Thistles in the green grass
The lobbies of the plant health sector graze their national markets in peace, under the benevolent supervision of certain administrations. Small importers challenge with Audace.
Insecticides, selective herbicides and other plant health products, manufactured by multinationals often carry the same trade names in different markets. But according to whether they are sold on the French markets, Belgian, Italian or in other European Member States, their prices can be significantly different. Certain importers may then buy the product in the country where it is the least expensive and distribute it in other places of the European Community, under their own trade mark or that of the producer. This is tempting and seems logical, but so that these imports, "parallels" or "bis", may also be authorised in France, for example, the product must be subjected to a new procedure of registration. However, France does not admit the fast track registration procedure envisaged by the European Union to allow the introduction into a Member State of a product similar to one which has already undergone all the tests of a complete registration in another Member State. "And this is the doing of the major multinationals", say the small importers, pointing out that those multinationals sometimes sell the same product with different colour additives in different countries, thus enabling the producers to claim that they are different products, and hence allowing them to hide behind the traditional registration procedure with its reassuring slowness.
Too clever by half.
Some French importers, selling 95% of their products in the Hexagon (France), established themselves in Belgium, a country that respects the system of the simplified registration for parallel imports.
"As a matter of fact, the European directive does not specify the method of this simplified registration.", explains Herman Fontier, chief of the pesticides department in the ministry for Agriculture. "This is why Belgium decided to grant it by imported batch, in one operation, without any limit for quantity, but for one year only. To prevent such registrations, some multinationals dissolve their own registrations and modify their product slightly, so that it is no longer possible to give out simplified registrations to the importers who make the request, since the
two products are no longer identical."
The French fiscal authorities caught up with its nationals by inflicting a painful rectification of VAT, they were to be taxed at 20.5% and not at 5.5%.
The parallel imports of plant protection products by the small French distributors may only scratch the immense market of the multinationals; they represent 1% of a total market of 12.5 billion FRF. However, the latter hardly appreciate this incursion on "their territory" and use all the legal means at their disposal. Their recourse to various procedures, such as seizure-description accompanied by the placement of judicial seals also enables them to ruin a small competitor. The large producers also exploit information: As soon as a parallel product appears, "warnings" in the form of commissioned official statements blossom everywhere in the press, to the consternation of potential users, announcing that the use of the product concerned is likely to destroy their crop, or that its use may involve penal consequences. The last straw for the small competitor
In Tournai, Belgium, Stéphane Delautre-Drouillon had to put his company PSI into liquidation following the legal procedures initiated by BASF, which had judicial seals placed on his company. BASF accuses PSI of counterfeiting its herbicides, whereas Stéphane Delautre-Drouillon affirms that he manufactures generics from patents fallen in the public domain. A lawsuit is in progress. Stéphane Delautre-Drouillon has joined his French colleagues, although their problems are different: he markets generics under his own trademarks while they sell in France products bought elsewhere.
Joined together within AUDACE, Association of the Users and Distributors of European Agrochemicals, they intend to enforce the freedom to use and sell agrochemical products within the framework of the European legislation and thus to fight "against national protections imposed by some administrations which tolerate infringements by the lobbies of large the firms", says Daniel Roques, the president.
THE INTERNET AND JUSTICE.
Stéphane Delautre-Drouillon has created a Internet website (http://www.audace-ass.com), by means of which Audace hopes to raise an army of small Davids to face some Goliaths who are believed invincible. But are they really? In countries more liberal with regard to parallel imports, these reach rates of 20% to 25%. Currently, in France, the partners of Audace cover 300,000 ha; they hope to exceed the million during the marketing year 1999, and feel supported by the wind of justice. Last year, the correctional court of Blois gave judgement to the "pirates" by confirming the principle of precedence of Community law and, therefore, freedom of movement and marketing of the relevant products. On the 29th September last, the County Court of Béthune confirmed "the precedence of European legal provisions over national law" and noted that the French administration refuses to deliver simplified registration, in violation of articles 30 to 36 of the Treaty, quite simply by not delivering forms of request. Audace secured the decision of the Commission in Brussels to send a letter of warning to the French Republic to conform to European law. France did not respond within the fixed deadline. Who would have believed it?
BERNADETTE BODSON (Thistles in the green grass)
TRENDS-TENDANCES - 12 NOVEMBRE 1998