CPG manufacturers fined $54 million for collusion

The German arms of Unilever, Kraft and Dr Oetker have been fined a combination of AUD$54 million by Germany’s competition authority, the Federal Cartel Office (FCO), for cartel activity.

The German FCO has fined the companies for holding secret talks to exchange anti-competitive information, such a details of contract negotiations with major German retailers.

In a statement the FCO said high-ranking sales executives from the companies met regularly over several years informing each other of their negotiations with retailers. The authority added some also exchanged information on planned price increases for retailers for some product categories. Offices were raided in April 2008. Proceedings against an unnamed fourth consumer goods manufacturer are still ongoing.    

Andreas Mundt, president of the FCO, said knowledge of prospective demands of retailers and the reaction of rivals could have affected the market.

"Competition is impaired by such practices, even if they are not classical hardcore agreements about prices, supply areas, customers or quotas," he said.

The three companies now have under two weeks to appeal against the fines. Unilever said it would not appeal.

"The investigation focused on information exchanged in 2006 and does not concern ongoing operations. Unilever reinforces and enhances its internal competition law compliance procedures on an ongoing basis," it said.

Kraft will also not contest the fine. “We have further strengthened our training efforts regarding correct behaviour of our staff whilst in contact with competitors and customers,” it said.

Mars revealed the existence of the cartel in 2008 in an application for leniency, and so did not receive a fine. Henkel AG & Co. was also a temporary member of the group, but also received no penalty.

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