New case in the retail sector: AdC issues Statements of Objections to six supermarket chains and two drink suppliers for price fixing, harmful to consumers

Press Release 10/2020

New case in the retail sector: AdC issues Statements of Objections to six supermarket chains and two drink suppliers for price fixing, harmful to consumers

The AdC – Portuguese Competition Authority issued Statements of Objections to 6 large food retail chain groups and 2 suppliers, one of non-alcoholic beverages and juices and the other one of wine and alcoholic drinks, for price fixing, a serious infringement of Competition Law.

The investigation conducted by the AdC revealed that Modelo Continente, Pingo Doce and Auchan used their commercial relationship with Sumol+Compal and a supplier and retailer of alcoholic drinks to align the retail prices of most of the latter’s products, to the detriment of consumers.

In the case of non-alcoholic beverages and juices, the Statement of Objections also targets the Lidl distribution chain, while in the case of alcoholic drinks, the Intermarché and E.Leclerc chains are also involved. All the retailers concerned represent a large percentage of the distribution market in Portugal.

The Statements of Objections also includes two board members and two directors, one from each of the suppliers, Sumol+Compal and the supplier and retailer of alcoholic drinks.

If confirmed, the conduct in question is very serious. This is a new case of “hub-and-spoke”, a practice in which the large retail chains do not communicate directly with each other, but use bilateral contacts with the supplier to promote or guarantee through the latter that they all practice the same retail price in the market.

The investigated practice lasted for several years, between 2002 e 2017, in the case of Sumol+Compal, and between 2006 e 2017, in what concerns the supplier and retailer  of alcoholic drinks. 

This practice is harmful to consumers because it deprives them of the choice of the products they acquire in large retail chains in terms of pricing.

This SO is part of a second set of “hub-and-spoke” cases investigated in Portugal involving retailers and suppliers (in addition to the SO to Bimbo Donuts and retailers presented on June, 25). The first set was initiated in 2019, when the AdC issued Statements of Objections in three similar proceedings.

The AdC is currently pursuing more than ten investigations in the large food retail chains sector, some of which are still subject to investigative secrecy.

AdC considers the large retail chain sector a priority, bearing in mind the importance it holds for most Portuguese consumers and for the daily supply of families.

The AdC emphasizes that issuing a Statement of Objections does not determine the final outcome of the investigation.  At this stage of the procedure, the undertakings are given the opportunity to exercise their rights of defence against the alleged infringements and possible applicable sanctions.

July 4  2020