C-123/83

Guy Clai--

on the application of Article 85 of the EEC Treaty to inter-trade agreements

concluded within the Bureau national interprofessionnel du cognac (BNIC) fixing

the price of cognac,

THE COURT

composed of: Lord Mackenzie Stuart, President, G. Bosco and C. Kakouris (Presidents of Chambers), T. Koopmans, U. Everling, K. Bahlmann and Y. Galmot, Judges,

Facts and Issues The facts, procedure and written obser­ Where a contract of supply which is subject vations submitted under Article 20 of the to an agreement that has been made Protocol on the Statute of the Court of the generally binding does not comply with the EEC may be summarized as follows: agreement, it is automatically void and the inter-trade organization concerned is 1. Facts and written procedure entitled to bring an action for a declaration 1.1. As is apparent from the national to that effect. court's order and from the other documents Finally the inter-trade organization is before the Court, French law (Law No entitled to ask the court to award it 75-600 of 10 July 1975 on the agricultural compensation for the damage it may have inter-trade organization, as supplemented suffered in the event of a breach of the rules and amended by Law No 80-502 of 4 July of agreements which have been made 1980) provides for the possibility of making generally binding. agreements within an agricultural inter- trade organization which are designed, by The plaintiff in the main proceedings, the means of standard form contracts, Bureau national interprofessionnel du marketing agreements and common action cognac [National Inter-Trade Board for compatible with the general interest and Cognac, hereinafter referred to as 'the with the rules of the European Economic Board'] is an inter-trade organization for Community, to promote: the marketing of Cognac wines and spirits The compilation of information concerning created by legislation originally enacted in supply and demand; 1941 and subsequently amended on a number of occasions. Under the provisions The adjustment and regularization of applicable at the time of the facts (Order of supplies; the Minister for Agriculture of 10 May The application, subject to State control, of 1975) the Board was composed of: marketing rules, prices and conditions of (a) two persons appointed by the Minister payment; for Agriculture to represent respectively The quality of goods; wine-growers and the trade in the area entitled to the registered designation of Inter-trade relations in the sector origin cognac; concerned, especially the establishment of technical standards and programmes of (b) delegates of wine-growers and applied research and development; and distillation co-operatives, representatives The sale of products on the domestic and of dealers and commercial distillers and external markets. delegates from associated trades, also appointed for three years by the After their adoption such agreements may, Minister for Agriculture on the basis of at the request of the inter-trade organ­ lists drawn up by the trade organ­ ization concerned, be made generally izations concerned. binding for a specified period by ministerial order. The effect of this is to make the According to the internal rules adopted by agreement binding on all members of the the Board on 19 June 1978, which were the trades making up the inter-trade organ­ rules in force at the time of the facts, its ization. members were assigned to groups, namely

dealers and wine-growers, each of which Law No 75-600 of 10 July 1975 (as selected a representative. supplemented and amended by Law No Pursuant to a Ministerial Order of 14 80-502 of 4 July 1980), with a view to the November 1960 the Chairmanship of the issuing of an order making it generally Board is entrusted to a general agricultural binding.' engineer appointed by the Minister for That agreement was signed on behalf of the Agriculture, who also appoints a dealers' group and the wine-growers' group. Government Commissioner to take part in the deliberations of the Board and in those The agreement was also signed by the of its permanent committee; the salaried director of the Board but did not Commissioner 'may either approve the bear the signature of the Government decisions adopted or submit them for Commissioner, who in his decision of 13 approval by the Minister'. November 1980 on the organization of the For the purpose of applying the legislative 1980-81 marketing year refers only (Article provisions relating to the above-mentioned 17) to 'an inter-trade agreement fixing a inter-trade agreements, the Board laid down minimum price for wines of the Cognac a special procedure in its internal rules, district intended for the production of which were approved by an Order of the cognac' without mentioning a minimum Minister for Agriculture dated 2 August price for new or matured spirits or a 1978. minimum price for cognac. It must first be decided in general meeting, Subsequently, as required by the second by a majority of 3/4 of the members and paragraph of Article 2 of the Law of 10 July after consultation with the meetings of the 1975, that agreement was adopted unani two groups and representatives of ancillary mously in general meeting by the various trades, to call an extraordinary general trades represented on the Board.

