Irish Competition Authority Decisions

1. Notification was made by Irish Seafood Producers Group Ltd (ISPG) on 13 May 1992 with a request for a certificate under Section 4(4) of the Competition Act, 1991 or, in the event of a refusal by the Competition Authority to grant a certificate, a licence under Section 4(2) in respect of a standard agency agreement between ISPG and certain producers of farmed salmon and sea reared trout. A Statement of Objections was issued on 11 September 1995 and a further submission was made by ISPG.

2. The notification concerns exclusive marketing agency agreements whereby a number of producers of farmed salmon and sea trout have appointed ISPG to act as an undisclosed agent on their behalf for the purpose of marketing, selling and distributing fish products.

3. ISPG was established in 1985 by 7 farmed salmon producers with the support of the National Enterprise Agency (NEA - which was succeeded by Nadcorp in 1986) as the Irish Salmon Producers Group Limited but changed its name in March 1992 to Irish Seafood Producers Group Limited. In 1987 ISPG was recognised by the EU Commission as a "producers' organisation" for the purposes of EU Council Regulation 3796/81 [1] on the Common Organisation of the Market in Fishery Products.

4. Prior to 1990, the shareholders in ISPG consisted of 7 producer members (Curraun, Emerald, Camus, Muirgheal, Ardbear, Bradan Mara and Tully Mountain) each holding 5,100 ordinary shares of £1 each with Nadcorp holding a further 30,000. The shares held by Nadcorp were subsequently transferred to Udaras na Gaeltachta. Ardbear and Camus ceased production while Bradan Mara and Tully Mountain were taken over by Carrolls Seafood Ireland Ltd (now Gaelic Seafoods) which established its own marketing division. In February 1990 Salmara became a member of the company. Following the issue of further shares, and further changes in shareholdings, by 30 June 1991 the issued share capital of ISPG was £362,230 made up of 361,900 ordinary shares of £1 each and 32,988 Convertible Preference shares of 1p each. The holders of the £1 ordinary shares at that time were as follows:-

Nadcorp 76,100 ( 21%)

Curraun Fisheries Ltd 5,815 ( 1.6%)

Muirgheal Teo 60,849 (16.8%)

Emerald Fisheries 60,849 (16.8%)

Salmara Fisheries Ltd 132,987 (36.7%)

Nominee 15,300 ( 4.2%)

3 ISPG executive directors 10,000 ( 2.8%)

Total ordinary share capital £ 361,900 100 %

Note 1 : The shares held by the nominee were originally held by founder members of ISPG viz. Ardbear, Bradan Mara and Tully Mountain( 5,100 each). As these companies had ceased production or had been taken over, ISPG was entitled to call on those companies to sell the shares to other members but deferred this.

Note 2 : The 3 ISPG executive directors hold all the 1p convertible preference shares which are convertible to £1 ordinary shares if certain performance targets are reached. The conversion rights have now lapsed.

5. On 14 August 1990 the then shareholders concluded a shareholders agreement between themselves and the company to provide for the issue of further shares and for the purpose of regulating the conduct of the business and affairs of the company. The operation of ISPG is governed therefore by this agreement as well as the company's Articles and Memorandum of Association.

6. At the time of notification of the standard agreement ISPG had agency agreements with 9 farmed salmon or trout producer companies of which 4 were producer members of the company. By 1994 there were 11 agency agreements with producers, of whom 5 were producer members of ISPG. The supply sources to ISPG broken down between producer members and non-members in 1993 and 1994, with volumes shown in tonnes, were as follows:

1993 1994

Salamara 3,999 (73%) 4,513 (61%)

Other producer members 997 (18%) 1,474 (20%)

Other producers 502 ( 9%) 1,434 (19%) ___________ ___________

5,498 7,421

Sales of trout by ISPG in 1994 amounted to 526 tonnes of which 3% was supplied by producer members. Collectively producer members held 72% of ISPG's equity in 1991 but by February 1995 this had reduced to 57%. Salmara, by far the largest producer, held 36% of the equity in ISPG in February 1995. Salmara, which was a wholly owned subsidiary of the ESB, sold its fish farms to other producers in February 1995 i.e. three to Gaelic Seafoods and one to Ocean Farm Ltd. These latter companies operate their own marketing and do not have agency agreements with ISPG.

