The AdC imposed fines on six large retail food chains
December 21, 2020
Press release 22/2020
And they monitored the firms that sometimes deviated from the concerted price, insisting that each firm practiced an identical price:
During the investigation phase, the AdC also carried out complementary hearings requested by the undertakings. The results have been considered in the final decisions.
Competition Law forbids agreements that restrict competition between undertakings, in all or part of the market, reducing consumer welfare. Infringement of competition rules not only reduces such welfare, bubt it also harms firms’ competitiveness and innovation, therefore causing damage to the economy as a whole.
The AdC’s main priority is kept at strengthening enforcement, particularly of cartels, or equivalent practices, with a focus on those which have a significant impact on consumers.
The fines
The fines imposed by the AdC are determined by the undertakings’ turnover in affected markets. According to Competition Law, fines can reach a maximum of 10% of the company's turnover in the last year of the practice.
In defining the fine, the AdC also takes into account the gravity and duration of the infringement, the degree of participation in the infringement, the collaboration provided by the undertakings during the investigation, among others.
Regarding the second decision, it was necessary to take into account the so-called cumulative effect to Modelo Continente, Pingo Doce, Auchan and Intermarché. .
Fines imposed on each of the undertakings are as follows:
Sociedade Central de Cervejas (SCC)
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29 500 000 €
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Administrador da SCC
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16 000 €
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Diretor da Modelo Continente
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2 000 €
|
Primedrinks
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7 010 000 €
|
Cooplecnorte (E.Leclerc)
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2 060 000 €
|
Lidl
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10 550 000 €
|
Em cúmulo jurídico:
|
|
Modelo Continente
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121 930 000 €
|
Pingo Doce
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91 090 000 €
|
Auchan
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22 250 000 €
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Intermarché
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19 390 000 €
|
Total
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303 798 000 €
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The infringement
The practice sanctioned by the AdC has, in competition terminology, the designation of “hub-and-spoke”.
This is a practice equivalent to a cartel, in which distributors use the contacts they have with the supplier to ensure, through the latter, that every undertaking practices the same price. This ensured a generalized increase in prices and avoids direct contact between undertaking found in traditional cartels.
Such a communication scheme benefits those firms involved in the concerted practice, but harms consumers.
Both cases now sanctioned add to other investigations underway in the large retail sector. During 2017, the AdC carried out unannounced inspections in the premises of 44 entities. This led to the opening of 16 proceedings, more than a dozen of which concerning large retail. Currently, investigations have led to 7 Statement of Objections for “hub-and-spoke” practices sent large food retailers and to suppliers of spirits and non-spirits, packaged bread and cakes, as well as personal care, beauty and cosmetic products.