December 14, 2006

EU court reduces fines on French beef industry associations

A European Union (EU) court reduced on Wednesday, Dec 13 the fines imposed on main French beef industry federations in 2003 for unlawful price-fixing and measures to block imports.

The European Court of First Instance upheld the European Commission's (EC) decision to fine the two abattoir groups and four farming groups for signing an agreement in October 2001 setting a minimum purchase price for certain categories of beef and suspending beef imports into France. The context was the falling price of beef in a secondary phase of the BSE crisis.

The EC considered it a serious offence as an infringement to a warning given in Nov 2001 continued until Jan 2002.

The court however, reduced the fines from the original EUR 16.68 million (US$ 22.05 million ) to 11.97 million (US$ 15.82 million) on the grounds that the EC had not sufficiently taken into account the exceptional circumstances at the time, which related to the outbreak of mad cow disease.

The beef industry associations brought proceedings before the Court of First Instance in a bid to annul or reduce the fines. They argued that the Commission had not proved its cartel findings, had made errors in setting the fines, and in any case had set the fines in excess of established guidelines.