7. The products with which the notified arrangements are concerned are farmed salmon and sea reared trout. Farmed salmon is produced in a number of stages over 3 years from hatcheries to smolt production units to the rearing cages at sea where the salmon are harvested. There are 22 marine salmon and trout farming enterprises operating at 34 sites within the State, mainly along the south-west, west and north-west coasts. Production of Irish farmed salmon and the volume of this production marketed by ISPG in recent years was as follows:

Total Production Volume marketed ISPG share

1991 9,300 t (£30.3m) 3,067 t 33%

1992 9,700 t (£30.4m) 4,036 t 42%

1993 12,366 t (£39.1m) 5,498 t 45%

1994 13,086 t (£40.8m) 7,421 t 57%

In 1991 ISPG companies accounted for 33% of output. By 1994 ISPG companies were accounting for around 57% of output, or 22% if the Salmara output (whose farms were acquired in February 1995 by companies which do their own marketing) was excluded.

8. The relevant product market is considered to be that for salmon. The arrangements also have implications for sea trout but as this market is comparatively small, it is not dealt with separately. About two thirds of Irish farmed salmon production is exported primarily to continental Europe but also to the UK, USA and Asia. Irish exports of salmon, including wild salmon, were 10,286 tonnes (£33.2m) in 1994. European production of farmed salmon in 1994 was estimated at 300,000 tonnes with Norway holding 69%, the UK 20%, and Ireland and the Faroe Islands each having 5% . Irish imports of salmon were 487 tonnes (£1.7m) in 1994.

9. The Irish market for farmed salmon is estimated at over 4,000 tonnes (£14m) annually. As well as retail sales this market also includes sales to other processors such as smoked salmon producers. Over 75% of sales by ISPG are on the export market. Of the product marketed domestically, ISPG estimated that one half of this is subsequently exported in a processed form, i.e. as smoked salmon products. ISPG supplies approximately 20 Irish companies engaged in salmon smoking.

10. The price for product sold by ISPG is influenced almost exclusively by trends in export markets. In the case of the retail/catering market, prices vary frequently due to short term fluctuations of supply and demand and seasonal factors. For example, the availability of fresh wild salmon in June/July lowers the Irish retail demand for farmed salmon. In the processing sector, while prices are still determined by supply and demand, they are generally agreed on a contractual basis for a fixed quantity and specification of product (size grade, fat content etc.). The fluctuations in price due to seasonal factors have, to a considerable extent, been reduced in recent years due to the increased levels of farmed salmon available to the market and the greater availability of product on an almost year-round basis. In the case of some of the large supermarket chains, ISPG have from time to time been involved in special promotions, usually over a two week period. In such cases, ISPG will negotiate prices for such promotions with the supermarket, in consultation with the relevant wholesaler, prior to the launch of the promotion.

11. Apart from the small volume of imports the balance of the domestic market is catered for by other Irish producers either selling direct or through other sales agents. In 1991 the other sales agents and the companies for which they acted were as follows:

(a) Fanad acting for

(i) Fanad Fisheries, Kindrum, Co. Donegal

(ii) Cuigeal Teoranta, Carraroe, Co. Galway

(b) Gaelic Sea Foods acting for

(i) Bradan Mara Teoranta, Carna, Co. Galway

(ii) Tully Mountain Salmon Farm Limited, Moyard, Co. Galway

(c) Timar Ireland acting for

(i) Clare Island Sea Farm Limited, Co. Mayo

(ii) Island Sea Farm, Westport, Co. Mayo

(d) Gallaghers acting for

(i) Ocean Farm Limited, Killybegs, Co. Donegal

12. The arrangements entered into between ISPG and each of the producers for whom it acts as agent are contained in a standard form of Agency Agreement.

