AdC issues Statements of Objections to supermarket chains and beverage suppliers for price fixing, harmful to consumers

Press release 02/2019
 
AdC issues Statements of Objections to supermarket chains and beverage suppliers for price fixing, harmful to consumers
 
The AdC – Portuguese Competition Authority issued three Statements of Objections to six large food retail groups in Portugal and three beverage suppliers for taking part in practices equivalent to cartels, to artificially determine the prices of the products.
 
The investigation conducted by the AdC revealed that Modelo Continente, Pingo Doce, Auchan and Intermarché supermarket chains used the commercial relationship with the suppliers Central de Cervejas and Super Bock to line up the retail prices they practiced for the main products of those companies, such as beers, waters with flavour, soft drinks, among others.
 
In a third case, AdC accuses the same four supermarket chains and two more, Lidl and E. Leclerc, to use the same scheme with another drink supplier, PrimeDrinks, which distributes wines and spirits produced by the shareholders themselves and other brands. In this case, it was found that the main products in the portfolio of Prime Drinks were also subject of this harmful practice for consumers.
 
In addition to the companies, managers and directors of Modelo Continente, of Central de Cervejas and Super Bock are also accused in the Statements of Objections of being allegedly involved in the infringements.
 
If confirmed, the conduct in question is very serious. This practice is equivalent to a cartel, where retailers do not communicate directly with each other, as is usually the case in a cartel, but they use bilateral contacts with the supplier to promote or ensure through the latter that they all practice the same PVP in the market retailer.
 
This is a practice that harms consumers and, in competition terminology, is called a hub-and-spoke.
 
These are the first cases of hub-and-spoke investigated in Portugal. It should be noted that the practices now investigated lasted several years, between 2003 and 2017.
 
The three cases where the AdC now adopts Statements of Objections do not exhaust ongoing investigations into the food retail distribution, some of which are still subject to justice secrecy.
 
In this regard,  the AdC carried out dawn raids in facilities of 44 entities, during 2017, and the results were incorporated in 16 antitrust cases, more than ten of which in this sector.
 
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 Statements of Objections were issued on 21 March 2019.
 
22 March 2019