T-231/99

JUDGMENT OF 21. 3. 2002 — CASE T-231/99

JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber) 21 March 2002 *

In Case T-231/99,

Colin Joynson, residing in Manchester (United Kingdom), represented by B. Bedford, Barrister, instructed by Messrs Ferdinand Kelly, Solicitors,

applicant,

v

Bass pic, established in London (United Kingdom), represented by M. Farquharson, J. Block and N. Green, Solicitors, with an address for service in Luxembourg,

intervener,

APPLICATION for annulment of Commission Decision 1999/473/EC of 16 June 1999 relating to a proceeding pursuant to Article 81 [EC] (Case IV/36.081/F3 — Bass) (OJ 1999 L 186, p. 1),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of: J. Azizi, President, K. Lenaerts and M. Jaeger, Judges,

Registrar: J. Palacio González, Administrator,

2 In June 1996 the Bass group owned some 4 182 public houses in the United Kingdom, of which 2 736 were managed by an employee of the group and 1 446 leased. In March 1997 the Bass group's leased estate comprised 1 430 pubs, including 106 in Scotland. Of those 1 430 pubs, 1 186 were let on standard leases, 178 on tenancies at will, and 42 on short-term foundation agreements, and the remaining 24 were let under other agreements or were unoccupied.

3 During 1998 the Bass group progressively sold a large part of its leased estate, retaining only about 20 pubs.

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4 The contractual relations between the Bass group and most of its tied lessees were governed by a standard lease, under which one of the companies in the Bass group made a licensed house available to the lessee, with the fixtures and fittings needed to operate it, in return for the payment of rent and an undertaking to buy the beers specified in the lease from Bass or a supplier designated by Bass.

5 The standard lease thus contained an exclusive purchasing obligation and a non-competition obligation.

Kingdom breweries. Following that inquiry, which related to Bass among others, the OFT in May 1995 adopted a report 'Inquiry into breweries' wholesale pricing policy in the United Kingdom' and issued a press release on that report on 16 May 1995.

9 On 11 June 1996, Bass Holdings Ltd and Bass Lease Company Ltd, wholly- owned subsidiaries of Bass, notified pursuant to Article 4 of Regulation No 17 of the Council of 6 February 1962, First Regulation implementing Articles [81] and [82] of the Treaty (OJ, English Special Edition 1959-1962, p. 87), the standard lease for a public house with an on-licence in England and Wales. They sought negative clearance or, failing that, confirmation by the Commission that the agreements could benefit from the application of Commission Regulation (EEC) No 1984/83 of 22 June 1983 on the application of Article [81(3)] of the Treaty to categories of exclusive purchasing agreements (OJ 1983 L 173, p. 5), as amended by Commission Regulation (EC) No 1582/97 of 30 July 1997 (OJ 1997 L 214, p. 27), or from an individual exemption under Article 81(3) EC, with retroactive effect from the date of conclusion of the agreements. Regulation No 1984/83 contains in Title II special provisions relating to beer supply agreements.

10 The Commission supplemented the information in the notification by carrying out a verification at Bass's premises in accordance with Article 14(2) of Regulation No 17, and by sending several requests for information. The Commission sought in particular confirmation of the data communicated by Bass.

1 4 Those were the circumstances in which the applicant on 12 October 1999 brought the present action.

15 By order of 13 April 2000 the President of the Third Chamber of the Court of First Instance granted the applicant legal aid.

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16 By order of 4 July 2000 the President of the Third Chamber of the Court of First Instance granted Bass leave to intervene in support of the form of order sought by the Commission.

17 Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Third Chamber) decided to open the oral procedure. The parties presented argument and answered the Court's oral questions at the hearing which took place in public on 26 April 2 0 0 1 .

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Admissibility

20 The Commission questions the applicant's interest in bringing proceedings, and Bass questions his capacity to bring proceedings.

1. Interest in bringing proceedings

Arguments of the parties

24 The supporting documents produced by the applicant during the procedure and the information obtained from him and the intervener show that he brought an action for damages against Bass in the English courts, seeking compensation for the damage allegedly suffered as a result of having been subjected in the standard lease, which was exempted by the Commission in the contested decision, to obligations contrary to Article 81 EC, and that the action is pending.