(i) The preamble to the Agreement states

"Whereas:

- The company and the producer have agreed that the company shall with effect from 1 April, 1991 act as undisclosed agent of the producer for the purpose of marketing selling and distributing aquacultural products of the producer and are entering into this agency agreement to record the terms and conditions on which the company shall so act."

(ii) Clause 2 sets out details of the appointment viz

" As and from the said date, the company shall be the sole and exclusive agent of the producer in accordance with the terms of this Agreement, for the purpose, of marketing selling and distributing the products with power in its own name, or in the name of the producer, and by his agreement, to enter into any contracts and engagements and agreements and to give receipts and to have all such powers and authority as shall be necessary for the purpose of the said agency....."

(iii) Clause 4 states that the agreed objective of the parties "....is that the Company will be in a better position to achieve the best premium price reasonably attainable for the Products .... for the mutual benefit of the Company, the Producer and other producers of aquacultural products ..... for whom the company may from time to time act as agent."

(iv) Clause 5 provides for the commission payable by the producer to the company as a fixed percentage of net sales price plus percentage levies towards the cost of marketing and bad debts. The producer is also liable for transport and shipment costs.

(v) Clause 6 provides for the arrangements for the company to account to the producer for all monies received on his behalf. Clause 8 provides that ownership of products remains with the producer until sold by the company as agent. Clause 9 provides that responsibility for warranties by the company which are authorised by the producer shall remain with the producer and requires that the producer be a member of the ISPG product liability scheme. Clause 10 makes the company responsible for marketing of the products and clause 11 allows the company, in the absence of specific instructions, to grant credit terms at its discretion with no liability for bad debts.

(vi) Under clause 13 "The producer hereby agrees to provide the products in accordance with estimated production schedules ('the supply schedule(s)') to be agreed between the company and the producer not less than three months in advance or such lesser period as the company may agree to in writing. The supply schedule(s) will contain full details of expected harvesting of products on a weekly basis for the relevant period in advance and will include estimated details for each week of the period covered by the said schedule ...."

(vii) Under clause 22 the producer empowers the company to "enter into supply contracts with suitable customers and on such terms as the Company considers to be commercially prudent ... ."

(viii) Clause 25 provides for penalties to be paid by the producer to the company for failure to meet supply schedules.

(ix) The appointment of the company as agent may be terminated by either party on giving 12 months notice in writing to expire at 30 June or 31 December. The company may also terminate it at any time in the event of consistent production failures on the part of the producer while the producer may terminate it in the event of consistent breaches by the company of the agreement.

(x) Products covered by the agreement are defined as "ALL FRESH HARVESTED FISH PRODUCTS OF THE PRODUCER including all round, gutted, filleted and prepack fish products."

13. ISPG stated that by providing an established marketing structure to smaller producers it had played a major role in ensuring the survival of the small producer in a capital intensive industry which had always a high failure rate among small producers. This had contributed to the recent increase in Irish production. They said that the agency agreement required ISPG to take all of a producers output regardless of size subject to it being of a minimum quality standard and produced in accordance with an agreed code of practice. The principal benefits a producer derived from the agreement were:

(a) a guaranteed market outlet for his product at stable prices,

(b) a transparent and low sales cost as ISPG carried many of the fixed marketing costs,

(c) guaranteed payment,

(d) membership of a producers organisation where a producer met other producers and exchanged information on production, marketing and other matters,

(e) ISPG committed itself to dispose of all product on behalf of the producer, not just large fish which were the most marketable and profitable,

(f) as part of the commitment at (a) above, ISPG marketed a producer's fish at any time. Due to its biological life cycle, when salmon reached a mature stage, a farmer was obliged to harvest and sell fish immediately, otherwise they matured and became unmarketable in the water. Whether previously agreed or not, ISPG instantly marketed such fish for a producer for whom it acted.

