests that the answer No 17 such a court may, if it should be as follows: considers it necessary for reasons of legal certainty, stay the proceedings The validity of the agreements referred to before it while awaiting the outcome in the first question, which in themselves of the Commission's action. On the are of minor importance, depends on the other hand, the national court should validity of the network of which they generally allow proceedings before it form part. to continue when it decides either that the behaviour in dispute is Fifth question clearly not capable of having any appreciable effect on competition or Concordia relies on previous decisions of on trade between Member States, or the Court to the following effect: that there is no doubt of the (as regards agreements made after 13 May incompatibility of that behaviour 1962) with Article 86' (judgment in BRT-I, — 'whilst the principle of legal loc. cit., grounds of judgment 19 to certainty requires that, in applying 22). the prohibitions of Article 85, the sometimes considerable delays by the These findings, which are perfectly clear, Commission in exercising its powers can be analysed as follows:

If it is not to be guilty of denying justice, on the powers of the Commission, which the national court is obliged to give a could later rule as anticipated. In any ruling on the validity of the agreement case, the national court is well advised to submitted to it and, in consequence, on refuse to suspend judgment only when it its compatibility with Articles 85 and 86. is virtually certain of the tenor of the It has nevertheless the right, but not the decision to be taken by the Commission, obligation, to stay the proceedings in when, for example the agreement accordance with the national rules of submitted to it is identical with one procedure pending a decision of the which, in the past, was the subject of a Commission except when it obvious that negative decision by the Commission. the agreement is or is not compatible with Article 85 or Article 86. Moreover, it follows from grounds of judgment 9 to 11 in Roubaix-Wattrelos It exercises this right whenever legal that there is another case in which the certainty or procedural considerations so national court is empowered to give an require. This would occur if the indirect ruling on the applicability of immediate continuation of proceedings Article 85 (3), namely when the issue is could give rise to contradictory decisions one of deciding whether, despite the given, respectively, by the national court absence of notification, a contract may and the Commission, a situation which benefit from the exemption by categories could arise, especially when the provided for in Regulation No 67/67. agreement in question has been notified to the Commission or when there is still The Belgian Government observes that, time for this to be done. as is clear from Article 9 (3) of Regulation No 17, a national court has In raising the further question whether no jurisdiction to find in favour of the national court is permitted to 'decide exemption pursuant to Article 85 (3) but that Article 85 (3) is not applicable', the only to decide the question whether Hof van Beroep, Ghent, is clearly asking paragraph (1) of the article is applicable whether the said court is not already in to the contested agreement. It is, in any the course of applying that provision (a case, unlikely that a national court would task which is expressly reserved to the take such a decision in respect of an Commission under Article 9 (1) of agreement such as that referred to in the Regulation No 17) if it refuses to suspend fourth question and which is caught by judgment on the ground that it considers the prohibition only on account of the the agreement submitted for review to be cumulative effect of a group of manifestly incompatible with Article 85, agreements of which it forms part. with the implication that no exemption would be granted by the Commission On the other hand, the said court could pursuant to Article 85 (3) although it was rule on the applicability of Regulation still within its power to do so. No 67/67.

to stay the proceedings when they questions of interpretation or of involve considerations of old agreements application in respect of which neither which have been notified; on the other the Commission nor the Court of Justice hand, as far as new agreements are has yet given a ruling. Uncertainty may concerned, they are under no obligation arise not only when the practical to suspend judgment if they are able to significance of an agreement is being decide without difficulty either that the determined but, in view of Article 6 (2) of agreements do not come under Article Regulation No 17, also in connexion 85 or that they are incompatible with the with the retroactive effect which the common market. Commission might give to an exemption, especially in the case of an The Commission states that the terms of agreement exempted from notification. reference to be borne in mind are to be found in the judgments in Haecht II and The danger of contradictory decisions is BRT-I. especially marked when the Commission has initiated a procedure pursuant to the The situation described by the national said Article 6, which it normally does at court, namely, 'where exemption the time when it decides to carry out the pursuant to Article 85 (3) is possible may publication provided for in Article 19 (3) occur, in the first place, when of Regulation No 17. That indicates that proceedings have not yet been instituted the agreement in question is a priori-arid and, in the second place, when taken as a whole, not incompatible with proceedings have been instituted Article 85 (1) of the Treaty. But it often pursuant to Article 6 of Regulation No happens that, in the course of the 17, which could result in the grant of an procedure, the Commission proposes exemption within the meaning of Article alterations in the agreement which are 85 (3). accepted by those concerned. It can happen that the dispute submitted to the The answer to be given to the present national court is concerned with clauses

