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98 EN Official Journal of the European Communities C 61/3

Notice pursuant to Article 19(3) of Regulation No 17 concerning notification IV/36.492/F3 —


(98/C 61/03)

(Text with EEA relevance)

I.ÙThe application and notification is undertaken by IPCL pursuant to a management

contract. The legal title in the 1Ø406 Spring pubs is
vested in IPCL subsidiaries, but Spring has the right
1.ÙOn 29 April 1997, Spring Inns Limited (Spring) at any time to give notice to the relevant IPCL
notified pursuant to Article 4 of Council Regulation subsidiary that it wishes to complete the transfer of
No 17Ø(Î), the standard form tenancy agreements the legal title to any person Spring may nominate.
(‘the leases’) used for letting by Spring and related
companies of licensed premises in the UK. The
Spring leases are in the form used as from 1 January
5.ÙOn 21 September 1997, The Grand Pub Company
Limited, a company set up by the Japanese
investment bank. Nomura, entered into an
2.ÙSpring has requested negative clearance of the leases, agreement to acquire IPCL and Spring. The sale is
or confirmation that the agreement could benefit due to be completed by 28 March 1998.
from the application of Regulation (EEC) No
1984/83Ø(Ï), or exemption pursuant to Article 85(3)
of the EC Treaty. 6.ÙOn 24 May 1997, 873 Spring houses were let on
long leases, principally of 20 year duration, and 533
houses were let on shoter term or on temporary
3.ÙBefore Spring’s acquisition in May 1996 of the agreements. At the fiscal year end of 30 September
beneficial interests in the freehold and leasehold 1996, the net income of Spring for a four-month
properties of 1Ø406 pubs, these leases were with the period was GBP 9Ø729 million (which equates to
Inntrepreneur Pub Company Limited (IPCL). As GBP 29Ø187 million for 12 months).
such, the leases have been the subject of a previous
notification for which a notice pursuant to Article
19(3) (the previous notice) was published on 30 July
1993Ø(Ð). This notification has been withdrawn by the TIBSCO
then notifiying parties.

7.ÙTibsco is the nominated supplier for the purpose of

the leases and owns the contract to supply the Spring
II.ÙThe parties estate until 28 March 1998. Scottish Courage, the
brewing division of ScottishØ@ØNewcastle plc, acts as
Tibsco’s agent in the performance of the supply
SPRING contract. The effect of this is that, until the end of
this supply contract, Spring has no choice in
deciding the brands of beer for which its lessees are
4.Ù98Ø% of the voting share capital of Spring is held by tied. Tibsco is a subsidiary of Foster’s and in the
the Royal Exchange Trust Company, a subsidiary of year ended 30 June 1996 the turnover of Tibsco was
Guardian Royal Exchange Assurance Plc., as trustee. GBP 273,2 million.
The UK manufacturer and distributor of branded
food and alcoholic drinks Grand Metropolitan plc
(GrandMet) and the Australian brewing company
Foster’s Brewing Group (Foster’s) hold 1Ø% each.
However, GrandMet and Foster’s have the power to III.ÙThe market
appoint half of the directors and Spring is financed
by bank loans which are severally guaranteed by
GrandMet and Foster’s. The management of Spring 8.ÙThe particular features of the supply for beer for
consumption in on-licensed premises market (the
(Î)ÙOJ 13, 21.2.1962, p. 204/62. on-trade) in the United Kingdom are as follows:
(Ï)ÙCommission Regulation (EEC) No 1984/83 of 22 June 1983
on the application of Article 85(3) of the EEC Treaty to
categories of exclusive purchasing agreements (OJ L 173, —Ùthere are approximately 83Ø100 full licenses in
30.6.1983, p. 5; corrigendum OJ L 281, 13.10.1983, p. 24).
The Regulation contains in its Title II special provisions for issue, of which about 57Ø000 were public houses
beer-supply agreements. or pubs; in addition there are around 31Ø500
(Ð)ÙOJ C 206, 30.7.1993, p. 2. clubs and 32Ø300 restaurants and private hotels,
C 61/4 EN Official Journal of the European Communities 26.2.98

—Ùtotal beer consumption in the on-trade in 1996 tie by brand, (iii) removes the minimum purchasing
was 43,25 million hl which accounted for 69Ø% obligation and the penalty for shortfall, (iv) allows
of total beer consumption; overall consumption is the arrangements of the purchasing agreement to be
decreasing or, at best, static and the off-trade is considered for rent reviews after 31 March 1998,
gradually becoming more important, and (v) allows the lessees to call for a rent review if
the purchasing agreement is terminated; such a
review could be downwards, but not to a level below
the rent previous to the time of entering into the
—Ùon-trade beer consumption took place in 1995 purchasing agreement.
through the following channels (volume %):
brewers tied houses (12,1Ø%), brewers managed
houses (20,2Ø%), pub chain tied houses,
including Spring (9,4Ø%), pub chain managed 12.ÙOther changes are that there is no longer an obli-
(4,0Ø5), loan tied houses (21,2Ø%) and untied or gation to stock or display non-beer drinksØ(Ï).
free houses (33,1Ø%), Furthermore, in future lease agreements, the
company may impose a purchasing agreement for
specified ciders and exclude the guest beer clause.

