AdC sanctions supermarkets and common beverage supplier
Press release 21/2021
AdC sanctions supermarkets and common beverage supplier
The Portuguese Competition Authority (AdC) has issued a decision sanctioning four supermarket chains, two individuals and a common supplier, for having participated in a hub-and-spoke scheme, to the detriment of consumers.
The decision
This decision concerns the supermarkets Modelo Continente, Pingo Doce, Auchan and
Intermarché, two individual managers of Modelo Continente and the supplier Super Bock, for having participated in a hub-and-spoke scheme. This is a highly damaging practice to consumers, which affects the generality of the Portuguese population, given that the business groups involved, represent a large part of the national market for large-scale food retail distribution.
The sanctioned practice
The investigation concluded that through contacts established through the common supplier, without the need to communicate directly with each other, the participating companies ensured the alignment of prices in their supermarkets, in a conspiracy equivalent to a cartel, known in the terminology of competition law as "hub-and-spoke".
These schemes eliminate competition, depriving consumers of the option for better prices, ensuring better levels of profitability for the entire distribution chain, including supplier and supermarket chains.
The case includes electronic conversations that demonstrate the behavior, such as [in Portuguese]:
In December 2020, the AdC had already sanctioned these and two other supermarket chains and two beverage suppliers, Sociedade Central de Cervejas and Primedrinks, for the same type of practice (see Press Release 22/2020).
In the present case, the AdC's investigation determined that the practice lasted for more than twelve years, between 2003 and 2016, and targeted several Super Bock products, including Super Bock, Carlsberg, Cristal and Cheers beers, Vitalis and Água das Pedras waters, and also Somersby cider.
In the decision now adopted, the AdC imposed the immediate cessation of the practice, as it is not possible to exclude that the investigated behaviors are still ongoing.
In March 2019, the AdC had adopted the respective Statement of Objections, having given the opportunity to the companies to exercise their right to be heard and defense, which was duly appreciated and considered in the final decision.
The AdC also carried out, during the investigation phase, the complementary measures of proof requested by the companies concerned, the results of which were also considered in the final decision.
The sanction
The fines imposed by the AdC are determined by the sales volume of the targeted companies for goods or services related to the infringement 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 determining the fine, the AdC takes into account the gravity and duration of the infringement, the degree of participation in the infringement by the undertakings concerned, the economic situation of the undertakings, among other circumstances, in accordance with good international practices [in Portuguese] (v.Guidelines on methodology of fines)
The following are the fines imposed on each of the sanctioned:
Super Bock Bebidas, S.A.: €33.296.000
Modelo Continente Hipermercados, S.A.: €27.480.000
Pingo Doce – Distribuição Alimentar, S.A.: €20.362.000
Auchan Retail Portugal, S.A: €3.463.000
ITMP Alimentar, S.A.: €8.265.000
Pessoa singular: €113
Pessoa singular: €423
These sanctioning decisions may be appealed. The appeal does not suspend the enforcement of the fines. Companies may request the Competition, Regulation and Supervision Court to suspend the enforcement of the decisions if (i) they demonstrate that it causes them considerable damage and (ii) they provide an effective guarantee in its place.
The AdC maintains as a priority the reinforcement of the investigation into 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.
3 November 2021
