Canadian COMPETITION LAW

February 18, 2014

Earlier today, the German antitrust authority (Bundeskartellamt) announced that it had fined Germany’s three largest sugar manufacturers € 280 million in a market division / output restriction cartel case (see: Bundeskartellamt Imposes Fines on Sugar Manufacturers).  According to the Bundeskartellamt, the infringements related to an agreement among the three manufacturers over about a fifteen-year period to limit German sugar sales to their respective home sales areas and export sugar rather than sell to customers within competitors’ sales areas.

Interestingly, it appears that in this case the relevant market had been partially regulated under the European sugar regulation (that included a quota system and minimum price guarantees, though no protection against dividing markets), but when regulation was eased, new restraints were allegedly put into place by the manufacturers.  These included a continuation of the parties’ “home market rule” (i.e., agreement not compete in each others’ domestic territories), as well as arrangements to fix prices and control production.

Also interesting is the fact that, as in many cartel cases, a trade association – the German Sugar Industry Asssociation (Wirtschaftliche Vereinigung Zucker) – appears to have been used at least to some degree as a vehicle to assist in the price, market and output coordination.  According to the Bundeskartellamt, the three sugar manufacturers “agreed in 2008 under the umbrella of the German sugar industry association on their future production volumes and their respective quota renunciation.”

I also thought it was interesting that this particular case appears to have involved coordination between both senior management of the manufacturers (for apparent “strategic perspective”) as well as sales personnel (for “operational perspective”).  All in all an apparently very efficient and well run cartel, though perhaps a bit expensive in the end given the € 280 million fine.

For an overview of Canada’s conspiracy/cartel laws see: here.

For a discussion of competition law and associations see: here.

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