14. The primary objective, according to ISPG, was to ensure that the company was in a position to guarantee a regular all year round supply of good quality product to its customers in both the domestic and export markets. To this end, it held regular monthly meetings with its producer members to co-ordinate harvesting and sales activity. Since its formation in 1985 it had been largely successful in this primary objective and considerable progress had been made in securing an even flow of production throughout the year and eliminating the seasonal fluctuations in supply. The equalisation of production on a year round basis had been a goal not just of the producer members of ISPG but also of producers throughout Europe and indeed also of fish processors, wholesalers and retailers. As a result of this regular year round availability of the product the retail price of salmon had fallen and had stabilised. There were no great seasonal fluctuations in the retail price as was formerly the case. Given its size, it was too small to have any dominating effect on its markets. The majority of ISPG sales were made to processors and wholesalers. Usually ISPG received the market price in force on the date of a delivery. ISPG stated that the agency arrangements with producers did not seek to restrict production in any way. ISPG would market as much product as the producer could produce. The agreement of production schedules with producers for whom it acts was to ensure that ISPG would have reasonable notice of the quantities of product for which it would be required to find buyers in any given week and that customers placing orders with ISPG would not be left short of product of the right quantity, thereby causing a loss of goodwill and possible future sales. It was the producers who decided their own production schedules and these could be adjusted from time to time.

15. ISPG stated that however, in the case of some processing companies who might be required to both guarantee supplies and overheads, ISPG would be willing to enter into a fixed price supply agreement for a period of either 3 or 6 months. On occasion the agreement may be for as long as a year but this was extremely rare. In general, the price fixed for such an agreement would be based on the estimated average market price over the period. During the course of such an agreement either the processor or ISPG might gain or lose according as the market price of the product rose or fell. Any such gain/loss would generally be very small over the period of time. ISPG had never operated any form of minimum price support scheme for its members and neither ISPG nor its members had any facilities for the long term storage of product. Even if some of their members sought to have ISPG operate price intervention, the company would not have sufficient resources to finance the purchases and hold the stock pending sale. Therefore, the policy of ISPG had been to secure as wide a customer base as possible for its producers at the best open market price available at any particular time.

16. ISPG said that any producer could service directly any one of the smaller Irish customers. Producers choose not to do so because the substantial amount of work and high costs involved with smaller orders, made it uneconomic to do so. There had also been a high incidence of bad debts involving such customers which producers were unwilling to risk carrying alone. ISPG was able to spread the marketing costs and associated risks amongst all of its participating producers thus reducing their level of marketing/selling expenditure relative to sales. Without ISPG, producers would be restricted to the domestic market because they would not be able to compete with the other 4 major selling companies referred to in para. 11. ISPG had always regarded its status as a producers organisation as a method by which it might help producers by bringing them together, keeping them up to date with new farming methods and techniques, introduce them to new and regular markets and, if applicable, secure the necessary grant aid for them. Any producer with a product of sufficient quality may apply to enter into an agency agreement with ISPG. The existence of such a marketing agency facilitated the setting up of salmon farms, as producers would not be obliged to either locate their markets or set up their own marketing/selling structures. Producer members of ISPG were generally located on the Western seaboard and provided important jobs in economically depressed areas.

17. ISPG stated that the consumer benefited from the arrangement in that there was a guaranteed supply of the product to the market throughout the year thus reducing the seasonal fluctuations in supply and prices which heretofore had been a feature of the market. ISPG had also been in the forefront of marketing product directly to the large supermarket retailers. The combination of all year round supplies and increased production had resulted in an increased availability of good quality product at prices affordable to the consumer. The wholesale price of salmon had dropped considerably in recent years. The effect of this had been that the retail price had dropped by a similar amount.

