UOKiK (Polish Competition Authority) has fined pet food producer Royal Canin Polska and its five distributors for restricting distribution channels of “Veterinary Diet” products. The aggregate fine amounts to PLN 3.2 million (c. € 0.77 million).
According to the UOKiK, the above entities agreed to restrict distribution of the ”Veterinary Diet” (which belongs to a group of diet feed mixes) to veterinary offices which did not conduct sales through the Internet. Then the restriction was modified and the products could only be distributed to resellers who guaranteed the supervision of the veterinarian. Therefore the restriction concerned not only Internet sales but also sales by veterinary technicians and veterinarian and zoological wholesalers.
Royal Canin Polska argued that under European case-law, selective distribution systems, which chose resellers on basis of their qualifications and professionalism, are in line with the competition law if the nature of the product justifies such restriction. It argued that “Veterinary Diet” covering therapy and right choice of feed for particular nutritional purposes requires veterinary supervision.
UOKiK rejected this argument and stated that the judgments referred to by Royal Canin Polska could not apply to the present case for two reasons. First, contrary to these cases, the law concerning diet feed mixes provides detailed rules on labeling and presentation of such products. The duty to use these products correctly rests on the pet keepers and the law does not transfer such obligation to the sellers. Additionally, the law explicitly provides for the possibility of distance sales of these products. Second, in the referred cases, the companies had implemented selective distribution systems when they began to market these products. Here, the implementation had begun several years after placing the “Veterinary Diet” on the market.
UOKiK in support of its position set out the similarity of the present case with the case of Pierre Fabre (C-439/09), which concerned the sale of non-prescription medicines and contact lenses. In that case, the Court of Justice did not accept the need to provide individual advice to the customer and ensure his protection against incorrect use of products in order to justify a ban on Internet sales.
UOKiK found that the conduct of Royal Canin Polska and its distributors had restricted competition which, in turn, had resulted in increased prices for consumers.
The decision is not final and has already been appealed against.