The court considered a petrol station agreement under which the operator of the station agreed to take fuel from a single supplier. The agreement was for 10 years and thereafter the operator could terminate the agreement by giving a year’s notice. Neste acquired the supplier and after the 10-year period had expired the operator stopped purchasing fuel from Neste without giving the one-year notice. Neste recovered possession of the station and sought compensation. The operator contended that the exclusive purchasing obligation was void.
Held: An exclusive purchasing agreement for fuel differs from one for other products such as beer or ice cream in that only one brand of fuel is sold in a petrol station and duration rather than the exclusivity clause was the decisive factor in the market-sealing affect. Another feature supporting a notice period of a year as reasonably protecting the interests of both parties and limiting the restrictive effect of the contract on competition in the relevant market. In those circumstances, when the contracts which might be terminated on one year’s notice represented only a very small proportion of all the exclusive purchasing agreements entered into by a supplier, they made no significant contribution to the cumulative effect and so were not within Art. 81 (1). ‘A relatively short notice period in certain retail markets, like those for ice cream and beer where there is far greater product differentiation than in the retail petroleum-fuels supply market, could still contribute to a not insignificant degree to an overall tying-in effect flowing from a major supplier’s network of agreements. However, if, at the time a dispute arises, the agreements in question give resellers a virtually unrestricted opportunity, without being subject to penalties on existing loans or any other disguised termination disincentives, to switch suppliers, it is difficult to conceive of any adverse effect on competition on the relevant market flowing from them.’
Judges:
Advocate-General Fennelly
Citations:
C-214/99, [2001] 4 CMLR 993, [2000] EUECJ C-214/99
Links:
Citing:
Cited – Stergios Delimitis v Henninger Brau AG ECJ 28-Feb-1991
ECJ A beer supply agreement is prohibited by Article 85(1) of the EEC Treaty if two cumulative conditions are met. The first is that, having regard to the economic and legal context of the agreement at issue, it . .
Cited by:
Cited – Crehan v Inntrepreneur Pub Company (CPC) CA 21-May-2004
The claimant had taken two leases, but had been made subject to beer ties with the defendant. He claimed damages for the losses, saying he had been forced to pay higher prices than those allowed to non-tied houses, and that the agreement was . .
Lists of cited by and citing cases may be incomplete.
European, Commercial
Updated: 04 June 2022; Ref: scu.162664