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Friday, June 19, 2015

Retail price fixing - when it is and when it is not (the case of Germany and Romania)

At the end of 2014 the Romanian Competition Council sanctioned Metro, Selgros, Mega Image (Delhaize) and almost two dozens of their suppliers (Danone and Pepsi, among them) for agreeing that promotions supported and organized in cooperation, under the condition of exclusivity, were deemed to constitute nothing else than ”indirect” fixing of the price the same suppliers offered to competing retail chains.
This is a curious variation of resale price maintenance, which should rather refer to behaviors such as those sanctioned by Bundeskartelamt (Metro got hit again!).  Otherwise, equating exclusivity (for certain promotions only) to a per se infringememt of the competition rule, results in over-enforcement, to say the least.
To be continnued...

See details from Reuters bellow:

German cartel office fines food retailers over price fixing

18-Jun-2015 14:02:24
  • Cartel offices fines retailers, producers 152 mln euros
  • Retailers asked producers to fix prices at rivals
  • Germany's Metro among companies fined

FRANKFURT, June 18 (Reuters) - Germany's cartel office has so far levied fines of 151.6 million euros ($173 million) against seven food retailers and four producers in connection with price fixing of some products.
The cartel office said investigations at producers and retailers over price fixing of pet food and body care were now closed, while those at makers and sellers of confectionery, coffee and beer would be completed in the coming months.
"In food retailing, as in all other sectors, retailers and producers must not reach agreements on store prices that work to the disadvantage of consumers," cartel office president Andreas Mundt said in a statement.
The case involved not only producers agreeing set prices. Retailers themselves also demanded that producers ensure unified prices at rival retailers, the office said.
The office only penalised pricing practices where there clearly was a restriction of competition and a violation of competition law, Mundt said.
The size of the fines for individual companies was not disclosed. The fines varied according to the degree of involvement of each company, the office said.
German retailer Metro MEOG.DE and supermarket chains Rewe and Aldi were among the companies fined.
Metro said the office's investigation had been closed after it agreed to a settlement payment.
"Irregularities at a former purchasing company of Metro Group were targeted in the cartel office's investigation into coffee and confectionery," the company said, adding that it regretted the missteps, which happened a long time ago.
Metro shares rose 0.9 percent by 1100 GMT, compared with a 1 percent fall in the mid-cap Mdax.MDAXI index.
Aldi said it had assisted in clearing up the situation and had accepted a fine to bring the case to an end.

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