The position cognac and in particular: adopted by each of the groups is itself the result of internal negotiations followed by a In Article 2, the minimum price of wines decision reached by a qualified majority of intended for the distillation of spirits the members representing various trade entitled to the designation 'cognac'; groups. Only after it has been established that there In Article 3, the cost of distillation; is a consensus of opinion in favour of doing In Article 4, the producer price of new so, does the general meeting request the spirits, that is to say less than one year old; competent administrative authority to make the agreement generally binding. In Article 5, the price of matured spirits, In accordance with the aforementioned that is to say with an age of one or more provisions the Board reached an agreement years; on 7 November 1980 entitled: In Article 7, time-limits for payment; and 'Inter-trade agreement on the prices of distillable white wines and cognacs In Articles 8 and 9, the minimum price of submitted, pursuant to the provisions of cognac.

After an inquiry carried out by its agents as Ministry of Economic Affairs and Finance a result of a complaint from various wine­ to the Board. growers, the Board instituted proceedings against Mr Clair, a dealer in Brie-sous- As regards the Board's second contention, Matha, before the Tribunal de Grande the Tribunal de Grande Instance considered Instance, Saintes, for buying cognac from that the Board was unquestionably a quasi- various wine-growers at prices much lower administrative body in view of the fact that than the inter-trade price. In those it was financed by parafiscal levies and the proceedings, which were brought on the Government Commissioner on the Board basis of the inter-trade agreement of 7 was an executive agent of a legislative November 1980, it was claimed that authority. transactions which did not comply with that agreement were automatically void under Article 4 of Law No 75-600 of 10 July 1975. However, the Tribunal held that that Law of 1975, as amended by the Law of 4 July 1980, was legally separate from the rules The claim was opposed by Mr Clair on the governing the functioning of the Board. It ground that it was contrary to the was true that the Law applied to three cate­ provisions of Articles 85 and 86 of the EEC gories of products, namely cognac, Treaty and he asked in the alternative that a champagne and armagnac, and that the request for interpretation be made to this trade groups concerned with those products Court. The Board opposed the request on had a quasi-administrative status; however, the ground that, on the one hand, cognac the agreement concerning cognac concluded fell outside the scope of the Community on the basis of the Law of 1975 made no provisions referred to and, on the other, the reference to that special status. measure on which the proceedings against Mr Clair were based was an administrative The national court stated that the measure which the Tribunal de Grande agreement in question was signed jointly by Instance could not interpret by reason of the representative of the dealers' group, the the principle of the separation of jurisdiction representative of the wine-growers' group between courts and administrative tribunals. and by the Chairman (Director) of the Board and that the Government Commissioner on the Board took no As regards the Board's first contention decision fixing a minimum producer price concerning the applicability of the but merely established maximum sales provisions of Articles 85 and 86 of the values, a measure quite different from the Treaty to cognac, the Tribunal de Grande fixing of minimum prices, in respect of Instance, Saintes, accepted that cognacs, which he merely provided (in Article 17 of which were derived from second stage his decision of 13 November 1980) for an processing, were not agricultural but inter-trade agreement between the parties. industrial products.

As regards the legal status of the parties to light of the fact that the potable spirits the agreement, the national court referred referred to in the agreement of 7 to a decision of the Commission of the November 1980 conform to the European Communities of 26 July 1976 requirements for the registered (76/684/EEC). In that decision, which was designation of origin for cognac and addressed to a body similar to the Board, that cognac distilled from grapes is the Bureau interprofessionnel de l'Armagnac consumed undiluted almost without [National Inter-trade Board for Armagnac], exception?

