The director of cartels in the EU’s antitrust department, Eric Van Ginderachter, stated last week that the food sector in Europe will see increased cartel enforcement activity in 2014 by the European antitrust regulator, the European Commission (“Commission”).

This announcement comes on the heels of the decision in November 2013 to impose fines totalling €28.7 million on participants in the North Sea shrimp cartel case, as well as recent, active cartel enforcement in the food sector by a number of the national competition authorities of Member States, including:

  • the German national competition authority imposed fines amounting to €280 million on three major German sugar manufacturers for concluding anti-competitive agreements on sales areas, quotas and prices (February 2014), as well as imposing fines totalling €106.5 million on a number of brewers on account of illegal price fixing agreements for beer (January 2014);
  • the Spanish competition authority conducted dawn raids at the premises of producers of turrón, a variety of nougat, in respect of suspected price fixing and market sharing (November 2013); and
  • the Romanian competition authorities raided a number of dairy companies on suspicions of anti-competitive practices in the milk products market (October 2013), in addition to carrying out a dawn raid in connection with a suspected purchasing cartel for grain (August 2013).  

Currently, the Commission is also investigating a potential cartel in the production and sale of canned mushrooms.  

Competition scrutiny in the food sector has not been confined to cartel enforcement, but has also extended to the food supply chain.  Late last year, the Commission commissioned a study into competition on food-retail markets, which it plans to release in the coming months. The study is being carried out by a consortium comprising Ernst & Young, Arcadia International and Cambridge Econometrics. The study will examine whether increased concentration of retailers and food manufacturers, or other factors such as private label success and socio-demographic characteristics, have hampered choice and innovation in the European food supply chain.  

 A similar inquiry has recently been undertaken in Greece, examining the production, distribution and retail of fresh fruit and vegetables, whilst in August 2013, the Finnish government introduced a change in legislation whereby the Finnish competition authority will have greater scope for monitoring competition in the grocery store sector from early 2014. 

Comment

The European competition regulators have been investigating the food sector ever more closely in recent years, as is evident from the recent cartel enforcement activity of the Commission and the active interest in the sector on the part of various national competition authorities across Europe.  

This recent statement by the Commission’s director of cartels reinforces that the food sector will come under increased scrutiny in the coming months and provides a timely reminder for companies to take stock of the measures they have in place to ensure that their business practices are complaint with competition laws.