Luxembourg, 27/10/2000 (Agence Europe) - The European Court of First Instance (CFI) has annulled the three million euro fine that the European Commission had slapped on the Gayer group for having attempted to prevent the parallel export of its "Adalat" or "Adalate" medicines to the United Kingdom. The European Commission- which had condemned Bayer for an illegal concerted agreement between the German group and its wholesalers - failed to prove the existence of this agreement, says the Court. The fact that Bayer wholesalers should have willingly or unwillingly agreed to Bayer's new policy "does not amount to these wholesalers acquiescing to the policy", the Court explains.
Bayer had changed its policy when the German group noticed that in three years (1989 to 1993) its British subsidiary had suffered a DM 230 loss in its turnover. The origin lay in the pricing policy for medicines in the European Union, each Member State being free to set its prices directly or indirectly. From 1989 to 1993, prices foe Adalat in France and Spain were some 40% lower that the price practiced in the UK.
The Adalat brand in fact covers a wide range of medicines of which the main agent is nifedipin, intended to treat cardiovascular diseases. Some French and Spanish wholesalers that supply parallel importers had lodged complaints with the European Commission demanding that Bayer cease its new policy consisting in only supplying them for the local market (thus preventing them from supplying the British market).
The Commission demonstrated that one of these wholesalers, the French firm CERP Lorraine, had received an average from Bayer of between 50,000 and 70,000 boxes of Adalat between June 1991 and February 1992, only to receive 35,000 in September 1991, 15,000 over the next three months and only 7,500 in February 1992.
On 10 January 1996, the Commission adopted the decision that has just been annulled by the European judges. In it, it called on Bayer to alter its practice that it considered to be contrary to Community competition legislation, and inflicted the aforementioned fine.
In its ruling, the Court considers as established the fact that "the French and Spanish subsidiaries (of Bayer) had respectively imposed an export ban on French and Spanish wholesalers, that was put in place by identifying the exporter wholesalers and applying to them successive reductions of the volumes that they exported." However, having studied the facts at length, the Court considers that the Commission had "failed to prove that the wholesalers had wanted to pursue Bayer's objectives, or tried to make it believe so. On the contrary, the documents examined demonstrate that the wholesalers adopted a behaviour aimed at adjusting Bayer's new policy of delivery restrictions to the level of traditional orders".
It then concludes: "whence, the Commission was wrong to consider that the actual conduct of the wholesalers sufficiently proves in law their acquiescence of Bayer's policy aimed at preventing parallel imports".
The ban on impeding parallel imports/exports is not placed into question by the Court's ruling,
sources close to the European Commission underpin
Brussels, 27/10/2000 (Agence Europe) - The European Commission has not commented on the ruling of the Court of First Instance; first, an in-depth analysis is required. The spokesperson simply observed that this ruling in no way puts back into question the principle by which obstacles to "parallel" imports or exports (on the fringe of official distribution channels) are banned. The Court annulled the fine inflicted by the Commission for illegal concerted agreement, considering that the Commission had not provided proof of the existence of such an agreement between Bayer and the distributors.
One could deduce that it cannot be ruled out that Bayer's conduct could be penalised from another point of view, that of the free movement of goods. In theory, three paths are now open for the Commission: either not react to the ruling; or slap a fine on Bayer on a legal basis other than the ban on concerted agreements; or take the CFI's ruling to the Court of Justice.