Treaty: It nevertheless requested the parties to the main proceedings and the Commission of '(1) Since the wine-growers' group and the the European Communities to answer in dealers' group are both represented writing a number of questions. That was within the Bureau national inter done within the time-limits laid down. professionnel du cognac, are they to be regarded as an association of under 2. Written observations submitted under takings, having regard to the fact that Article 20 of the Protocol on the Statute of the agreement reached between them the Court of Justice of the European was also signed by the Chairman of the Communities

BNIC / CLAIR

It adds that on 28 April 1945 a new ministerial order approved the rules of the It observes that implementation of those Bureau National de Répartition des Vins et decisions and the ministerial orders is Eaux-de-vie de Cognac [National Board for entrusted to the Board, the director of the Distribution of Wines and Cognacs] and which is generally a senior official of the that two orders of 21 January 1946 and 20 French State.

JUDGMENT OF 30. 1. 1985 — CASE 123/83

From its status as a public body the Board From the above-mentioned considerations draws conclusions about the legal nature of the Board concludes that Article 85 of the the agreements entered into as part of its EEC Treaty does not apply to it because it functions and tasks. It observes that each is neither an undertaking nor an association year the Government Commissioner, on a of undertakings within the meaning of that proposal from the general meeting, submits article. to the Government what is customarily To show that it is not an undertaking the called a draft inter-trade agreement on the Board refers to the definitions of the term prices of distillable white wines and cognacs. contained in legal literature; according to It states that if the Government agrees with those definitions the entity concerned must the proposals made to it, it issues an order first of all have an appropriate organization which makes the proposal binding and and secondly must pursue a specific requires dealers and growers to observe the economic aim; the Court has added the prices fixed; if the Government does not notion of a 'separate legal entity' pursuing agree, it makes such amendments as it an economic aim (judgments of 13 July wishes. 1962 in Joined Cases 17 and 20/61 Klöckner v High Authority [1962] ECR 325 and Case The Board states that it is responsible, in 19/61 Mannesmann AG v High Authority conjunction with the administration [1962] ECR 357). (Departments responsible for Fraud Investigation, Taxation, Competition and The Board considers that of those factors it Prices), to ensure observance of the prices is the 'specific economic aim' which is parti­ fixed by the order published in the Official cularly important and that in the absence of Journal of the French Republic and adds any definition by the Court the definitions that the fixing of prices for transactions in legal literature must be adopted; although

The Board claims that, in view of its In that respect it points out that its director statutory origin, financing, powers and and chairman and the Government public function, it cannot be regarded as Commissioner are officials appointed by the being involved in production or trade in Minister for Agriculture, who by ministerial products or services. order determines the composition of its meeting, chooses and directly appoints certain members thereof and also appoints As regards the suggestion that it is an others on the basis of lists drawn up by the association of undertakings, the Board trade organizations. observes that, in its Decision of 15 December 1982 (IV/29.883-AROW/BNIC, The Board thus draws the conclusion that it 82/896/EEC) relating to a proceeding cannot constitute an association because an brought against it under Article 85, the association presupposes a voluntary Commission took the view that it was an agreement, an 'animus societatis' with a 'association of undertakings' within the common aim, that is to say a contractual meaning of Article 85 of the EEC Treaty element which is completely absent here, and that its decisions constituted 'an act since it is a mandatory body whose creation separate from the subsequent extending and organization depend solely on the order' and in consequence imposed upon It initiative of the public authorities, which are a fine of 160 000 ECU. entitled to dissolve it at any time even contrary to the wishes of all its members. The Board observes in that respect that its Government Commissioner took the view The Board states that it differs from the that the penalty related to a measure which inter-trade bodies which were created and had been abandoned and was of little recognized on the basis of the aforesaid importance; in consequence, on instructions Law of 10 July 1975. It cites Article 1 of the from the French Ministry for Agriculture, it Law, which provides that orders may be was decided not to appeal simply to issued to recognize 'bodies constituted by establish a point of law. However, the the trade organizations most representative procedure adopted for payment of the fine of agricultural production and, where shows the eminently public nature of the appropriate, processing, dealers and distri­ Board. It points out that the Commission bution, representing the various interests took proceedings not against the under­ involved' and observes that Article 5 of the takings which were said to have agreed Law makes a distinction between those unlawfully to fix a minimum price but inter-trade groups and inter-trade organi­ against the Board itself on the basis that the zations 'created by legislation or regulation' Board, despite its express statute, was an such as itself. association of undertakings. That being so, the Board observes that it To refute that analysis and to show that it is cannot be regarded as an association of a public body the Board emphasizes first of undertakings on the sole ground that it all that it is financed by a parafiscal levy comprises representatives of trade organ­ annually approved by the French Parliament izations, since the composition of its general and is subject to public-sector accounting meeting is determined by the Minister for rules. Agriculture and contains a certain number