These considerations also apply to The Commission proposes accordingly agreements which, because they need not that the reply should be as follows: be notified may, by virtue of paragraph (2) of Article 6 of Regulation No 17, A national court called upon to rule on benefit from exemption with retroactive the validity of an exclusive purchase effect to the date when they were agreement concluded between an concluded. It is true that the danger of undertaking producing, importing or contradictory decisions is in this case engaged in the wholesale distribution of greater than in the case of agreements beer and undertakings selling draught caught by paragraph (1) of that article. beer may, out of considerations of legal But in practice the parties can be relied certainty, suspend judgment to enable upon to be sufficiently alert to ask the the Commission to adopt a decision. Commission to pronounce on the future of their agreement. If the parties do not The decision of the national court must take advantage of this opportunity and if take into account the practice followed the Commission takes no action of its by the Commission in its decisions and own accord, there would nevertheless be other information of comparable weight no reason for holding up the proceedings supplied by that institution concerning pending before the national court. the questions of fact and of law arising in the case concerned. When applied to the brewing industry, the foregoing considerations lead to the In these circumstances, a national court conclusion that, even if they are not may rule either that Article 85 (3) is required to be notified, agreements inapplicable or that it is likely that the forming part of a large network are Commission will give retroactive effect caught by the prohibition contained in to a subsequent application of that Article 85 (1) and they are unlikely to be provision to the case in question. able to benefit from exemption so long as Sixth question (i) the exclusive dealing clause is effective for a comparatively long Concordia believes that this question was period of time and especially, where submitted in the light of the statement it constitutes consideration for a loan, which appears in ground No 10 of the for a period longer than the actual judgment in Haecht II, which reads: 'In duration of the loan, the possibility the case of new agreements, as the being also borne in mind that the regulation assumes that so long as the latter may be repaid before time; Commission has not taken a decision the (ii) the agreements relate to drinks other agreement can only be implemented at than draught beer. the parties' own risk, it follows that If these requirements are fulfilled, the notifications in accordance with Article 4

solely on the basis of Article 85 (1) while (3) and the provisions of the said the possibility still exists that the regulation'. This applies a fortiori in the Commission may declare that provision case of agreements which are not subject inapplicable by virtue of Article 85 (3); to the obligation to notify. such an agreement would, therefore, have provisional effect. If the judgment in Portelange is regarded as referring only to 'old' agreements, the These conclusions hold good despite the answer to be given to the national court passages quoted above from the is that, in the case of 'new' agreements, judgment in Haecht II. On the contrary, the effect of provisional validity is that although (in ground No 10) the Court the courts can grant the parties to the held that an agreement on which the Commission has not taken a decision contract only such interim measures as are provided for under national law. 'can only be implemented at the parties' own risk', this means that such an agreement is provisionally valid in the In the view of the Belgian Government, sense that, if the agreement proves later the question covers agreements which to be void, the party for whose benefit it were concluded after the entry into force was executed must (at his own cost and, of Regulation No 17, which come under if necessary, by means of compensation) Article 85 (1), and have either been restore the situation existing prior to its notified with a view to exemption from execution. The subsequent passage in the prohibition provided for in that ground No 10 stating that 'notifications article or have been released from the ... do not have suspensive effect' must duty to notify pursuant to Article 4 (2) of be read in conjunction with ground No the said regulation. In these 11 which states that, notwithstanding the circumstances, it is enough to refer to the principle of legal certainty, the court judgment in Portelange in which it is cannot be absolved 'from the obligation stated that it would be contrary to the of deciding on the claims of interested general principle of legal certainty to parties who invoke the automatic nullity'. conclude that, because agreements It does, of course, follow from this that notified are not finally valid so long as notification does not automatically the Commission has made no decision deprive those concerned of the right to on them under Article 85 (3) of the invoke the nullity of the agreement; but Treaty, they are not completely it is clear from ground No 12 that it efficacious (loc. cit., ground No 15). The devolves on the court to judge whether fact that, under that judgment, those there is cause to suspend proceedings agreements remain completely valid pending a decision of the Commission, means that they can also be enforced by in other words, to decide whether the all legal means. This principle is not nullity has immediate effect, which impaired by the judgment in Haecht II, would be the exception, or whether its which merely states that the Commission effect is suspended, in which case the can take a decision to refuse exemption agreement would remain provisionally and thus render the agreement void with valid. retroactive effect.

