Competition Authority recommends that the Regional Government of the Azores refrain from promoting meetings with the milk industry

The Competition Authority (CA) has addressed a Recommendation to the Regional Government of the Azores, intimating that it should abstain from participating in or calling regional dairy industry meetings, at which milk prices are discussed, so as to avoid facilitating the possible collusion of milk-purchasing undertakings.

In the course of the enquiry relating to the case opened against the undertakings Fromageries - Bel Portugal SA, Insulac - Produtos Lácteos Açoreanos SA and Prolacto - Lacticínios de S. Miguel SA, the CA learnt that, in the last decade, the Regional Government of the Azores called various meetings that were attended by representatives of both the raw milk producing industry and the purchasing/processing industry. Within the framework of these meetings, among other things, the price of raw milk in the Autonomous Region of the Azores was discussed.

The Authority considered that, in a market that should operate on a free and competitive basis, this intervention by the Regional Government of the Azores may facilitate the possible collusion of milk purchasing undertakings, even if this is not the purpose, in that it contributes to an information exchange on the prices charged and to be charged in that market. Accordingly, the authority made the recommendation to the regional executive body that it refrain from this practice.

The CA conducted the enquiry into the said case, following a complaint submitted by the Associação Agrícola de São Miguel - Cooperativa União Agrícola CRL.

The complaint referred to practices allegedly carried out in the raw milk market in the Autonomous Region of the Azores by the three undertakings accused. They took the form of potential coordination of the purchasing prices for raw milk, and the alleged abuse of the economic dependence in which the raw milk producers possibly found themselves in relation to those undertakings.

During the investigation conducted in connection with the case, the Authority carried out procedures involving the search for and seizure of documents, in the headquarters of the undertakings accused, on the island of São Miguel in the Azores. These took place in addition to other enquiry procedures.

Following the investigation phase, the Authority decided to discontinue the case on the grounds that it had not been proved that the three enterprises accused had engaged in behaviour subsumed under Article 4 (1) – concerted practices among undertakings – or Article 7 (1) – abuse of economic dependence – of Law No. 18/2003 of 11 June.

However, with a view to the free and competitive functioning of a key market for the economy of the Azores, the CA decided to issue the recommendation that is now being released.

Lisbon, 24 June 2011