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AdC imposed fines on six large retail food chains and two suppliers for price fixing

Modelo Continente |
The AdC Autoridade da Concorrência imposed a total fine of circa €304 million on six large food retail chains, two beverage suppliers, a board member and a director for price fixing of the suppliers’ products, a practice which seriously harms consumers.

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The first decision adopted by the AdC concerns concerted pricing between Modelo Continente, Pingo Doce, Auchan and Intermarché, as well as supplier Sociedade Central de Cervejas (SCC), a SCC board member and a business unit director of Modelo Continente.

In a second decision, the AdC fined the same four large food retail chains (Modelo Continente, Pingo Doce, Auchan and Intermarché), as well as Lidl and Cooplecnorte (E. Leclerc), for concerted pricing through spirits supplier Primedrinks.

In the first case, the AdC’s investigation determined that the distributors and the supplier concerted prices for more than 9 years – between 2008 and 2017. This concerned several SCC products, such as beers Sagres and Heineken, ciders and sparkling water such as Bandida do Pomar and Água do Luso. The practice included bringing prices up gradually and progressively in the retail market.

In the second case, the practice of concerting prices for various products in Primedrinks' portfolio - which includes wines from Esporão and Aveleda producers, whiskies such as The Famous Grouse or Grant´s, Hendrick’s gin or Stolichnaya vodka - lasted more than 10 years between 2007 and 2017, and also aimed at the gradual and progressive rise in prices in the retail market.

Through a common supplier, companies ensured the alignment of sales prices to the public, thus restricting price competition between supermarkets and depriving consumers from the benefits of price differentiation.

In the current two decisions, the AdC also imposed an immediate halt to the practice, since it was not possible to rule out that the investigated behaviour is still ongoing.

The sanctioned practice, referred to in competition terminology, as “hub-and-spoke”, is considered very serious and harmful to consumers since it deprives them of choice at the best price.

These are the first decisions in Portugal for a “hub-and-spoke” practice and sanction groups which represent the most important part of the large retail distribution market, thus affecting the majority of the Portuguese population.

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