The Competition Agency has announced fines for infringements of the Competition Act in the bread producers cartel case, the first time it has used its powers to impose fines since the act came into force on October 1 2010. However, taking into consideration the amount of the fines (approximately €6,700 on the Association of Craftsmen Osijek, approximately €200 on bread producers who raised prices and approximately €68 on bread producers who participated in the meeting but did not raise bread prices), they appear to be largely symbolic.

In July 2001 the agency opened formal antitrust proceedings after it received an email enquiring as to the legality of an agreement on new bread prices announced at a press conference following the bakery section of the Association of Craftsmen Osijek's meeting on February 16 2011. The agency established that the association and 17 bread producers active in Osijek-Baranja County had entered into a prohibited agreement by setting out a guide price of HRK8 for white bread. Allegedly, invitations to the cartel negotiations were sent together with invitations to the annual masquerade party.

Although such agreements are considered to be a hardcore restriction of competition rules, in its decision the agency highlighted the fact that the distortion of competition in this case was insignificant and took into account the following mitigating circumstances:

  • the members of the cartel had no significant market power in the relevant market;
  • the cartel operated only in Osijek-Baranja County and for a short period (from February 16 2011 to June 14 2012);
  • most of the bread producers were unaware of the price agreement's illegality; and
  • not all attendees at the meeting subsequently raised their prices.

Therefore, the agency decided to impose only symbolic fines. It is hoped that these will provide a sufficient deterrence for undertakings, as well as afficilated associations, from engaging in anti-competitive behaviour.

For further information on this topic please contact Gabriele Wahl Cesarec at Petres & Cvirn by telephone (+385 1 4813 244), fax (+385 1 4813 073) or email (g.wahlcesarec@pc-lawfirm.com).

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