—Ùbrewing has become more concentrated with the

current four national brewers commanding 77Ø% 13.ÙThe discounts offered to the lessees following the
of the primary supply market. introduction of the Spring initiative consist of an
off-invoice standard discount of GBP 23/barrel. In
addition, there is a volume related retrospective
9.ÙIn the 12 months prior to 24 May 1997, the beer discount for purchases of qualifying products above
supplied through Tibsco to the Spring estate 150 barrels.
accounted for 0,9Ø% of the UK on-trade beer
market. In addition to these supplies, an unknown
number of barrels (estimated by the notifying parties 14.ÙThe Spring initiative results in a discount of GBP
as 117Ø000 barrelsØ(Î)) were sourced elsewhere, as 34,92 per barrel on the assumption that the average
guest beer purchases or otherwise. Spring lessee purchases his total annual beer
throughput, estimated by Spring at 258 barrels, from
the nominated supplier.

IV.ÙThe agreement 15.ÙThis discount has sbustantially reduced the price

differential between the average Spring lessee and
the individual free-house operator customers that
purchase a similar annual barrelage from Scottish
10.ÙThe previous notice dealt only with the 20-year fully
CourageØ(Ð). Furthermore, the Spring lessee benefits
repairing and insuring leases; this notice also
of a cashflow benefit, accounting for GBP
concerns other standard forms of leases, notably the
1,62/barrel, related to the terms of rent payable for
fixed-term agreement which is for a term of three
those lessees which now pay their rent monthly in
years, the turnover related agreement which is for a
advance as opposed to quarterly in advance as
period of 10 years and long fully repairing and
stipulated in the lease. In addition, 28 Spring leases
insuring leases for terms between 10 and 30 years.
have been assigned since 1 January 1997 under
which premiums have been paid by the new to the
old lessees.
11.ÙThe main changes to the leases compared with the
previous notice follow from the introduction of the
Spring initiative. Under this scheme, Spring offered 16.ÙSpring has introduced in September 1997
in Ferbruary-March 1997 all of its tenants a new procurement benefits, known as SupplyLine. The
discount scheme for their beer purchases upon potentially available procurement benefits have,
signature of a purchasing agreement and a deed of according to the notifying parties, an average annual
variation. If these agreements were signed and value of GBP 3Ø650 per pub.
returned to Spring before 1 July 1997, the discounts
were granted retrospective to 1 January 1997. The
purchasing agreement sets out the discount structure.
The deed of variation (i) incorporates the purchasing
agreement in the existing lease, (ii) introduces a new (Ï)ÙThe notifying parties have indicated that this stocking obli-
beer tie but allows Spring to vary the tie so as to gation in the fixed-term Agreement is in practice not
(Ð)ÙThe average discount granted by Scottish Courage to such
free houses is a business secret and cannot be summarised
(Î)Ù1 barrel equals 1,63659 hl; 1 hl equals 0,611026 barrels. meaningfully in a non-confidential manner.
26.2.98 EN Official Journal of the European Communities C 61/5

V.ÙThe Commission’s intentions from the date of this notice, quoting reference
IV/36.492/F3 to:
The Commission intends to take a favourable position in
respect of the Spring lease agreements, a summary of
which is published here, by granting an exemption
pursuant to Article 85(3) for the period from the date of European Commission,
introduction of the purchasing agreement and the deed Directorate-General for Competition,
of variation described above until 28 March 1998. Before Directorate F,
doing so the Commission invites all interested third Rue de la Loi/Wetstraat 200,
parties to submit their observations within one month B-1049 Brussels.

Non-opposition to a notified concentration

(Case No IV/M.1035 — Hochtief/Aer Rianta/Düsseldorf Airport)

(98/C 61/04)

(Text with EEA relevance)

On 22 December 1997, the Commission decided not to oppose the above notified concen-
tration and to declare it compatible with the common market. This decision is based on
Article 6(1)(b) of Council Regulation (EEC) No 4064/89. The full text of the decision is
available only in English and will be made public after it is cleared of any business secrets it
may contain. It will be available:

—Ùas a paper version through the sales offices of the Office for Official Publications of the
European Communities (see list on the last page),

—Ùin electronic form in the ‘CEN’ version of the Celex database, under document
No 397M1035. Celex is the computerised documentation system of European Community
law; for more information concerning subscriptions please contact:

Information, Marketing and Public Relations (OP/4B),
2, rue Mercier,
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Tel: (352) 29Ø29Ø4Ø24Ø55, fax: (352) 29Ø29Ø4Ø27Ø63.

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