(1) The fact that the wine-growers' group 2.1.3. To answer the question whether the and dealers' group are both represented fixing of a minimum purchase price for on the Board does not amount to an spirits must be regarded as likely to affect association of undertakings because: trade between Member States, the Board refers to Recital No 49 of the statement of (a) the fact that the dealers' group and objections issued by the Commission on 8 wine-growers' group are represen­ February 1982 (AROW/BNIC), which ted in the general meeting of the reads as follows: Board does not result from a volun­ tary association of undertakings, but from the application of French law, as laid down in Article 9 of the Law 'Certain minimum prices fixed by the Board of 27 September 1940, the order of may appreciably affect trade between 5 January 1941, the order of 4 Member States. The fixing of minimum December 1944, the order of 28 prices for the purchaser, by members of the April 1945, the order of 9 July 1946 dealers' group, of wines for distillation and and in subsequent orders amending new or matured spirits for members of the the organization of that public wine-growers' group does not in itself seem body; capable of appreciably affecting trade between Member States. Such prices relate to transactions in respect of intermediate (b) The representatives of the wine­ products which are not normally intended at growers' and dealers' groups on the that stage to be supplied for consumption or Board do indeed represent particu­ sent out of the Cognac area. They lar undertakings, but are neverthe­ nevertheless influence the price of the less appointed by order of the finished product likely in due course to be French Minister for Agriculture; exported; however, such indirect influence consequently they hold their manda­ does not lead to the conclusion in the tes and perform their duties pursu­ present case that trade between Member ant to the ministerial order which States may appreciably be affected.' appointed them and not as represen­ tatives of particular undertakings;

(a) has little effect on the ultimate con­ the inter-trade agreements concluded within sumer; the Board, as distinct from the orders making them generally binding, constitute decisions of an association of undertakings; (b) above all meets a regional interest inasmuch as it is intended to ensure a fair standard of living for wine­ the members of the Board appointed by the growers, to stabilize markets and to Minister represent the trade organizations ensure the availability of supplies, or groups, which themselves are made up of whilst at the same time ensuring undertakings ; reasonable prices for consumers. the measures in question are not taken on the basis of the Government All the aforesaid aims fall within the general Commissionner's powers to issue regu­ objectives of Article 39 of the EEC Treaty. lations;