25 The applicant therefore retains a pecuniary and non-pecuniary interest in the outcome of the present proceedings notwithstanding the termination of the lease.

2. The applicant's capacity to bring proceedings

Arguments of the parties

26 to 27

Findings of the Court

31 Bass considers, however, that the action is nevertheless inadmissible, on the ground that for an individual party to challenge the validity of the decision granting an exemption to a standard agreement to which he is a party together with numerous other economic operators infringes the principle of legal certainty.

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32 It must be remembered that individuals derive from Community law a right to complete and effective judicial protection (order of the President of the Court of Justice in Case C-393/96 P(R) Antonissen v Council and Commission [1997] ECR 1-441, paragraph 36), and that it was intended, in the Treaty, to establish a complete system of judicial protection against acts of Community institutions which are capable of having legal effects (Case 302/87 Parliament v Council [1988] ECR 5615, paragraph 20).

33 That right of the individual would be deprived of substance if, despite being entitled, according to the conditions in the fourth paragraph of Article 230 EC, to bring an action for annulment against an act, he were unable to contest its validity, on the ground that, since that act also affected numerous other persons, the principle of legal certainty prevented it from being challenged.

37 The applicant submits that the contested decision is vitiated by manifest errors of assessment and lacks an adequate statement of reasons.

A — The plea of manifest errors of assessment

38 The applicant considers that the Commission made manifest errors of assessment as regards the failure to take sufficient account of the profitability of Bass tied houses and the assessment of the price differential, rent subsidy and certain other countervailing benefits.

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1. Failure to take sufficient account of the effect of the standard leases on the profitability of Bass tied houses

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42 It said that the application of these considerations to the standard leases meant, in the context of the United Kingdom on-trade beer market, that a tied lessee faced with unjustified price differentials might not be in a position to compete on equal terms. All other conditions being similar, his business would be less profitable than that of his competitors, or even unprofitable (point 176 of the contested decision).

43 It then said, however, that unjustified price discrimination has an appreciable negative impact on the competitiveness of the tied lessee, and affects the assessment of a lack of improvement in distribution, only if it is significant and lasts for a long time (point 177 of the contested decision).

47 In recital 5 in the preamble to Regulation N o 1984/83, the Commission states that exclusive purchasing agreements generally lead to an improvement in distribution, since they enable the supplier to plan the sales of his goods with greater precision and for a longer period and ensure that the reseller's requirements will be met on a regular basis for the duration of the agreement, thus allowing the undertakings concerned to limit the risk of variations in market conditions and to lower distribution costs.

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increases the number of options for entry to the market (point 168 of the contested decision).

50 It follows that the Bass standard leases in principle have the effect of improving distribution. That is the basis on which to assess the question raised by the applicant as to the impact of the system of Bass standard leases on the profitability of that brewery's tied houses. That question of profitability would be relevant only in so far as the alleged impact were such as to block the materialisation of the benefits described above. That would be the case only if the profitability of the Bass tied houses was so poor that their capacity to distribute beer was in doubt. As long as tied houses are not seriously affected in their capacity to distribute beer, the benefits in question continue to exist. Profitability is therefore relevant only to the extent that it may threaten that capacity.

51 The Commission thus correctly took care to take the profitability of Bass tied houses into consideration only in so far as it was so poor that it threatened the capacity of tied houses to distribute beer. It was therefore right to state that, while deliberate price discrimination may prevent tied lessees from being in a position to compete on equal terms and, other things being equal, make their businesses less profitable than those of their competitors, not all discrimination is to be taken into consideration. As it stated at point 177 of the contested decision, only unjustified discrimination which is substantial and long-lasting and so has an appreciable negative effect on the competitiveness of the tied lessee is capable of affecting the positive assessment of the beer supply agreement in terms of improvement in distribution.

56 In the first place, that position taken by the Commission is based on Regulation N o 1984/83, to which it correctly referred.

