Press Release 23/2021

November 17, 2021

 

The decision

The Portuguese Competition Authority (AdC) has sanctioned three supermarket chains – Auchan, Modelo Continente and Pingo Doce - as well as the common supplier Bimbo Donuts for having participated in a scheme of price fixing on retail prices.

This practice is highly damaging to consumers and affects the generality of the Portuguese population, since the business groups involved represent a large part of the national market of large retail distribution of food products.

Through contacts established through the common supplier, without the need to communicate directly with each other, the participating distribution companies ensure the alignment of the retail prices in their supermarkets, in a conspiracy equivalent to a cartel, known in competition law terminology as "hub-and-spoke".

Such a practice eliminates competition, depriving consumers of the option of better prices, ensuring better levels of profitability for the entire distribution chain, including supplier and supermarket chains.

 

Evidence gathered

From the evidence collected during the unannounced inspections there are electronic conversations that demonstrate the practice, such as the following [in Portuguese]:

 

 

Background

In December 2020 and recently, on November 2, 2021, the AdC had already sentenced these and three other supermarket chains and three beverage suppliers, Sociedade Central de Cervejas, Primedrinks and Super Bock, for the same type of practice (see press release 22/2020 and press release 21/2021).

In the current case, the AdC investigation determined that the practice lasted for at least eleven years - between 2005 and 2016, and targeted several Bimbo Donuts products, such as packaged bread, Donuts, Bollycao or Manhãzitos.

In the decision now adopted, the AdC imposed the immediate cessation of the practice, as it cannot be excluded that the investigated behavior is still ongoing.

In June 2020, the AdC adopted the Statement of Objections in this case, having given the opportunity to all the companies to exercise their right to be heard and defense, which was duly appreciated and considered in the final decision.

The AdC maintains as a priority the reinforcement of the investigation of practices restricting competition, in particular those with the greatest impact on consumers, on the competitiveness of companies and on the economy as a whole, such as the practice now sanctioned.

 

The fines

The sanction now decided resulted in a total fine of €24 691 000.

The total fine is applied as follows:

Auchan Retail Portugal	€2 981 000
Bimbo Donuts	€7 353 000
Modelo Continente Hipermercados	€7 161 000
Pingo Doce Distribuição Alimentar	€7 196 000

 

The fines imposed by the AdC are determined by the sales turnover of the sanctioned companies in the affected markets in the years of the practice. In addition, according to the Competition Law, fines cannot exceed 10% of the company's turnover in the year prior to the sanctioning decision.

In setting the fine, the AdC takes into account the gravity and duration of the infringement, the degree of participation of the companies in the infringement, the economic situation of the companies, among other circumstances, in accordance with international best practices (see the AdC’s Guidelines on the Methodology to be Used in the Application of Fines [in Portuguese]).

These AdC’s sanctioning decisions may be appealed. The appeal does not suspend the execution of the fines. Undertakings may request the Competition, Regulation and Supervision Court to suspend the enforcement of the decisions if (i) they demonstrate that it causes them considerable prejudice and (ii) they provide an effective guarantee in its place.

For further information, please see "Q&A about Press release 22/2020”.