12. 12. 86 Official Journal of the European Communities No C 319/3
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12. 12. 86 Official Journal of the European Communities No C 319/3 Notice pursuant to Article 19 (3) of Regulation No 17/62 (') concerning notification No IV/ 31.914 — ARG/Unipart (86/C 319/03) 1. On 7 July 1986, Austin Rover Group Limited, The parties have established detailed lists of the products Coventry, United Kingdom ('ARG') and Unipart Group falling into each category. Individual products may, in Limited, Oxford, United Kingdom ('Unipart') notified general, be changed from one category to another only an agreement between them dated 28 February 1986. by agreement between the parties. Both those companies are at present indirect wholly- owned subsidiaries of Rover Group public limited company, a company in which the United Kingdom 4. The agreement provides inter alia that: Government owns nearly all the shares. That Government has announced that shares in Unipart may in future be returned to the private sector; in the (a) ARG will not obtain the services provided by meantime, Unipart is to trade as a separate and Unipart from any other party, and will supply or independent entity from ARG, so that despite their authorize the supply of parts to the aftermarket only common ultimate ownership, the two companies are no through Unipart. longer parts of a single economic unit. ARG is a manu facturer of passenger cars and car-derived vans. Unipart has for several years supplied replacement parts and accessories for motor vehicle manufacturers in the Rover (b) ARG will recommend only parts bearing its (formerly BL) pic group and also supplied replacement trademark, and parts bearing both the Unipart and parts and accessories for other types of vehicles. Austin Rover trademarks, as parts for ARG vehicles. (c) Subject to meeting Unipart's qualitative standards, 2. Under the agreement, Unipart will continue to be ARG existing franchisees will be given the first responsible for operating ARG's parts business in so far opportunity of becoming Unipart franchisees. as it relates to supplying parts to the parts aftermarket for fitment to ARG vehicles. Unipart will carry out all the functions which that service entails, i.e. quality (d) the whole range of ARG fit parts has to be made control, purchasing, warehousing, marketing, selling, available by and through Unipart. order processing, distribution and accounting. Unipart has a general obligation to achieve competitive levels of efficiency. Its remuneration varies according to the per 5. Responsibilities, risks and revenues are divided formance it achieves. according to the three categories. 3. For the purposes of the agreement and especially of (a) Unipart branded parts are approved, procured, allocating responsibilities between ARG and Unipart, the stocked and sold entirely by Unipart on its own parts for the after-market are divided into three cate account. gories : (b) Dual branded parts receive engineering approval (a) Unipart branded parts consist of fast-selling, highly from ARG or from Unipart under authority competitive parts such as sparking plugs and shock- delegated by ARG. ARG can set the recommended absorbers, which fit ARG vehicles and also others. resale prices of certain parts, and Unipart pays ARG a commission on sales, but these are otherwise for Unipart's account. (b) Dual branded parts consist of parts in the Unipart range which fit ARG vehicles, bear the marks of (c) For Austin Rover branded parts, Unipart acts as both companies and meet ARG's specifications. ARG's agent and receives a handling commission on sales. ARG gives engineering approvals, decides resale prices, and takes the profit or loss. (c) Austin Rover branded parts consist of all other parts made by ARG or by subcontractors to ARG's specification which bear only the Austin Rover mark. 6. Unipart branded parts may be supplied to any markets or customers. Dual branded parts may be supplied to Unipart franchisees provided they are not franchisees of a competing vehicle manufacturer, or to O OJ No 13, 21. 2. 1962, p. 204/62. other customers with ARG's consent. No C 319/4 Official Journal of the European Communities 12.12. 86 Unipart shall not expand any of the product ranges to the Regulation) as an indispensable measure of rational which Austin Rover Parts or Dual branded parts belong isation within the motor vehicle industry and therefore by adding to them any new categories of products, or eligible for exemption under Article 85 (3) of the Treaty. introduce any new product ranges, which include ARG fit parts (whether to the original equipment specification They further argue that although the notified agreement or otherwise) without the prior written agreement of is primarily a horizontal one, it has definite implications ARG; such agreement not to be unreasonably withheld. for the operation of ARG'S distribution system. In assessing the notified agreement, the Commission should 7. The initial term of the agreement is specified to be therefore take account not only of the general terms of five years from the date of any offer for sale to the Article 85 (3) of the Treaty but also of the specific aims public of shares in Unipart, or seven years from the date of the Regulation, namely the promotion of the of signature of the agreement, whichever is shorter. The efficiency of the network and the consequent service to parties would however expect the contract to be renewed consumers. They conclude that the cooperation governed after this initial period provided the parties are satisfied by the notified agreement is apt to contribute to the with its operation during that period. desired rationalization. Although the functions of parts procurement, stockholding and resale at the interim levels are separated from the trade in new vehicles, the 8. The parties to the agreement state that dealers, essential objective of a unified sales and servicing organ repairers and end-users can obtain parts which are ization at the retail level is secured. A complementary identical with or substitutable for Unipart branded parts objective, that the ARG dealers should have a sufficient from many suppliers throughout the Community. Most economic base to sustain their obligations vis-a-vis ARG of the Dual branded parts are subject to the same in connection with stocks of parts, is not jeopardized. competition from other suppliers. Some of the Austin Rover branded parts are available only from ARG or The parties claim that the agreement also contains no from subcontractors which are licenced. restrictions which are not indispensable to the achievement of those objectives. They say that the 9. Unipart also provides parts supply services for allocation of tasks between the parties (4 to 6 above) is Jaguar and Land Rover vehicles. The underlying necessary at least for a transitional period, given that agreements with the manufacturers of these vehicles have Unipart has been fulfilling the parts supply function for also been notified to the Commission (IV/31.272 — ARG within the BL group for several years. Unipart/Jaguar Cars Holdings Limited and Jaguar Cars Limited, Coventry, United Kingdom and IV/31.652 — 11. The parties have agreed to keep records and make Unipart/Land Rover Group Limited, Birmingham, periodic reports so as to inform the Commission of the United Kingdom). Although those cases are the subject practical application and effects of the agreement. of separate proceedings, the Commission will take them into account in its assessment of the Unipart's agreement 12. On the basis of the foregoing facts and arguments, with ARG. the Commission intends either to take a decision granting an exemption pursuant to Article 85 (3) of the 10. The notifying parties submit that an essential part Treaty or to have its Directorate-General for of the legal and economic context in which the Competition send a provisional letter as described in the agreement operates is the fact that ARG operates, with notice on procedures concerning notifications (2). The its importers and franchisees, a Community-wide Commission, therefore, invites interested third parties to exclusive and selective distribution system of the kind send their observations within one month from the pub considered in Commission Regulation (EEC) No 123/85 lication of this notice to the following address, quoting on the application of Article 85 (3) of the Treaty to the reference IV/31.914 — ARG/Unipart. certain categories of motor vehicle distribution and servicing agreements ('). In that Regulation, and par Commission of the European Communities, ticularly in its fourth recital, the Commission expressed Directorate-General for Competition, the view that a series of restrictive agreements creating a Directorate for Restrictive Practices and Abuse of unified system for the distribution of new vehicles and Dominant Positions I, parts and for the repair and maintenance of those 200, rue de la Loi. vehicles could be regarded (within the limits laid down in B-1049 Brussels. (') OJNoL 15, 18. 1. 1985, p. 16. O OJ No C 295, 2. 11. 1983, p. 6. .