Twenty-one sausage manufacturers in Germany have been hit with fines worth a total of EUR338m for fixing prices.
Companies including Nestle, Dutch meat products suppier VION and Swiss firm Bell Group are said to have taken part in deals to fix prices for categories like sausage and ham.
Germany’s competition watchdog, the Bundeskartellamt, claimed it had statements and documents that proved a “basic consensus” among manufacturers to inform each another regularly about demands for price increases. Suppliers were then able to demand higher prices for their products from the retail trade.
The Bundeskartellamt said sausage manufacturers had regularly met over several decades within the so-called Atlantic Group, named after their first meeting place, the Hotel Atlantic in Hamburg, to discuss market developments and prices.
In addition to the Atlantic Group meetings there had been agreements between several sausage manufacturers, particularly since 2003, to jointly implement price increases for the sale of sausage products to the retail trade, the Bundeskartellamt said.
Price ranges were agreed for the product groups of raw, boiled and cooked sausage and ham. Due to the different types of items and package sizes, it was not possible to set specific prices for individual products, the watchdog asserted.
Andreas Mundt, president of the Bundeskartellamt, said: “The price-fixing agreements were practised over many years. The overall amount of fines seems high at first glance but has to be seen in perspective in view of the large number of companies involved, the duration of the cartel and the billions in turnover achieved in this market.
“We have maintained a sense of proportion in particular in setting fines in this case in view of the several small and medium-sized companies active in this sector. For the companies’ benefit we have taken into account the special position of the manufacturers between the food retail trade on the one side and the meat trade on the other, which is just as concentrated. We have also taken the economic situation and financial capacity of each individual company into consideration where relevant evidence was submitted.”
The Bundeskartellamt said it would not disclose information about individual fines but said the penalties ranged from “a few hundred thousand euros to high amounts in millions”. The fines were based on factors incluing the duration of the infringement, the so-called “cartel-related turnover” – sales achieved by the company with the products that were the subject of the cartel agreement – and the overall turnover of the group.
The statutory level of fines amounts up to 10% of the overall turnover. The Bundeskartellamt said some 85% of the fines falls on the cartel members belonging to a “company group”. The average fine for the 15 small and medium-sized companies involved amounts to a “low one-digit million amount”, accounting for on average around 2% of their annual turnover, it added.
An anonymous tip-off first alerted the watchdog, which said 11 companies had co-operated with it and confessed during its investigation. That co-operation provided was taken into account as a mitigating factor in the calculation of the fines. The fining decisions are not yet final and can be appealed within two weeks to the Düsseldorf Higher Regional Court.