The Supreme Court has sent a competition law dispute involving the Irish beef processing sector back to the High Court for a fresh examination of whether the arrangements at issue can qualify for an exemption under European competition law.
Mr Justice Fennelly delivered judgment on 3 November 2009 in proceedings brought by the Competition Authority against Beef Industry Development Society Limited, known as BIDS, and Barry Bros. (Carrigmore) Meats Limited.
The case concerned arrangements designed to reduce excess capacity in the beef processing industry by encouraging some processors to leave the market while others remained.
The European Court of Justice had already ruled in November 2008 that the arrangements had an anti-competitive object under Article 81(1) of the EC Treaty. It identified measures including levies linked to cattle slaughter, restrictions on the disposal and use of processing plants, and limits intended to discourage new competitors from entering the market.
The remaining issue was whether the arrangements could nevertheless satisfy Article 81(3), which allows otherwise prohibited agreements to escape Article 81(1) if strict conditions are met.
Mr Justice Fennelly agreed that the High Court should reconsider that question from the beginning in light of the European ruling. He said the earlier High Court discussion of Article 81(3) had been expressed only hypothetically because the trial judge had originally found that the arrangements did not have anti-competitive effects.
The Supreme Court highlighted two matters requiring particular attention. First, the respondents would have to establish that the arrangements did not eliminate competition in respect of a substantial part of the products concerned. Second, the High Court would need to decide whether individual restrictions, including those on the use of land and processing plant and on the sale of equipment, were genuinely indispensable to the claimed objectives.
The judgment therefore did not finally decide whether Article 81(3) applied. That assessment was left to the High Court on remittal.