02. Aug 16

Illegal price-fixing agreements for beer: Bundeskartellamt imposes high fines

The Bundeskartellamt, Germany’s Federal Cartel Office, has imposed fines totalling 242 million euros due to illegal price-fixing agreements between manufacturers and trading companies.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Imposing fines totalling around 242 million euros, the Bundeskartellamt has according to its own statements almost concluded one of its most costly fine proceedings to date, with this having begun as early as January 2010. By entering into illegal price-fixing agreements regarding retail prices, manufacturers and trading companies violated antitrust law. The commodity groups affected were beer, coffee, confectionary, pet food and personal care products / toiletries.

Fines totalling approx. 90.5 million euros were issued on account of price-fixing agreements between a brewery and distributors concerning the retail prices in stores for various kinds of beer. According to the Bundeskartellamt, additional fine notices were issued with respect to the coffee and confectionary sectors.

According to information provided by the competition authorities, the brewery and several distributors were said to have made arrangements to increase retail prices for various kinds of beer and hoped that these price increases would catch on among other distributors. The victims of these types of arrangements were said to be consumers. The proceedings in question, which have now been virtually concluded, concerned so-called vertical agreements, i.e. agreements between producers and retail chains. These agreements are prohibited in the same way as agreements reached by manufacturers or distributors among themselves.

Agreements that hinder fair competition can result in severe penalties pursuant to antitrust law. These are not limited to fines. The companies concerned may also be faced with claims for damages or consequences under criminal law. This equally applies to the governing bodies of these companies.

Infringements of antitrust law are not always as obvious as in the case, for example, of price-fixing agreements. It is also possible for seemingly insignificant contractual clauses to give rise to violations of antitrust law and thus unpleasant consequences. For this reason, it is advisable to have agreements reviewed by experienced lawyers having particular regard to any concerns from the perspective of antitrust law. This also applies in the event that claims have already been asserted again the company due to alleged violations of competition law or one desires to assert claims against other companies.

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