(g) EU Council Regulation on the common organisation of the market in fishery and aquaculture products

18. EU Council Regulation 3759/92 [1] on the common organisation of the market in fishery products, a consolidation of earlier EU Council Regulations in this area, established a common organisation of that market comprising a price and trading system and common rules on competition. The Regulation provided for the activities of producers' organisations which were defined as "any recognised organisation .....established on producers' own initiative for the taking of measures as will ensure that fishing is carried out along rational lines and that conditions for the sale of their products are improved". Under Article 4 the measures to be taken "which shall be designed in particular to promote the implementation of catch plans, concentrations of supply and regulation of prices, shall require members

- to dispose, through the organisation, of their total output....

- to apply, with regard to production and marketing, rules which have been adopted by the organisations with the particular aim of improving product quality and adapting the volume of supply to market requirements".

ISPG was recognised by the EU Commission as a producers' organisation for the purposes of this Regulation in 1987.

19. Following the issue of a Statement of Objections a further submission was made by ISPG. This submission referred to the requirement in Article 4 of EU Council Regulation 3759/92 relating to the disposal by the members through the organisation of their total output and argued, quoting Article 39 of the Treaty of Rome, that, as this was a EU sustained requirement for a producers' organisation, it should insulate that provision from further anti-competitive enquiry. ISPG contended that the Authority was precluded from concluding that this provision offended under Section 4(1) on the basis that it must be presumed that the legislature did not intend, when enacting Section 4(1), to introduce a national legislative provision which removed from producers' organisations a EU granted right to form producers' organisations which depended on a mandatory obligation to dispose of the product through the organisations.

20. As further arguments for the grant of a licence ISPG stated that to be a producers' organisation under European law one had to have a requirement that all member producers supply their production to the producers group. The producers' group could not exist without such a requirement and accordingly the term that imposed this was indispensable to the attainment of the objectives of the producers' organisation. In deciding on licences under Section 4(2) the Authority should have regard to all relevant market conditions. ISPG contended that even if it was not a producers' group under Regulation 3759/1992 the requirement that they be appointed agent for all the products of their principals was indispensable for the attainment of the objectives of improving production and distribution of goods and the promotion of technical and economic progress while allowing consumers a fair share of the resulting benefit. ISPG said that for a marketing organisation in fish to fulfil those objectives it was essential that the production and distribution of goods were not prejudiced by

(i) the inability of the agent to assure customers of the availability of supplies from its principals

(ii) commercial activity which would damage the very objectives which the organisation had been established to attain saying that as long ago as 1976 the European Community recognised that producers' organisations had to have an effective concentration of supply but where a producers' organisation was forced to permit a member of the organisation compete with his own sole marketing agent the concentration could not be effective.

21. The observations of the Minister for the Marine were sought pursuant to Section 4(5) of the Competition Act, 1991. In response, the Department stated

“ Irish Seafood producers Group (ISPG), a recognised EU producers’ organisation, acted as a specialised sales and marketing service for small and medium sized Irish salmon producers, located mainly in the west of Ireland. Ireland’s three largest farmed salmon producers marketed their own product separate to the ISPG. Broadly speaking, at least two thirds of ISPG sales were directed to export markets, particularly France, where the major competition was from Norwegian producers and the remaining third was marketed in the domestic markets. The service provided by ISPG had enabled segments of the Irish salmon farming industry to achieve economies of scale and continuity of supply in the Irish and export markets.

The current production of farmed salmon in Ireland was of the order of 12,500 tonnes. There were four main groups involved in marketing this production which was more than adequate given the very small share Irish production held in the Community market.