57 The standard leases of Bass could not benefit from the block exemption defined by Regulation N o 1984/83 but were the subject of an individual exemption

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because, contrary to the conditions required by Article 6 of the regulation, they laid down a specification of the beer purchasing obligation by type of beer and not by brand or name (points 165 to 167 of the contested decision). The exclusion of block exemption for agreements containing a clause of that type is justified in recital 18 in the preamble to Regulation N o 1984/83, in addition to the concern to preserve the economic freedom of the reseller, by the concern to preserve the access of other suppliers at retail level. In its assessment of the Bass leases with a view to the grant of an individual exemption, the Commission observed, however, at point 171 of the contested decision, that, having regard to the particular features of the United Kingdom on-trade beer market and to the specific conduct of Bass, that clause constituted a more effective possibility of implementing the exclusive purchasing agreements for beer in the United Kingdom than the specification provided for in Regulation No 1984/83, and that it makes it possible precisely to preserve the access to the market of foreign or United Kingdom brewers better than the specification of the beer tie by brand or name required by Regulation N o 1984/83.

58 The principal ground for excluding beer supply agreements containing a specification of the purchasing obligation by type of beer from benefiting from the block exemption provided for by Regulation N o 1984/83 thus required, in the present case, recourse to that clause. It follows that the Bass standard leases fail to comply with the conditions of Regulation No 1984/83 solely because of a purely technical matter which does not, however, prevent those agreements from complying with the spirit of that regulation.

62 Regulation N o 1984/83 does not, on the other hand, envisage the case of beer supply agreements which, for structural reasons peculiar to those agreements, provide tied lessees with a profitability so poor that the Commission should withdraw the benefit of the exemption. That regulation, in stating the various benefits produced by exclusive purchasing agreements in general (recitals 5 to 7) and beer supply agreements in particular (recitals 14 to 17), necessarily presumes that those agreements do not, structurally, have the effect of reducing the profitability of resellers' businesses to such a point that those benefits are called into question.

63 In the second place, the position adopted by the Commission is based on factors specific to the United Kingdom on-trade beer market which were analysed in the contested decision.

64 It follows from the contested decision that an economic operator who wishes to enter at retail level in the United Kingdom the market of alcoholic drinks for consumption on the premises does not only have the possibility of operating a pub belonging to a brewery. His other possibilities are of becoming the manager

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of a pub belonging to a brewery or pub company, and being the owner of his own pub, which may or may not be tied to a brewery in return for a favourable loan (point 168 of the contested decision). Those options are not merely theoretical, since managed pubs belonging to breweries and pub companies distributed, in 1997, 2 5 . 5 % of the beer consumed in on-licensed premises in the United Kingdom (point 26 of the contested decision, Table 2, columns (b) and (d)) and individually owned pubs, whether or not loan-tied to a brewery, sold 5 3 . 1 % (point 26 of the contested decision, Table 2, columns (e) and (f)). Moreover, according to the findings of the Commission, the barriers to entry at retail level are relatively limited (point 36 of the contested decision).

68 The applicant criticises, first, the Commission's definition of the price differential and, second, the definition of the reference group used to measure that differential.

(a) Definition of the price differential

69 The Commission observed, at point 60 of the contested decision, that operators of pubs who are not tied to an undertaking by exclusive beer purchasing obligations can in the United Kingdom obtain discounts on the beer they purchase, whereas operators of tied houses do not have that possibility. On the basis of that finding, it defined the price differential, at point 61 of the contested decision, as the difference between the average discounts in pounds sterling per barrel given by Bass to operators of free houses and the discounts given to tied lessees. Using that definition, it determined that the price differential, which was GBP 19 per barrel in 1990/91, increased progressively to GBP 48 per barrel in 1996/97 (point 108 of the contested decision, Table 3).

— Arguments of the parties

to 73 [...]

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used, which are averages. Moreover, the price differential, as defined at point 60 of the contested decision, is the difference between the discounts given by Bass to individual free house operators and those given to its tied lessees, whereas the figures put forward by the applicant relate to a discount calculated on the basis of the sales of the various breweries present in the market.

(b) Determination of the reference group

78 The Commission stated, at point 178 of the contested decision, that discounts are 'granted to all operators in the United Kingdom on-trade drinks market who have not concluded contracts with an exclusive purchasing obligation and who obtain supplies from Bass, namely wholesalers, pub companies, other breweries and individual free house operators. Moreover, the discounts granted to wholesalers, the brewery's own managed houses, pub companies and other breweries are on average higher than those granted to individual free house operators.

