The AdC (Portuguese Competition Authority) has sanctioned three supermarket chains – Auchan, Modelo Continente (Sonae Group), and Pingo Doce (Jerónimo Martins Group) – as well as their common supplier of cosmetics and personal care products Beiersdorf and one of its managers, for having participated in a scheme of price fixing on retail prices.
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The AdC’s investigation concluded that by means of contact established through the common supplier, without the need to communicate directly with each other, the participating distribution companies ensured the alignment of retail prices in their supermarkets.
This conspiracy is equivalent to a cartel and is known in competition law terminology, as “hub-and-spoke”.
Such behavior eliminates competition, depriving consumers of the option of better prices, ensuring better levels of profitability for the entire distribution chain, including the supplier and the supermarket groups.
In December 2020, the AdC issued a Statement of Objections for the current case, providing all companies the opportunity to exercise their right to be heard and to defend themselves. Such defenses were duly considered in the final decision.
The AdC’s investigation in the current case allowed to determine that the behavior lasted for seven years – between 2011 and 2017 – and targeted several products in the personal care and cosmetic areas, such as deodorants, sunscreens, lip balms and facial creams.
Since the unannounced inspections carried out in 2017 among large retailers, the AdC has sanctioned six supermarket groups and eight suppliers in similar hub-and-spoke cases. The sanctioning decisions issued between 2020 and 2022 have so far amounted to fines in excess of €664 million.
The sanctions now issued resulted in a total fine of €19.469.276.
The total fine is detailed as follows: Auchan (€2.660.000), Modelo Continente (€7.520.000), Pingo Doce (€4.880.000), Beiersdorf (€4.400.000), Individual manager (€9.276,80).
The fines imposed by the AdC are determined by the sales turnover of the sanctioned company in the affected markets in the years of the sanctioned behavior.
In addition, according to Portuguese Competition Law, fines cannot exceed 10% of the company’s turnover in the year prior to the sanctioning decision (and 10% of the annual remuneration earned in the last year of the infringement, in the case of individuals). ■