Press Release 09/2020

 

The AdC – Portuguese Competition Authority issued a Statement of Objections (SO) to three large food retail groups and a supplier of pre-packaged bread and substitutes and cakes, for price fixing.

 

The investigation, conducted by the AdC revealed that Modelo Continente, Pingo Doce and Auchan supermarket chains used the commercial relationship with supplier Bimbo Donuts to line up the retail prices they practiced for those products, to the detriment of consumers.

 

If confirmed, the conduct in question is very serious. This practice is equivalent to a cartel, in which the distributors do not communicate directly with each other, as usually the case in a cartel, but they use bilateral contacts with the supplier to promote or guarantee through the latter that they all practice the same retail price in the market retailer. This practice is called a hub-and-spoke, in competition terminology.

 

The investigated practice lasted for several years, between 2004 and 2017.

 

This is a practice that harms consumers by restraining their price options, since the supermarket chains in question represents, according to public data, more than half of the large food retail market in Portugal.

 

The Statement of Objections (SO) now issued is part of a second set of “hub-and-spoke” cases investigated in Portugal, involving large retailers and suppliers, adding to other three SO the AdC adopted in 2019.

 

These first procedures were affected by the suspension of deadlines due to the declaration of the state of emergency in Portugal.

 

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

 

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.

 

The Statement of Objections was issued on 24 June 2020.