On 22 March 2017, the BCA, imposed a EUR 5.5 million fine on Algist Bruggeman for resale price maintenance and abuse of dominance on the market for fresh yeast.
Algist Bruggeman is the largest supplier of yeast products in Belgium and supplies fresh yeast to industrial, semi-artisanal and artisanal bakeries. Whereas the industrial bakeries are supplied by Algist Bruggeman directly, the semi-artisanal and artisanal bakeries are provided with fresh yeast from Algist Bruggeman through a broad network of distributors. On the basis of information received in 2012, the BCA initiated an investigations into the alleged anti-competitive behaviour of Algist Bruggeman and carried out inspections at the premises of Algist Bruggeman and one of its distributors.
In its decision, the BCA first held that the recommended resale prices issued by Algist Bruggeman issued to its distributors amounted in reality to fixed resale prices since distributors were not allowed to grant discounts without prior consent from Algist Bruggeman. Such consent would only be granted in cases where bakeries were on the verge of switching to competing yeast products. Moreover, approved discounts were reimbursed by Algist Bruggeman to the distributors, contrary to non-approved discounts, and non-complying distributors were pressured (under the threat of sanctions) not to deviate from the "recommended" price. In addition, Algist Bruggeman discouraged each of its distributors to serve customers of other distributors.
Second, the BCA concluded that Algist Bruggeman had abused its dominance by granting its distributors individualised exclusivity, loyalty, and year-end discounts which dissuaded them to incorporate other brands into their portfolio. Algist Bruggeman had also entered into exclusive long term purchasing agreements with some of the bakeries, not allowing them to purchase competing products. Lastly, Algist Bruggeman undermined the reputation of low price competitors in its communication to the public, which, according to the BCA, could negatively affect the structure of the market since distributors or bakeries were dissuaded to use these products.
This is the first case where the settlement procedure was applied in a pure vertical case. Settlement decisions are made at the level of the Competition Prosecutor, without any involvement of the Competition College. Like in EU settlement proceedings, the companies involved in the investigation can benefit from a 10% reduction in fines for admitting their involvement in the infringement.