effective erga omnes and is not binding In these circumstances it would appear on the Commission. It ought to be that none of the provisions of the Decree regarded simply as a finding that there is are incompatible with the EEC Treaty an agreement and that administrative nor, more particularly, with Articles 5 confirmation of its validity is likely to be and 7 thereof or with its provisions forthcoming at a later date. This is not relating to the free movement of goods. the same thing as the provisional validity which the Court has accepted in relation to old agreements. As regards agreements The Belgian Government proposes that which are not subject to notification and the question should be answered as have not been the subject of a procedure, follows: the power which the national court has to give such an anticipatory decision In order to determine whether the Royal supplements the powers of the Decree of 25 September 1964, in which, Commission in a way that does not in essence, the Belgian Government set seriously endanger the uniform the maximum duration and maximum

application in all its aspects, of Article penalties applicable to small-scale 85. brewery contracts, is contrary to Community law, the national court may The Commission submits that the have regard to the basic provisions of the answer should be as follows: Treaty, in particular, Articles 5 and 7 thereof and to the provisions addressed The validity of a new exclusive purchase to the Member States relating to the agreement is determined by the validity abolition of quantitative restrictions of the network of which it forms part. between them.

submitted, in particular, the following therein reach a certain order of new considerations. magnitude. If it did this, the Court would, so to speak, be laying down a General regulation in the form of a judgment by promulgating a rule of law which it is for Concordia states that the Stella Artois the Council or the Commission to adopt. group is responsible for 35 % of Belgian production and not 53 % as stated by the This approach is especially open to Commission. Furthermore, the figures criticism, in that the figures submitted by supplied by the Commission are the Commission are either incomplete or incomplete since they contain no unreliable. In this connexion, Concordia information either about the structure of takes particular exception to the the market in beer in Italy or in the statement of the Commission that 65 % United Kingdom, about intra- of Belgian production, or nearly 9 Community trade in the years before 1975 or million hectolitres, is sold under about exports from Ireland to the other exclusive dealing agreements. These countries of the Common Market. figures conflict with the statement of the Commission that 60 % of the total Concordia submits a digest of statistical information relating to the production Belgian consumption takes place in the and marketing of beer within the 'Horeca' sector. This figure produces the Community. result that only two-thirds of 'Horeca' consumption, or about 5 600 000 are sold The Commission replies that its estimate by means of such contracts. The of Stella Artois's share of the market is Commission corrected its previous based on the consumption of raw statements and accepted a figure of 5 500 000 hi. materials by that firm and on an investigation conducted by a firm of specialists. Concordia goes on to state that, in replying to this question, it must be In reply to questions from the Court, the borne in mind that the Community Commission explains that a number of provisions concerning agreements are

not in the first place designed to protect foreign competition from that part of the the freedom of action of those engaged market. This does not appear to apply to in trade or industry but to ensure that the the Belgian market in beer. Foreign market has a structure which is free from producers can, in any case, market their distortions of competition. beer through large stores and supermarkets. The criteria suggested by the Commission are open to question, Agreements of the type in dispute expire on different dates.

For contentions of the Commission tend to example, certain draught beers cannot be obscure the dividing line between the kept fresh for very long with the result fields to which Articles 85 and 86 that, in the United States, they are respectively apply. considered to be 'local by nature' (that is to say by their nature reserved for local Contrary to the Commission's consumption). statements, the market to be taken into account cannot be limited to the 'Horeca' With the help of statistics Concordia sector to the exclusion of beer sold in, for claims that, in recent years, the trade in example, grocers' shops. A genuinely beer between Member States has different market exists only in the case of increased five times faster than total a product which, in technical terms, is production in the Community.

JUDGMENT OF 1. 2. 1977 —CASE 47/76

would serve as a regulation; all it did was Regulation No 67/67 refers, even in to marshal a set of facts the knowledge of subparagraph (b), exclusively to which was essential for the purpose of agreements which define the territory in replying to the question of the national which they are to apply. This contention court. conflicts both with the clear wording of the said paragraph (1) and with the fact Even granting that trade between that a definition of the area to which it is Member States has increased, the to apply is not essential for the situation on the market in beer is not application of an exclusive purchase entirely satisfactory. contract, whereas it is essential in the

With supporting arguments, the case of the exclusive supply contracts Commission maintains its contention referred to in Article 1 (1) (a). that the only market to be taken into account is that of the Horeca sector, The Commission's argument that which is not in competition with that of Regulation No 67/67 cannot apply to home consumption, since the products agreements which may be incompatible marketed in these sectors are not with Article 85 owing to factors interchangeable. In particular, a unknown to the parties is tantamount to consumer who wishes to drink beer in a saying that exemption by categories restaurant and finds it full or shut does ceases to apply in the very field where not go to a grocer's shop or a the need for legal certainty is particularly marked. supermarket to buy beer.

