On 25 January, the Competition Council imposed a fine for the first time since the entry into force of the new Belgian Competition Act in October 2006.
The Flemish bakers trade association VEBIC was fined € 29,000 for creating a detailed cost scheme and a bread price index, through which its members were encouraged to increase their prices.
Bread prices used to be regulated, but the sector has been liberalised since 2004. Shortly afterwards, the minister for economic affairs had requested the Council to investigate several consumer complaints, which alleged that VEBIC still prevented bakers from deciding their own prices.
In its decision, the Council acknowledged that trade associations may inform their members of cost-price developments in order to help them calculate their cost-price structure. But the Council ruled that the system set up by VEBIC went too far. The prices of every component were closely monitored and an average percentage increase per component, communicated in the form of a cost scheme, was created. This average percentage increase and the total increase of all cost price components were then linked to the price before liberalisation, which resulted in a bread price index indicating how costs had increased compared to the last regulated price. VEBIC distributed the price index together with the cost scheme to its members through newsletters and presentations.
The Council ruled that the information exchange reduced the need for bakers to make their own cost calculation and also encouraged them to increase their prices in accordance with the price index, irrespective of their individual specific cost structure. Therefore, the Council concluded that VEBIC had influenced the pricing policies of its members with the intention to harmonise prices. The Council believed that VEBIC aimed to encourage the bakers to increase prices by passing on the average cost price increases to consumers. It is interesting to note that the Council, in reaching its conclusion, drew upon assessments of similar information exchange systems by the European Commission and other national competition authorities.