Skip to main content

AdC sanctions Auchan, Modelo Continente, Pingo Doce and Beiersdorf for colluding on prices

20-06-2022

AdC sanctions Auchan, Modelo Continente, Pingo Doce and Beiersdorf for colluding on prices

carrinho de compras em frente a corredor de supermercado

Press Release 11/2022

June 20, 2022

The decision

The AdC (Portuguese Competition Authority) has sanctioned three supermarket chains – Auchan, Modelo Continente (Sonae Group), and Pingo Doce (Jerónimo Martins Group) – as well as their common supplier of cosmetics and personal care products Beiersdorf and one of its managers, for having participated in a scheme of price fixing on retail prices.
The AdC’s investigation concluded that by means of contact established through the common supplier, without the need to communicate directly with each other, the participating distribution companies ensured the alignment of retail prices in their supermarkets. This conspiracy is equivalent to a cartel and is known in competition law terminology, as “hub-and-spoke”.

Such behavior eliminates competition, depriving consumers of the option of better prices, ensuring better levels of profitability for the entire distribution chain, including the supplier and the supermarket groups.
For more information on the case, please see the AdC’s website.
Background
In December 2020, the AdC issued a Statement of Objections for the current case, providing all companies the opportunity to exercise their right to be heard and to defend themselves. Such defenses were duly considered in the final decision.
The AdC’s investigation in the current case allowed to determine that the behavior lasted for seven years – between 2011 and 2017 – and targeted several products in the personal care and cosmetic areas, such as deodorants, sunscreens, lip balms and facial creams.

Since the unannounced inspections carried out in 2017 among large retailers, the AdC has sanctioned six supermarket groups and eight suppliers in similar hub-and-spoke cases. The sanctioning decisions issued between 2020 and 2022 have so far amounted to fines in excess of €664 million.
The fines
The sanctions now issued resulted in a total fine of €19.469.276.
The total fine is detailed as follows:

Auchan

€2.660.000

Modelo Continente

€7.520.000

Pingo Doce

€4.880.000

Beiersdorf

€4.400.000

Individual manager

€9.276,80

The fines imposed by the AdC are determined by the sales turnover of the sanctioned company in the affected markets in the years of the sanctioned behavior. In addition, according to Portuguese Competition Law, fines cannot exceed 10% of the company’s turnover in the year prior to the sanctioning decision (and 10% of the annual remuneration earned in the last year of the infringement, in the case of individuals).
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 (see the AdC’s
Guidelines on the Methodology to be Used in the Application of Fines [in Portuguese]).
The sanctioning decisions may be appealed. The appeal does not suspend the execution of 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 see below “Q&A about “hub-and-spoke” cases in Large Distibution sector".

 

 

Questions & Answers - hub-and-spoke cases in the large retail sector

Q&A about hub-and-spoke cases in Large Retail sector.pdf
115 kb
pdf