Press Release 03/2022

March 30, 2022

The decision

The AdC (Portuguese Competition Authority) has sanctioned four supermarket chains – Auchan, Lidl, Modelo Continente and Pingo Doce -, as well as the common supplier of juices, nectars and soft drinks and two for having participated in a scheme of price fixing on retail prices.

This practice is 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.

The AdC’s investigation concluded that 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 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.

Background

In June 2020, the AdC issued a Statement of Objections in the current case, and gave all companies and individuals the opportunity to exercise their right to be heard and to defend themselves, which was duly considered in the final decision.

In December 2020 and recently, on November 2 and 17 and December 16, 2021, the AdC had already sanctioned these supermarket chains and four other beverage suppliers, as well as a supplier of packaged bread and cakes for the same type of practice (see Press releases 22/2020, 21/2021 and 23/2021).

In the current case, the AdC investigation determined that the practice lasted for over fourteen years – between 2002 and 2017 – and targeted several products such, such as juices and nectars, and carbonated and non-carbonated drinks.

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

For further information on the case, read the website.

The fines  

The sanction now decided resulted in a total fine of € 79.928.700

The total fine is applied as follows:

Supplier of soft drinks	€ 25.100.000
Modelo Continente Hipermercados	€ 24.000.000
Pingo Doce – Distribuição Alimentar	€ 20.920.000
Lidl	€ 5.480.000
Auchan	€ 4.400.000
Supplier manager	€ 15.200
Supplier manager	€ 13.500

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 Portuguese 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 seriousness 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.

Evidence gathered

From the evidence collected during the unannounced inspections there are electronic conversations that demonstrate the practice.