JUDGMENT OF 30. 1. 1985 — CASE 123/83

The prohibition on deliveries of bulk He explains that it is a potable spirit which Armagnac of age grades 4 and 5 imposed by is made from a wine produced from the BNIA in its circular 8/74 dated 29 May particular vine varieties harvested in a 1974 is the result of a decision by an associ­ geographical area defined by a Decree of 1 ation of undertakings. The Armagnac pro­ May 1909 and which is protected by a ducers, cooperatives, distillers and dealers system of registered designations of origin who are represented through their trade laid down by the Decree-Law of 30 July associations in the BNIA are undertakings 1935; entitlement to the designation for the purposes of Article 85 (1). The fact 'cognac' is subject to regulations relating to that the BNIA is entrusted with certain inspection, distillation, age and marketing. functions by decree 62/20 to control quality does not mean that it cannot be considered He observes that the cost price of the spirits to be an association of undertakings for the sold by the wine-grower after distillation is purposes of Article 85 (1). The measure determined by two factors, namely the price impugned exceeds the scope of measures of the wine used and the cost of distillation. necessary for the performance of functions assigned to the BNIA by the decree.' He maintains that it is clear that the fixing of a minimum price for new or matured spirits which is higher than the level In the opinion of the defendant in the main resulting from the above-mentioned factors proceedings, the view taken in the present which naturally determine the price may case cannot be different from that taken in affect trade between Member States. the two decisions adopted against the BNIA and the Board itself. Although the great majority of purchasing dealers are established in Cognac or in the Finally, in the view of the defendant in the area defined by the decree of 1909, there is main proceedings, the fact that the Board's nothing to prevent a dealer established salaried Director, and not its Chairman — outside the defined area from buying spirits as stated by the national court — counter­ from the area for the purpose of blending signed the agreement is of no legal them without losing entitlement to the relevance, since neither the Board nor, a designation 'cognac', whether the spirits

According to the defendant, the fact that the Commission in its decision of 15 He refers in that respect to financial December 1982 was examining a situation statistics which show that the purchase price which was not strictly identical to that of of spirits represents, in relation to the sale the present case is not decisive; although the price of cognac, a proportion not less than application made by AROW which led to 40 to 50% of sales in bottles (88% of the the decision in question related to the market) and 60 to 70% for sales in barrels provisions of the agreement of 7 November (12% of the sales); it is only in respect of 1980 (and to those of 12 December 1978 prices that small dealers can compete with and 18 October 1979) concerning deliveries the more powerful dealers, who with their of the finished product, cognac, and not large advertising budgets dominate the Articles 4 and 5, which determine the market, and it is in the consumer's interest production price of new or matured spirits, that such price competition should be the two situations are similar because, unfettered. although sales of spirits by wine-growers take place essentially on the French domestic market, the fixing of a minimum The defendant observes that the question price nevertheless affects international trade. put expressly refers to the fact that cognac enjoys a registered designation of origin and to the fact — which is indisputable — that it Cognac is the only spirit produced in a is drunk 'undiluted almost without country of the Community subject to a exception', which shows that the national restrictive organization, since there is no court was concerned with the question price fixing in the case of other spirits, whether the exclusive nature of the namely spirits derived from wine (French registered designation of origin 'cognac' Armagnac and Italian grappa), spirits exempted cognac from the Community rules

in view of the fact that identical spirits could and by Italy to protect spirits obtained from not be produced in any other Member State wine and marc against spirits obtained by or at least not under the same name. the distillation of cereals and sugar cane. In that regard the defendant cites the The defendant in the main proceedings case-law of the Court (Case 168/78 maintains therefore that apart from the Commission v French Republic [1980] ECR special feature arising from the designation 347; Case 169/78 Commission v Italian of origin or the method of consumption the Republic [1980] ECR 383; Case 171/78 common characteristics of all spirits are Commission v Denmark [1980] ECR 447 sufficient for cognac to be in direct and Case 216/81 Cogis v Amministrazione competition with all other existing spirits. delle Finanze dello Stato [1982] ECR 2701) and contends that the principles propounded It thus concludes that the fixing of a in those cases, in the context of proceedings minimum purchase price for spirits intended concerning the application or interpretation for the manufacture of cognac prevents free of Article 95 of the EEC Treaty, apply in competition, adversely affects trade between the present case, because it is inconceivable Member States, restricts the market without that the concept of 'similar products' should improving quality and consequently is an be interpreted differently depending on obstacle to the economic inter-penetration whether it is a matter of assessing conditions intended by the Treaty. of commercial competition or the protectionist intervention of a State by 2.3.