In 1995, Norway produced some 270,000 tonnes of salmon of which approximately 80% was sold in the Community markets (outturn for 1996 is projected at 300,000 tonnes). In addition to this, Scotish farmers produced 75,000 tonnes of salmon which was also sold in the UK and on main Community markets. In comparison the ISPG handle a very small share of the Community market while prices had been declining about 20% on average per year in the last two years, primarily due to oversupply and over-production by Norway.

The structure of the ISPG was consistent with Government policy for the development of the marine sector as set out in the Operational Programme for Fisheries 1994-1999. The particular aims of the Programme included, inter alia , to develop scale in marketing and processing to enable the industry to compete effectively and to achieve further growth in the context of increased competition.

The Department was fully supportive of the ISPG’S application for a licence.”

(a) Section 4(1)

22. Section 4(1) of the Competition Act, 1991 prohibits and renders void all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in the State, or in any part of the State.

23. Section 3(1) of the Competition Act, 1991 defines an undertaking as "a person being an individual, a body corporate or an unincorporated body of persons engaged for gain in the production, supply or distribution of goods or the provision of a service". ISPG is a private limited company engaged for gain in the marketing, sale and distribution of farmed salmon and sea trout on behalf of producers for which it is paid commission. It is therefore an undertaking within the meaning of the Act. The producers for which ISPG acts are each involved in the production of farmed salmon or sea trout for sale and are therefore also undertakings. The notified standard agreement is therefore an agreement between undertakings.

24. Under the notified standard agreement ISPG is appointed sole and exclusive agent of the producer for the purposes of marketing, selling and distributing aquacultural products of the producer. The relationship created under the notified agreement between ISPG and the salmon/trout producers is described in paragraph 12. Given the terms of the agreement the Authority considers that the relationship created between ISPG and the producer company by the agreement is that of agency with the producer company as principal and with ISPG as agent.

25. As the Authority stated in the case of the Conoco consignee agreement [1] it considers that an agreement between a principal and its agent does not, in principle, offend against Section 4(1) of the Competition Act. However in the case of Cerestar UK Ltd/Betco Marketing Ltd [1] the Authority stated that it might take a different view in circumstances where the agent was involved in the distribution of a wide range of competing goods or where two direct competitors appointed the same agent. In this instance ISPG acts as agent for a number of principals who are producers of products directly in competition with each other. The overall effect of the agency agreements entered into is that a number of producers have assigned the marketing function within the State for all their combined output to a producer organisation largely owned and controlled by a number of these producers. The operation of the notified arrangements involves, effectively, a joint selling arrangement with full authority given to ISPG to decide the selling arrangements, including prices and discounts, and to set production schedules for the joint production of the members of ISPG, as well as other producers, while producers covered by the arrangements are prevented from marketing any of their output themselves. Such arrangements prevent, restrict and distort competition and therefore offend against Section 4(1) of the Competition Act.

26. ISPG is a producers' organisation of the kind defined in Article 4 of EU Regulation 3759/92. This Regulation provides for the common organisation of the market in fishery and aquacultural products and sets out requirements for producers' organisations in that regard. These include a requirement that members dispose of their total output through the organisation together with the application of rules of the organisation for production and marketing, which involve effectively joint selling arrangements. Article 85(1) of the Treaty of Rome does not apply to these requirements by reason of EU Regulation 26/1962 as amended by EU Regulation 49/1962. In its later submission, ISPG contended that the Authority was precluded from concluding that the provisions in the notified agreement, arising from the requirements of EU Regulation 3759/92, offended under Section 4(1) as it must be presumed that the legislature did not intend, when enacting Section 4(1), to introduce a national legislative provision which removed from producers organisations an EU granted right to form producer organisations which depended on a mandatory obligation to dispose of the product through the organisations. While the Competition Act is by analogy with Articles 85 and 86 of the Treaty of Rome, there is no provision in the Act for the exemption of agreements relating to farm products, including fish, from the application of the Act. The Authority has jurisdiction only to give its opinion as to whether an agreement offends against Section 4(1) of the Competition Act and if so, whether it satisfies the criteria for a licence. Where there may be a conflict between the application of the Competition Act and the policy objectives of an EU Regulation in any area, the Authority is not free to treat the domestic Act as if it had been to that extent implicitly amended. None of the other provisions of the notified agreement raise issues under the Competition Act.