79 However, in assessing those discounts in the context of the comparison with the position of Bass tied lessees, it took into account only those granted to individual free house operators. It justified that restriction of the scope of the comparison by reference to Article 14(c)(2) of Regulation N o 1984/83, which provides that the Commission may withdraw the benefit of the application of that regulation if it finds, in a particular case, that an agreement exempted under the regulation nevertheless has effects incompatible with the conditions of Article 81(3) EC, in particular where the supplier without any objectively justified reason applies to a reseller bound by the exclusive purchasing agreement prices which are less favourable than those he applies to other resellers 'at the same level of distribution'.

83 It was observed in paragraph 61 above that the Commission was right to refer, in the context of examining the possibility of granting an individual exemption, to the framework of analysis provided by Regulation N o 1984/83. Article 14(c)(2) of Regulation N o 1984/83 refers to the case, relevant here, of a supplier who without any objectively justified reason applies to a reseller bound by the exclusive purchasing agreement prices which are less favourable than those he charges other resellers. That provision specifies that the other resellers are those who are at the same level of distribution.

84 In the present case, individual free house operators, who constitute the reference group used, are the only operators at the same level of distribution as Bass tied lessees, so that a reliable comparison with the latter may be made.

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85 It is common ground that the discounts given by Bass are larger if the quantity of beer purchased is larger. From that point of view, only individual free house operators are in a comparable situation to Bass tied lessees, since they, like the latter, are retailers who obtain supplies individually from Bass. By contrast, the supply of beer produced by Bass to pubs operated by pub companies or other breweries is done collectively for the entire pub chain or brewery. It follows that the quantities of beer thus ordered are much larger than those ordered by independent free house operators, and that the price discounts given by Bass on those collective orders are consequently higher than those given on orders from individual free house operators.

ratio for tied houses and the rent/turnover ratio for free houses. It made the following assumptions:

— for non-tied houses, the rent was assumed to be 1 5 % of turnover;

— for tied houses, the rent was equal to 11.36% of turnover.

89 On that basis, it calculated the rent subsidy as follows: after determining the figure for 1 5 % of the turnover of the tied houses, it subtracted from that figure 11.36% of the turnover in question, and then divided the resulting figure by the total number of barrels sold by Bass to its tied houses.

90 The results of that calculation are given in Table 3 at point 108 of the contested decision. It thus appears that the rent subsidy was GBP 16 per barrel in 1990/91, GBP 15 per barrel in 1991/92, GBP 19 per barrel in 1992/93, GBP 23 per barrel in 1993/94, GBP 22 per barrel in 1994/95, GBP 22 per barrel in 1995/96 and GBP 24 per barrel in 1996/97. The rent subsidy is the largest countervailing benefit.

91 The applicant criticises the Commission's calculation of the rent subsidy as regards, first, the calculation method used, namely the rent/turnover method, and, second, the implementation of that method, namely the assessment of the rent of free houses as 1 5 % of turnover.

97 That argument of the applicant assumes also that it is relevant to assess, from the point of view of the condition of improvement in distribution, whether the system of Bass standard leases prevents, for structural reasons, tied lessees from having equivalent profitability to their competitors.

98 It has already been observed that, from the point of view of that condition, it was not relevant to carry out that assessment, and that there also were no sufficient reasons, apart from the case of deliberate price discrimination which was duly II-2116

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analysed by the Commission, for assessing the only question which might have been relevant, but was different, namely whether the system of Bass standard leases reduced the profitability of Bass tied houses so much that their capacity of distributing beer was seriously affected.

99 The applicant's criticism is therefore of no relevance.

100 As to the applicant's argument that the alternative method suggested enables a better assessment to be made of the profitability of pubs tied to Bass because it takes into account the cost structure of those houses, it must be observed that the applicant has not averred, and a fortiori has not shown, that the cost structure of tied houses differs from that of free houses in matters other than the price differential and countervailing benefits found. Those matters were taken into account by the Commission.

— Arguments of the parties

104 to 113 ...

