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Supermarkets fined €24 million for price fixing

Photo by Rafael Marchante - Supermarkets fined €24 million for price fixing.The Portuguese Competition Authority (AdC) is fining the supermarket chains Auchan, Pingo Doce, Modelo Continente, and the company Bimbo Donuts, for setting prices, in a total fine of 24.6 million euros.

The AdC regulatory authority who ensure the proper functioning of the market economy and consumer protection explains that it “sanctioned three supermarket chains – Auchan, Modelo Continente and Pingo Doce – as well as the common supplier Bimbo Donuts for having participated in a scheme to set prices for sale to the consumer”.

The AdC indicates that “through contacts established through the common supplier, without the need to communicate directly with each other, the participating distribution companies ensure the alignment of retail prices in their supermarkets, in a conspiracy equivalent to a cartel, known in the terminology of law competition as ‘hub-and-spoke’”.

This practice, warns the authority, “eliminates competition, depriving consumers of the option of better prices, ensuring better levels of profitability for the entire distribution chain, including supply chains and supermarkets.”

Thus, the final decision resulted in a total fine of €24.6 million, with Auchan having a fine of €2.9 million and Modelo Continente and Pingo Doce of €7.1 million each. Bimbo Donuts was fined €7.3 million.

In the current case, “AdC’s investigation determined that the practice lasted for at least 11 years – between 2005 and 2016, and aimed at various Bimbo Donuts products, such as sliced ??bread, Donuts, Bollycao or Manhãzitos”, said the competition, which in the decision now adopted “imposed the immediate cessation of the practice, since it cannot be excluded that the investigated behavior is still ongoing”.

“In December 2020 and as recently as November 2, 2021, AdC had already condemned these and three other supermarket chains and three beverage suppliers – Sociedade Central de Cervejas, Primedrinks and Super Bock – for the same type of practice”, says the Competition Authority.

The AdC points out that “the sanctioning decisions of the AdC may be appealed” and that “the appeal does not suspend the execution of the fines”.

“Companies may request the Competition, Regulation and Supervision Court to suspend the execution of the decisions if (a) they demonstrate that they cause them considerable damage and (b) offer an effective guarantee in their place”, stressed the AdC.