27. Under Section 4(2), the Competition Authority may grant a licence in the case of any agreement or category of agreements which, "having regard to all relevant market conditions, contributes to improving the production or distribution of goods or provision of services or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit and which does not -

(i) impose on the undertakings concerned terms which are not indispensable to the attainment of those objectives;

(ii) afford undertakings the possibility of eliminating competition in respect of a substantial part of the products or services in question".

28. The Irish farmed salmon and trout industry is of comparatively recent origin but since 1987 its growth has been very substantial. Irish output has grown from around 1,000 tonnes in 1987 to a current output of 12,500 tonnes and is expected to reach close to 20,000 tonnes over the next 4/5 years. The development of the farmed salmon industry has been based on growth from a number of small producers located on the western seaboard many of whom did not alone have the capacity or resources to fully exploit the marketing potential of their product both at home and, particularly, abroad. The establishment of a joint marketing agency has facilitated the continued growth of the industry and particularly for that of its smaller firms. The Authority is satisfied that the cooperative marketing, which must of necessity involve joint selling and common pricing, undertaken under the ISPG arrangements has facilitated improvements in production, quality and marketing.

29. A fair share of the benefit has accrued to consumers in the following ways. Consumers have benefited from the growth of the fish farm industry with salmon, which was once a luxury item, becoming an everyday feature of food consumption. The growth in production of farm salmon, has exercised a downward pressure on prices which are now lower than 6/7 years ago. The consumer has also benefited from the all year round availability of farmed salmon with no great seasonal fluctuations in the retail price.

30. Under the notified agreement ISPG is appointed as sole agent to market, in effect, "all fresh harvested fish products of the producer". This involves a joint selling arrangement. ISPG has argued that this is an EU sustained requirement for a producers' organisation under Regulation 3759/92 and that to be a producers' organisation under European law there must be a requirement that all producer members should supply all their production to the producers' group. ISPG added that the producers' group under the Regulation could not exist without such a requirement. The Authority accepts these arguments and accordingly considers that this provision is indispensable to the functioning of the producers' organisation under the Regulation and therefore to the attainment of the objectives summarised above.

Elimination of Competition

31. By reason of the joint marketing arrangements competition is effectively eliminated between the ISPG producers. However as indicated in para. 7 above, ISPG producers now account for only about 22% of Irish output. The Authority therefore does not believe that the notified arrangements afford undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

32. In the Authority's opinion Irish Seafood Producers Group Ltd and the producer companies are undertakings within the meaning of Section 3(1) of the Competition Act, 1991 and the notified standard Agency Agreement is an agreement between undertakings. The Authority considers that the notified standard agreement offends against Section 4(1) of the Competition Act, 1991, but that it satisfies the conditions for a licence under Section 4(2) of that Act. It is therefore decided to issue a licence in respect of the notified standard agreement. The licence shall apply from 12 December 1996 to 11 December 2006. It is not considered necessary to attach any conditions to the licence.

33. The Competition Authority has issued the following licence:

The Competition Authority grants a licence under Section 4(2) of the Competition Act, 1991 to the standard agency agreement between Irish Seafood Producers Group Ltd and producers, notified under Section 7 on 13 May 1992 (Notification No. CA/22/92E), on the grounds that, in the opinion of the Authority, all the conditions of Section 4(2) of the Competition Act, 1991 have been fulfilled.

The licence shall apply from 12 December 1996 to 11 December 2006

For the Competition Authority

Prof. Patrick McNutt

Chairperson

12 December 1996.

[ 3] Decision No. 286, 25 February 1994

[ ]⁴ Decision No.374, 21 November 1994