— Findings of the Court

1 1 4 On the assumption that the method for calculating the rent subsidy on the basis of the rent/turnover ratio may be accepted, the applicant observes that the Commission used a reference rent for free houses equal to 1 5 % of turnover. He says that that estimate could relate only to successful pubs and, from the point of view of determining the open market rent, there is no common measure between a flourishing pub and one performing less well.

1 1 5On this point, it must be observed that the fact that some public houses perform less well than others may be attributable essentially to the publican's inability to bring about the performance the pub could reasonably achieve, or to structural

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us The applicant submits, however, that that ratio must not remain fixed and must- change according to the amount of turnover. The assessment of a rent at 15% of turnover, as done by the Commission, applies only to very well performing pubs, which excludes Bass tied houses.

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119 He adduces two arguments on this point.

120 As regards the first argument, he refers to the Scottish and Newcastle decision, in which the Commission, following reasoning similar to that applied in the contested decision, granted an individual exemption to the standard leases of the United Kingdom brewery Scottish and Newcastle. In the decision concerning that brewery, the Commission likewise calculated a rent subsidy, taking for that purpose a rent equal to 1 5 % of turnover for free houses, as in the contested decision.

121 It justified that estimate by stating in particular, at point 71 of the Scottish and Newcastle decision, that that brewery had informed it by letter of 22 April 1998 that during that year it had released some 184 pubs from the tie within the space of six weeks in order to comply with the provisions of the Beer Orders enacted by the United Kingdom authorities, that having entailed negotiations for the purpose of determining new rents. The Commission found that the average rent increase following those negotiations had been about 1 8 % , compared to the rent previously applicable to the tied houses, so that the rent/turnover ratio was of the order of 14.6%. It added that the brewery considered that if there had been more time for negotiations, the rent would have been higher. In the same decision, at point 65, it calculated the rent/turnover ratio of Scottish and Newcastle tied houses at 12.59%.

125 The appropriateness of the Commission's adoption in the contested decision of the rent/turnover ratio of 1 5 % for Bass tied houses is not called into question by the mere fact that those pubs perform less well than those of Scottish and

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Newcastle. On the basis of the ratio in question, that less good performance, in the form of a lower turnover, is reflected in a lower nominal rent. The method used by the Commission takes account of variations in turnover. On the other hand, the difference in performance between Bass and Scottish and Newcastle tied houses does not in itself justify, besides a variation in the nominal amount of rent, a change of the ratio between the turnover and the rent.

1 2 6The applicant's argument is therefore relevant only on the basis of the premiss he advances, namely that pubs with a lower turnover cannot be compared to pubs which perform better and that their rent/turnover ratio is lower. However, the argument produces nothing to show that that premiss is well founded.

127 The first argument is thus irrelevant and must therefore be rejected.

1 3 1Thus in the first report the expert assesses at GBP 94 000 the gross profit of a pub with a turnover corresponding to annual sales of 260 barrels of beer. In the second report he assesses at GBP 87 700, in other words a lower figure than that in the first report, the gross profit of a pub with a turnover corresponding to sales of 275 barrels of beer a year (the figure of GBP 87 700 derives from subtracting the costs of sale (GBP 89 700) from the sales (GBP 177 400)). Similarly, in the first report, the gross profit of a pub with a turnover corresponding to sales of 360 barrels of beer a year is estimated at GBP 134 000, whereas in the second report that of a pub with a higher turnover corresponding, for example, to sales of 375 barrels a year is estimated at a lower figure, GBP 119 500, that figure being obtained in the same way as the one indicated above.

132 Moreover, in the second report, the expert distinguishes, in assessing costs, between those regarded as fixed whatever the turnover of the pub, estimated at

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GBP 50 000, and those which vary according to the amount of the pub's turnover, estimated at GBP 8 900 for a pub with a turnover corresponding to sales of 275 barrels of beer a year and GBP 12 100 for a pub with a turnover corresponding to sales of 375 barrels a year.

133 That assessment raises questions as to whether proper account has been taken of staff costs. In the first report, those costs were estimated at GBP 24 500 for a pub with a turnover corresponding to sales of 310 barrels of beer a year. In the same way as in the second report, the costs varying according to the amount of turnover were assessed as being in the range of GBP 8 900 to GBP 12 100 and fixed costs at GBP 50 000. Staff costs are included under fixed costs in the second report. The Commission rightly points out that it does not appear realistic to consider that staff costs are the same whatever the size of the pub, whether that pub has a turnover corresponding to annual sales of 275 or 375 barrels, as the second report contemplates.

