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Supermarkets Fined For Price Fixing

The Competition Authority (AdC) has fined Auchan, Modelo Continente, Pingo Doce, and beauty, cosmetics, and personal care products supplier JNTL Consumer Health 16.9 million euros for their participation in a pricing fixing scheme.

Thus, “the investigation conducted by the AdC showed that the participating distribution companies adopted behaviours with the aim of adjusting retail prices in their supermarkets, softening competition, through contacts established through the common supplier, without the need to communicate directly with each other.”

According to the entity, “this is a conspiracy equivalent to a cartel, known in competition law terminology as ‘hub-and-spoke,'” which “eliminates competition, depriving consumers of the option of better prices, but ensuring better levels of profitability for the entire distribution chain, including supplier and supermarket.”

The AdC recalled that, on the 15th of March 2022, it adopted the notice of illegality, or indictment, in this case, “having subsequently given the opportunity to all companies to exercise their rights of hearing and defence, which was duly considered in the final decision.”

The regulator “determined that the practice lasted more than fifteen years – between 2001 and 2016 – and targeted various products of the supplier in the areas of cosmetics and personal hygiene, such as tampons, shampoos, absorbent dressings, and mouthwashes for daily use.”

Thus, the AdC imposed a total fine of 16.9 million euros, distributed among the companies, and the highest fine is the one to Modelo Continente, with 7.65 million euros.

To JNTL Consumer Health Portugal, the AdC imposed a fine of 4.44 million euros, and Pingo Doce was fined 3.33 million euros. Finally, the Competition fined Auchan 1.48 million euros.

“The fines imposed by the AdC are determined by the turnover of the companies sanctioned in the affected markets in the years of practice,” he recalled, explaining that “according to the Competition Law, the fines cannot exceed 10% of the turnover of the companies in the year prior to the sanction decision.”

These decisions, “may be subject to appeal”, and this “does not suspend the enforcement of fines.”

“Since 2020, the AdC has triggered more than a dozen lawsuits that have resulted in fines imposed on six supermarket chains and ten suppliers for the anti-competitive practice of ‘hub-and-spoke.'”

Samantha Gannon

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