The Court reached that spirits and subsequently cognac are agri conclusion after making the following cultural products; spirits and cognac are findings: themselves not included in Annex II to the (1) Spirits are produced by distillation and EEC Treaty, which contains an exhaustive contain, as a principal ingredient, list of agricultural products for the purposes alcohol suitable for human consumption of Article 38. Thus, according to the at a relatively high degree of Commission, the position is as follows : concentration; within the largest group (a) As regards white wines: of alcoholic beverages, they therefore form an identifiable whole united by They are subject to the rules of the common characteristics. common organization of the market in (2) Typical varieties of spirits may be wine laid down by Regulation (EEC) defined by particular characteristics, so No 337/79 and all the regulations much so that some of them are even adopted in implementation thereof; protected by registered designation of

BNIC / CLAIR

trade agreements for 1981-82 and 1982-83 and the other is directed against the orders making those agreements generally binding. The status of the Board as a private or administrative body under French domestic The complaint against the inter-trade law determines the jurisdiction of the agreements (Case IV/30.622), which was national courts and cannot as such be taken lodged on 14 April 1982, is based on Article into account in an analysis made solely for 3 of Regulation No 17 and relates to the the purposes of applying Community law. fixing of the price to dealers of distillable

Commission since it has already had to decide the first question in its aforementioned decision of 15 December The Commission thus draws a distinction 1982; the second question is closely related between, on the one hand, the activities to the first and the third question falls which the Board conducts as part of its within the scope of the investigation aims, as defined in the applicable legislation, currently being conducted by the Direc and the procedures leading to the adoption torate-General for Competition following of measures by the Board's Government the above-mentioned complaint by the Commissioner in the exercise of his power dealers' union (Case IV/30.622). to issue regulations and, on the other,

'contractual' procedures conducted with a The trend has been in the direction of view to fixing prices pursuant to Law No widening the scope of the agreements 75-600, which, as in the present case, lead (progressive inclusion of spirits and sub to the conclusion of agreements by inter- sequently the finished product, cognac) and trade organizations followed by the a gradually more pronounced desire to adoption of ministerial orders making those make them binding (the appearance of agreements binding. inspections) ; In the Commission's view that difference in Amendments or additional special measures procedure is in fact apparent from the are always presented as being desired by the decision of the Government Commissioner inter-trade groups or as directly arising on the Board dated 11 November 1980, from economic necessity without reference which contains a number of measures to amendments in the legislation or regu relating to wines and spirits (ceilings on lations. production or marketing), but as regards In that respect the Commission states that it prices themselves simply provides that 'a is only since 1978 that Law No 75-600 has minimum price for wines from the Cognac been used to make the agreement reached region intended for the production of within the Board binding on traders who cognac shall be fixed by inter-trade are not members of associations represented

As regards the second question, and it is they and not the Government which is designed to establish whether the Commissioner who request that it be made fixing of minimum prices by means of generally binding (Article 11 of the agreements constitutes a concerted practice, agreement). the Commission considers that the affirm ative answer which it proposes to the first Where at a meeting of the wine-growers' question makes an answer to the second group and the dealers' group prices are question unnecessary. fixed, whether it be in relation to wines, spirits or the finished product, cognac, the Nevertheless, should it be decided that there Board, which is made up of trade groups is no association of undertakings in this that are in turn composed of undertakings, case, the Commission contends that for the is acting as an association of undertakings purposes of Article 85 of the Treaty there within the meaning of Article 85 of the are at the very least 'agreements between Treaty. undertakings' (rather than 'concerted practices' as the national court suggests). In the Commission's view, that analysis is The Commission considers that the con

BNIC / CLAIR

The Commission states that under (b) the restriction of competition between Community law it is necessary and at the dealers with regard to the purchase cost same time sufficient for there to be a of spirits, which may in the long term common intent binding two or more parties lead to the elimination of those who are inter se for there to be an 'agreement'. financially smaller;

