On 24 July, the Spanish Competition Commission, (Comisión Nacional de la Competencia or “CNC”), made public that it has initiated formal proceedings against the following 8 milk producers and 2 trade associations: GRUPO LACTALIS IBERIA S.A., CORPORACION ALIMENTARIA PEÑASANTA S.A., DANONE S.A., PULEVA FOOD S.L., GRUPO LECHE PASCUAL S.A., NESTLÉ ESPAÑA, S.A., COOPERATIVA AGRÍCOLA Y GANADERA DEL PIRINEO SCCL, GREMIO DE INDUSTRIAS LÁCTEAS DE CATALUÑA and ASOCIACIÓN DE EMPRESAS LÁCTEAS DE GALICIA.

The CNC is investigating a potential market sharing agreement, exchanges of confidential information and the fixing of commercial conditions in the market for the purchase of raw milk. It is likely that the CNC investigation in this case will lead to allegations of a cartel agreement and with the potential for liabilities to go up to 10% of annual turnover world-wide for each of the offenders.

The CNC explains that on 11 and 12 July 2012, surprise dawn raids were carried out at the headquarters of various dairy companies and associations in Galicia, Cantabria and Cataluña as a result of numerous claims and complaints as well as press reports on alleged issues involving the milk industry. The CNC has not made public whether a leniency application has been lodged, although in practice this is normally the case in this type of infringement in Spain. Given the information gathered during the inspections and in view of other confidential information, the CNC has found credible grounds for the existence of practices prohibited by the Spanish Competition Act (LDC). The LDC provides for a maximum period of 18 months in order for the CNC to adopt its final decision.

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