On 13 May 2011, the Irish Competition Authority (the “Authority”) carried out a “dawn raid” at the premises of the Irish Farmers Association (the “IFA”) in Bluebell, County Dublin in accordance with section 45 of the Irish Competition Act 2002 (the “Act”). The search was part of an ongoing investigation by the Authority into alleged price-fixing in the liquid milk market and followed incidents involving the disruption by groups of farmers of normal business at certain retail outlets.
Under section 4 of the Act, agreements between undertakings, decisions by associations of undertakings and concerted practices which have, as their “object” or “effect” the prevention, restriction or distortion of competition or trade in any goods or services in Ireland are prohibited. In this connection, direct or indirect price-fixing is viewed as a particularly serious offence under the Act. The Act also provides for criminal penalties of up to five years in prison (for individuals) and fines of up to €4 million or 10 per cent of aggregate turnover (whichever is the greater) for individuals and undertakings.
Under the Act, the Authority may investigate alleged anticompetitive behaviour either as a result of a complaint or on its own initiative. Where evidence of anticompetitive behaviour is uncovered, the Authority may bring court proceedings against the parties involved or refer the matter to the Director of Public Prosecutions.
On 26 May 2011, approximately 8,000 farmers protested in Dublin against the search by the Authority and against their treatment by retail chains. The farmers claimed that the Authority had failed to investigate the grocery and meat trade and the low prices paid by retailers to producers. IFA President Mr John Bryan stated “Any law that protects retailers and criminalises farmers is wrong. Our competition law is flawed and the law must be changed.” The IFA claimed that below-cost selling of farm produce is being funded by farmers, not supermarkets, and when farm produce prices have dropped, cost savings enjoyed by the multiples are not passed on to consumers in the form of lower prices.
The Authority will not typically comment on an investigation whilst an investigation is in train. However, on this occasion, the Authority felt it appropriate to respond to the comments made by the IFA. The Authority issued a statement which noted that the search undertaken at the IFA’s premises was carried out in a highly professional manner by experienced members of the Authority’s investigative staff, including a Detective Sergeant on full-time secondment to the Authority from the Garda Bureau of Fraud Investigation. The statement also pointed out that the work of the Authority is focused on protecting competition in order to benefit consumers and the economy as a whole and that it uses its statutory powers to that end.
At the time of the protest, a spokesperson for Mr Richard Bruton (Irish Minister for Jobs, Enterprise and Innovation) said that holding talks with the IFA about the Authority’s search would be inappropriate as the investigation was still continuing. However, on 7 June 2011, the IFA met with Minister Bruton, but it is understood that the topic of the Authority’s raid was not discussed. Minister Bruton was however asked by the IFA to act without delay to introduce legislation contained in the Fine Gael and Labour coalition programme for government to curb the buyer power of retail multiples. The delivery date of that legislation is unclear.
The Authority’s investigation is ongoing.