137 Those conclusions are not therefore capable of establishing that the Commission made a manifest error of assessment by considering that rents of free houses correspond in general to 1 5 % of turnover. That estimate is moreover based on solid foundations, set out at point 73 of the contested decision. The Commission observed there that it followed from the facts presented to the OFT that 'free houses pay 2 to 3 percentage points more of their turnover in rent than the tied tenants of brewers and that in the free trade rent equivalents amounted to between 14% and 1 5 % of turnover'. It added that this enabled the OFT in its report to base its calculation of the rent subsidy on the difference between the actual rent paid by the tied lessees and the rent of free houses estimated at 14% to 1 5 % of turnover.

1 3 8The applicant questions the credibility of the OFT report, referring to a speech made in June 1996 by the OFT's assistant director of legal affairs, in which he said that the OFT had completed its study in three months and was aware that the conclusions of the inquiry were heavily dependent on the nature of the data received and the assumptions made in interpreting the data.

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139 It must be stated here that, in the context of that speech, the assistant director's comment relates not to the question of assessing the rents of free houses but to the much more general question of assessing the effect on competition of beer supply agreements in view of the existence of price differentials. The comment is thus not in itself capable of casting doubt on the factors taken into consideration by the OFT and the correctness of the calculations it carried out.

1 4 4It follows that it has also not been shown that the Commission made a manifest error of assessment by omitting to have an expert valuation made of the rent, expressed as a percentage of turnover, which would have been generated by the Bass tied houses it used as a sample if they had been free houses.

145 The applicant's argument must therefore be rejected.

4. The assessment of other countervailing benefits

1 4 6 At points 76 to 108 of the contested decision, the Commission rehearsed and evaluated, in addition to the rent subsidy, other benefits which could compensate for the price differential. These are value added services, investment, repairs, financial support, direct operational support, contribution to set-up and development costs, and promotions.

1 4 7The applicant criticises, first, the fact that the Commission took account of benefits which were not based on contractual obligations of Bass and, second, the Commission's assessment of those benefits.

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151 The applicant's argument must therefore be rejected. II - 2128

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(b) The assessment of certain countervailing benefits

— Arguments of the parties to 153 ...

— Findings of the Court

154 As regards the admissibility of the submissions relating to the reasoning in the contested decision concerning the value added services, the 'support franchise' system and the benefit of promotions, it must be pointed out that under the first- paragraph of Article 19 of the EC Statute of the Court of Justice and Article 44(1) of the Rules of Procedure of the Court of First Instance the application initiating the proceedings must contain a summary of the pleas in law relied on. Since that requirement is mandatory, the issue of compliance with it- may be raised by the Court of its own motion. The summary of the pleas relied on, it should be pointed out, must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary without any other supporting information. Similar requirements are called for where a submission is made in support of a plea in law (see, for example, Case T-352/94 Mo och Domsjö v Commission [1998] ECR II-1989, paragraph 333). In order to guarantee legal certainty and sound administration of justice it is necessary, in order for an action to be admissible, that the basic legal and factual particulars relied on are indicated, at least in summary form, coherently and intelligibly in the text of the application itself (see, for example, the order in Case T-145/98 ADT Projekt v Commission [2000] ECR 11-387, paragraph 66). While the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed to it, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law which, in accordance with the above provisions, must appear in the application (order in Case T-154/98 Asia Motor

156 As regards the admissibility of the substance concerning direct operational support, which was put forward for the first time at the reply stage, it must be noted that it follows from Article 44(1)(c) in conjunction with Article 48(2) of the Rules of Procedure that the application must state the subject-matter of the proceedings and a summary of the pleas in law relied on, and that the introduction of a new plea in law in the course of proceedings is not allowed unless it is based on matters of law or of fact which come to light in the course of the procedure. However, a plea which constitutes an amplification of a submission previously made, either expressly or by implication, in the original application and is closely linked to it must be declared admissible (see, for example, Case T-37/89 Känning v Parliament [1990] ECR II-463, paragraph 38). The same applies to a submission made in support of a plea in law.

