French competition authorities fined endive producer organisations (POs) and associations of producer organisations (APOs) almost €4 million in 2007 for anti-competitive practices, including working together to set the price of endives and agreeing the quantity of the vegetable to be placed onto the market.
However, the producers argued that they were only doing what was required of them under EU agricultural law, which tasks farmers with creating associations in order to stabilise prices and manage production against demand. Performing that task justified the practices, they said.
The French Court of Cassation has asked the Court of Justice of the EU (CJEU) to clarify the issue.
In a non-binding opinion in the case, advocate general Nils Wahl said that POs and APOs do have the general objectives of adjusting production to account for demand, reducing production costs and stabilising producer prices. In carrying out those tasks, they are effectively forums for collective concertation, he said.
As the objectives of the common agricultural policy take precedence over the objectives of competition under the Treaty on the Functioning of the European Union, some of the actions of the POs and APOs may escape the application of competition law, he said.
However, this only covers practices relating to tasks specifically assigned to the POs, APOs and any professional organisations in charge of marketing the products, and if the practices are adopted within one organisation.
If the practices take place between separate organisations they must be subject to competition law, as these are economic entities that are supposed to be independent, the advocate general said.
On the specifics of the endive market, advocate general Wahl said that a policy of fixing a minimum price between producers cannot escape the prohibition of anti-competitive agreements, decisions and concerted practices under EU law, whether that policy is determined between different POs / APOs, or within the same PO or APO.
Collaborating on the quantities placed on the market, where it is genuinely intended to regulate production and stabilise prices, may escape competition law, but cooperation between several organisations to limit and control quantities across the whole market and limit production over the long term does fall under competition rules, he said.
On the exchange of strategic information, the advocate general said that the tasks assigned to the POs and APOs necessarily involve exchanges of strategic information internally, with the result that the competition rules will generally not be applicable within a PO / APO. However, the communication of prices between POs, APOs and other competing entities, cannot be linked to these tasks and are therefore subject to the principle of the prohibition of anti-competitive agreements, decisions and concerted practices.
Opinions of advocates general are not binding on the court, but are followed in the majority of cases.