Concordia rejects the Commission's The principle, embodied in ground No contention that Article 1 (1) of 14 of the judgment in Roubaix-

DE NORRE v BROUWERIJ CONCORDIA

Wattrelos, that the exemption by may help to prevent a national court categories provided for in Regulation No from wrongly assuming that exemption 67/67 is also valid in the case of 'similar' is likely to be granted. agreements concluded between two undertakings in a single Member State Sixth question cannot apply to brewery contracts, since The Commission notes that, in its the latter have an entirely different character from that of contracts entered statement, it interpreted the words 'new' into by intermediaries operating within a agreement in this question as referring to particular area. fresh brewery contracts added to an existing network. But the question arises Fifth question whether the Hof van Beroep, Ghent, did not use these words to refer to contracts

JUDGMENT OF 1. 2. 1977 — CASE 47/76

fate of which the Commission has not It follows from this that, if the national yet decided is put into effect at the court decides to suspend judgment, the parties' own risk. It is only when a agreement must continue to be regarded national court considers that an as void. Consequently, the court cannot exemption appears likely to be granted at one and the same time suspend that it is possible to refer to the judgment and adopt measures whereby provisional validity of the agreement in the agreement is granted the benefit of question. But this is clearly provisional validity. distinguishable from the 'provisional Apart from all that, it is important to validity' conceded in certain judgments of the Court in connexion with 'old' point out that the case-law of the Court on the subject of standard contracts agreements, which does not depend on a (judgment of 30 June 1970 in Rochas, decision taken by a national court. Case 1/70 ECR 515) has no application This conclusion accords with the on the subject of brewery contracts since the question whether such a contract is principle of legal certainty, since it or is not compatible with Article 85 may means that undertakings run scarcely any depend on external factors. risk in carrying out an agreement when, in the light of Community practice, they The Advocate-General delivered his can count on the probability of its being opinion at the hearing on 7 December the subject of an exemption decision. 1976.

Law

1 By interlocutory judgment of 26 May 1976, received at the Court Registry on 4 June 1976, the Hof van Beroep, Ghent, referred to the Court under Article 177 of the EEC Treaty a series of questions on the interpretation of Article 85 of the Treaty, of Regulation No 17 of the Council of 6 February 1962 implementing Articles 85 and 86 of the Treaty (OJ English Special Edition 1959-1962, p. 87), and of Regulation No 67/67/EEG of the Commission of 22 March 1967 on the application of Article 85 (3) of the Treaty to certain categories of exclusive dealing agreements (OJ English Special Edition 1967, p. 10).

6 (1) By its nature and purpose, that regulation applies only to agreements which, in the absence of exemption, fall under the prohibition contained in Article 85 (1) of the Treaty.

7 On the other hand, as the Court declared in its judgment of 12 December 1967 in Brasseries de Haecht v Wilkin (Case 23/67 [1967] ECR 407), 'Agreements whereby an undertaking agrees to obtain its supplies from one undertaking to the exclusion of all others do not by their very nature necessarily include all the elements constituting incompatibility with the common market' but may exhibit them 'where, taken either in isolation or together with others, and in the economic and legal context in which they are made' (in particular, the existence of similar contracts and the cumulative effect produced by all those contracts), they 'may affect trade between Member States and where they have either as their object or effect the prevention, restriction or distortion of competition'.

8 In these circumstances, this question must be understood as asking whether, on the assumption that, owing to the cumulative effect of all similar agreements, agreements such as that at issue fall under the prohibition contained in Article 85 (1), they benefit from the exemption by categories provided for in Regulation No 67/67.

9 (2) Under Article 1 (1) of that regulation, as that provision was amended by Regulation (EEC) No 2591/72 of the Commission of 8 December 1972 (OJ L 276 p. 15), 'it is hereby declared that until 31 December 1982 Article 85 (1) of the Treaty shall not apply to agreements to which only two undertakings are

14 However, paragraph (2) of that article reads: 'Paragraph 1 shall not apply to agreements to which undertakings from one Member State only are party and which concern the resale of goods within that Member State'.

15 Since the wording of this provision covers agreements such as that involved in the present case, the question arises whether those agreements may nevertheless benefit from group exemption in so far as they fall under the prohibition contained in Article 85 (1) of the Treaty.