It cites the judgment of the Court of 15 July 1970 in Case 41/79 (ACF Chemiefarma NV (c) the repercussion on the price of cognac v Commission [1970] ECR 661), where it which this restriction of competition has was held that a gentlemen's agreement was in view of the fact that the price of an agreement for the purposes of Article 85 spirits is the main element in the cost if 'its clauses amount to a faithful expression price of cognac. of the joint intention of the parties', and it infers that the circumstances in which prices were fixed in the present case amounted to As regards the effect on trade between 'agreements' and, in the light of the Member States, the Commission states that aforesaid judgment of the Court in Case the Court held that 'the fact that a price- 71/74, 'agreements between undertakings' fixing agreement' covers only 'the marketing for the purposes of Article 85 (1). of products in a single Member State does not rule out the possibility that trade between Member States may be affected' 2.3.4. As regards the third question, the (judgment of 26 November 1975 in Case Commission considers that the problem 73/74 Groupement des Fabricants de Papiers raised is not so much whether there is a Peints de Belgique and Others v Commission restriction on competition, which is [1975] ECR 1491, at para. 25). indisputable, but whether the restriction falls within the scope of Community law.

JUDGMENT OF 30. 1. 1985 — CASE 123/83

intra-Community trade does or does not (3) An agreement or decision by an have special characteristics which distinguish association of undertakings which fixes it, as regards consumption or from any a minimum price is intended to restrict other point of view, from other products competition within the meaning of which may be similar. Article 85 (1) of the Treaty. Such an agreement or decision may affect trade between Member States if, although the 2.3.5. The Commission therefore proposes product in question is not marketed in the following answers to the questions put other Member States, it is an ingredient to the Court: in a finished product which is the subject of intra-Community trade, so that its price has a significant effect on '(1) An agreement, concluded within an the sale price of the finished product.' inter-trade organization between rep­ resentatives of the' trades concerned with the intentioni in particular of fixing 3. Oral procedure prices falls within ¡the. term "decision by associations of undertakings' in Article At the hearing on 26 June 1984, the Board, 85 (1) of the Treaty. The fact that the represented by X. de Roux, Avocat, G. agreement is made generally binding by Clair, represented by P. Kappelhoff-Lançon, a decision of the public authority in Avocat, and the Commission of the application of the rules of national law European Communities, represented by G. cannot affect its status under Marenco and N. Coutrelis, acting as Community law. Agents, presented oral argument and answered questions put by the Court.

'The Bureau national interprofessionnel du cognac shall be composed of:

(a) Two persons, one representing wine-growers and the other representing dealers in the area defined by the Decree of 1 May 1909;

(b) Upon submission of lists drawn up by the trade organizations concerned:

19 delegates of wine-growers and distilling co-operatives; 19 delegates of dealers and commercial distillers; A delegate from the Syndicat des Vins Vines [Association for wines fortified for distillation]; A delegate of the producers of Pineau des Charentes; A delegate of the brokers; A delegate for ancillary industries; A delegate of the executive and managerial staff (trade) ; A delegate of workers in cognac cellars; A viticultural technician; A vineyard worker.

No person carrying on the trade of a dealer, broker, distiller or any related trade shall represent producers and vice versa.

Members of the Board shall be appointed for three years by Order of the Minister for Agriculture. Their mandate shall be renewable.

6 According to the aforesaid Article 5, in conjunction with Article 2, upon a request by the general meeting of the Board, the agreement may be made generally binding by ministerial order. The effect of this is that the agreement becomes binding on all members of the trades making up the trade organization.

7 According to Article 4 of the above-mentioned Law, a contract of supply between private persons which does not comply with the provisions of an agreement that has been adopted and made generally binding is automatically void, and the inter- trade organization concerned may seek a declaration to that effect from the appropriate court and also claim compensation for any damage it may have suffered.

8 In accordance with the aforesaid provisions and procedure, the Board unanimously adopted on 7 November 1980 an agreement entitled 'Inter-trade Agreement relating to the prices of distillable white wines and cognac'. The agreement, which provided that it was to apply throughout the whole of metropolitan France, fixed a minimum price for wines for distillation, the price of potable spirits distilled in 1980 and earlier years, and a minimum price for cognac. It provided that any contract concluded in breach of its provisions would be void and that the penalties provided for in Article 4 of the aforesaid Law of 10 July 1975 would apply. It was signed by the representatives of the two groups at a meeting of the Board and by the Board's director and was made generally binding by an Order issued by the Minister for Agriculture on 17 November 1980.