157 In the present case, the new submission disputing the countervailing benefit constituted by direct operational support, which is moreover presented very briefly, is not based on new matters which have come to light in the course of the procedure. N o r is it an amplification of a submission previously made, expressly or by implication, in the application and closely linked to the application.

158 It must therefore be declared inadmissible.

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159 It follows from all the foregoing that the plea must be rejected.

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165 The requirement to state reasons must be assessed in relation to the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations (Case T-198/98 Micro Leader v Commission [1999] ECR 11-3989, paragraph 40). It is not necessary for the reasoning to go into every relevant point of fact and law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (Germany v Commission, paragraph 97).

166 In particular, the Commission cannot be required to discuss all the matters of fact and law which may have been dealt with during the administrative procedure (Joined Cases C-241/91 P and C-242/91 P RTE and ITP v Commission [1995] ECR I-743, paragraph 99). The Commission is not obliged to adopt a position on all the arguments relied on by the parties concerned in support of their request, and need only set out the facts and legal considerations having decisive importance for the structure of the decision (Case T-5/97 Industrie des poudres spbériques v Commission [2000] ECR II-3755, paragraph 199).

167 As regards the alleged inadequate statement of reasons for the rejection, in connection with the assessment of the rent subsidy, of the observations submitted in the administrative procedure by the applicant and the accountant he had instructed, it must be observed that the object of those observations was essentially to criticise the used of the rent/turnover method adopted by the Commission and to advocate the use of the rent/net profit method. In that regard, it is sufficient to observe that the Commission examined, at points 68 to 72 of the contested decision, the merits of observations by an accountant and some lessees who 'consider that, in practice, rents are determined by an expert valuer on the basis of 5 0 % of the divisible balance, namely the net profit' and claim that 'the

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decision, justified the choice of that method from the point of view of the criticism made by lessees as to the pertinence of the method based on a rent/net profit ratio.

171 In those circumstances, bearing in mind also what has been stated above on the complaint of failure to take into consideration the similar observations made by the applicant in the administrative procedure, it cannot validly be maintained that the Commission did not give sufficient reasons for its choice for calculating the rent subsidy of the method based on the rent/turnover ratio rather than that based on the rent/net profit ratio.

172 The applicant further considers that the Commission did not give adequate reasons, at point 65 of the contested decision, for its assessment of the reference rent of Bass tied houses at 11.36% of turnover. According to the applicant, adequate reasoning on that point would have involved mentioning the total turnover of the houses tied to Bass, the total number of tied houses and the total letting income from all the tied houses.

173 On this point, it must be observed that the Commission stated, at point 65 of the contested decision, that the figure of 11.36% came from internal documents of Bass, mostly compiled in preparation for rent or rent review negotiations, for a random sample of 30 pubs chosen by the Commission. It said that those documents included individual estimates of the turnover of each pub, from which the average rent/turnover ratio was calculated. The Commission thereby indicated, summarily but in a clear and consistent manner, the criteria on the basis of which the figure of 11.36% was reached. The reasoning in question is thus adequate.

177 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. Since the applicant has been unsuccessful, he must be ordered to pay the costs as applied for by the defendant.

178 Under the third subparagraph of Article 87(4) of the Rules of Procedure, the intervener shall bear its own costs.

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On those grounds,

THE COURT OF FIRST INSTANCE (Third Chamber),

H.Jung M. Jaeger

Registrar President

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JOYNSON v COMMISSION

Table of contents

Facts of the dispute II - 2092

2. The applicant's capacity to bring proceedings II - 2098

Arguments of the parties II- 2098

Findings of the Court II -2098

Substance II-2101

A — The plea of manifest errors of assessment II-2101

1. Failure to take sufficient account of the effect of the standard leases on the profitability of Bass tied houses II - 2102

(b) Determination of the reference group 11-2112

— Arguments of the parties II - 2113

— Findings of the Court II-2113

3. Calculation of the rent subsidy II -2114

(a) The complaint as to the choice of the rent/turnover method II-2116

— Arguments of the parties II-2116