16 In the judgment of this Court in Roubaix-Wattrelos, referred to by the national court, it was held that the effect of the said Article 1 (2) 'is to exclude from the scope of Article 85 (1) and, therefore, from Regulation No 67/67, exclusive dealing agreements which are purely domestic in nature and are not capable of significantly affecting trade between Member States' but that, on the other hand, it 'is not intended to exclude from the benefit of exemption

DE NORRE v BROUWERIJ CONCORDIA

by categories those agreements which, although concluded between two undertakings from one Member State, may nevertheless by way of exception significantly affect trade between Member States but which, in addition, satisfy all the conditions laid down in Article 1 of Regulation No 67/67'.

17 That decision is based on the fourth recital of the preamble to the regulation which states that 'since it is only in exceptional cases that exclusive dealing agreements [of the kind covered by the regulation] concluded within a Member State affect trade between Member States, there is no need to include them in this Regulation'.

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23 Article 2 is concerned only with exclusive supply agreements whereas Article 3 covers circumstances which manifestly do not apply to brewery contracts of the type referred to by the national court.

24 (3) Although the foregoing considerations suggest that the questions raised by that court should be answered in the affirmative, it nevertheless remains to be determined whether such a reply would not conflict with certain objections raised during the proceedings.

25 (a) It has been contended that a ruling in which Regulation No 67/67 was held to be applicable to agreements such as those in question would be inconsistent with previous decisions of the Court to the effect that, although, taken in isolation, exclusive supply or purchase agreements do not fall under the prohibition contained in Article 85, they may nevertheless do so if they form part of a series of similar agreements which, considered as a whole, may significantly affect trade between Member States and competition within the common market.

26 The case-law referred to was concerned only with the question whether, and if so in what circumstances, the abovementioned agreements are prohibited under Article 85 (1) of the Treaty and not with the conditions in which, in those circumstances, they benefit or may benefit from group or individual exemption under the third paragraph of that article.

27 The only judgment of the Court which dealt with an issue similar to that to be decided in the present case, namely the judgment in Roubaix-Wattrelos, supports the conclusion that the question should be answered in the affirmative, as is clear from the considerations set out above.

agreements involved is so restrictive that group exemption did not appear justified, it would have the right and the duty to use the powers conferred on it by Article 7 of Regulation No 19/65, which states: 'Where the Commission ... finds that in any particular cases agreements ... to which a regulation adopted pursuant to Article 1 [that is, a regulation providing for exemption by categories] of this Regulation applies have nevertheless certain effects which are incompatible with the conditions laid down in Article 85 (3) of the Treaty, it may withdraw the benefit of application of that regulation and issue a decision in accordance with Articles 6 and 8 of Regulation No 17, without any notification under Article 4 (1) of Regulation No 17 being required'.

33 In this connexion it must be borne in mind that, as the statements of the Commission themselves make clear, the latter has, in the first place, been notified of a series of brewery contracts without having, up to the present, taken a decision thereon and, in the second place, has conducted an inquiry within the meaning of Article 12 of Regulation No 17 into the brewing industry which was, however, restricted to the six original Member States and has not yet itself produced a decision.

34 (b) Finally, the applicability of Regulation No 67/67 to agreements such as that in question cannot be challenged on the ground that, as they come under Article 4 (2) (1) of Regulation No 17, they are exempt from notification, although Regulation No 67/67 makes no provision governing the status of. agreements which are the subject of such exemption.

39 In these circumstances, there is no need to answer the other questions raised by that court.

Costs

40 The costs incurred by the Belgian Government and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable and as these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the national court, the decision as to costs is a matter for that court.

DE NORRE v BROUWERIJ CONCORDIA

On those grounds,

THE COURT

Registrar President

OPINION OF MR ADVOCATE-GENERAL MAYRAS DELIVERED ON 7 DECEMBER 1976 1

Mr President, The facts are as follows: Members of the Court, On 7 April 1966 the Concordia brewery This case raises once again the whole of Geraardsbergen (Belgium) concluded a question of the assessment of the contract with a couple running a cafe so-called 'brewery' contracts in terms of under which they received the loan, at a Article 85 (1) and the relationship rate of 5 % per annum, of a sum of FB between the Community authorities and 300 000 repayable in ten years. The cafe the national judicial authorities in the owners undertook, in exchange, not to application of that article to those sell in the course of their business any agreements. drinks other than those from the brewery

1 — Translated from the French.