French Competition Authority, decision n°13-D-03 dated February 13, 2013 relating to practices in the sector of delicatessen pork meat
The French Competition Authority has struck again in the food processing industry, sanctioning cartels in the slaughter and sale of delicatessen pork meat sector. These sanctions follow complaints from pork breeders and concern eight pork slaughter houses and two professional organisations which limited production on the pork slaughtering and meat cutting market, fixed purchase prices, issued price recommendations, fixed a minimum sales price to the mass retail outlets or exchanged information on the withdrawal prices on the pork market in the Brittany region .
The Authority refused to exempt the joint fixing of a base pork price as a substitute to the lack of official quotation due to a dysfunction in the auction market for pork in Brittany. The Authority admits that this price fixing could satisfy the first exemption condition set by article L.420-4 I, 2° of the French commercial code in that it could lean towards the improvement of production and the objective of market stabilisation provided by article 39 of the Treaty on the functioning of the European Union, but it considers that the practice was not the least restrictive of competition solution.
In practice, the Authority only exceptionally grants the exemption provided by article L.420-4 I, 2° of the French commercial code or article 101, paragraph 3, of the TFEU.
Lastly, as the majority of the companies incriminated decided not to contest the objections, the main contribution of this decision lies in the conditions in which the sanctions were fixed. The Authority imposed a separate financial sanction for each of the infringements deemed to have a separate objective, to concern a different period and different parties. Regarding the criteria for determining these sanctions, the following elements are note worthy:
- seriousness of the practices: the Authority takes into account specific factors such as the particular factual context involving the pressure applied on the one hand by the food processors and the mass retail outlets and on the other hand the pork breeders concerns over their revenues;
- damage to the economy: the impact of one of the practices on the average price of pork is established by a comparison with pork prices in France and in Germany;
- individualisation: reduction of one of the sanctions by 60 % due to the single product nature of the activity (95% of the activity devoted to the purchase, slaughter and cutting of pork meat), 10% increase of two of the sanctions as a result of belonging to a large group;
- not contesting the objections and submitting commitments: 10% reduction merely for not having contested and 18% reduction for not having contested and submitting a compliance programme.