'(1) Since the wine-growers' group and the dealers' group are both represented within the Bureau National Interprofessionnel du Cognac, are they to be regarded as an association of undertakings, having regard to the fact that the agreement reached between them was also signed by the Chairman of the Bureau?

(2) Must the fixing by the wine-growers' group and the dealers' group of a minimum purchase price for potable spirits be regarded as a concerted practice?

(3) Must the fixing of a minimum purchase price for potable spirits be regarded as capable of affecting trade between Member States and as having as its effect or purpose the prevention, restriction or distortion of competition

JUDGMENT OF 30. 1. 1985 — CASE 123/83

within the Common Market, in the light of the fact that the potable spirits referred to in the agreement of 7 November 1980 conform to the requirements for the registered designation of origin for cognac and that cognac distilled from grapes is consumed undiluted almost without exception?'

First question

BNIC / CLAIR

17 That argument cannot be accepted. Article 85 states that it applies to agreements between undertakings and decisions by associations of undertakings. As the defendant in the main proceedings and the Commission have rightly observed, the legal framework within which such agreements are made and such decisions are taken and the classification given to that framework by the various national legal systems are irrelevant as far as the applicability of the Community rules on competition and in particular Article 85 of the Treaty are concerned.

18 The Board observes that the members who attended its general meeting and who negotiated and concluded the agreement in question were all appointed by the Minister for Agriculture. Thus they do not represent the various trade organ­ izations from which they come and the agreement made between them cannot be regarded as an agreement between associations of undertakings.

19 That argument cannot be accepted. Article 85 must be interpreted as covering such an agreement, since it was negotiated and concluded by persons who, although appointed by the public authorities, were, apart from the two appointed directly by the minister, proposed for appointment by the trade organizations directly concerned and who consequently must be regarded as in fact representing those organizations in the negotiation and conclusion of the agreement.

20 It must be added that an agreement made by two groups of traders, such as the wine-growers and dealers, must be regarded as an agreement between under­ takings or associations of undertakings. The fact that those groups meet within an organization such as the Board does not remove their agreement from the scope of Article 85 of the Treaty.

25 The fact that the chairman or director of a body within which an agreement intended to prevent free competition is concluded places his signature at the foot of the agreement, even though national law does not provide for such a signature, does not affect the applicability to the agreement of the provisions of Article 85 (1) of the Treaty .

26 It follows from the foregoing that the reply which must be given to the first question is that Article 85 (1) of the EEC Treaty must be taken to apply to an inter-trade agreement fixing a minimum price for a product such as cognac concluded by two groups of traders within the framework of, and in accordance with the procedures of, a body such as the Bureau National Interprofessionnel du Cognac .

Second question

27 The national court asks further whether the fixing of minimum prices for potable spirits must be regarded as a concerted practice for the purposes of Article 85. In view of the answer given to the first question, it is unnecessary to reply to the second question.

Third question

28 It appears from the documents before the Court and from the arguments presented at the hearing that the third question is concerned essentially with the fixing of prices for potable spirits used in the manufacture of cognac, that is to say an

On those grounds,

THE COURT,

in answer to the questions submitted to it by the Tribunal de Grande Instance, Saintes, by judgment of 21 June 1983, hereby rules:

JUDGMENT OF 30. 1. 1985 — CASE 123/83

1. Article 85 (1) of the EEC Treaty must be taken to apply to an inter-trade agreement fixing a minimum price for a product such as cognac concluded by two groups of traders within the framework of, and in accordance with the pro­ cedures of, a body such as the Bureau National Interprofessionnel du Cognac.

2. The fixing of a minimum price for an intermediate product is capable of affecting trade between Member States where that product constitutes the raw material for another product marketed elsewhere in the Community, irrespective of whether the finished product is protected by a registered designation of origin.