Washing powder, power cables, car and truck bearings, polyurethane foam, and North Sea shrimps. What do these have in common? All have had to pay millions of Euros in settlement to the European Commission due to infringements of competition law. Canned mushrooms is but the latest product in the food sector to fall to the growing scrutiny of the Commission.
A Commission investigation revealed that four producers had become involved in a strategy of mutual benefit, a so called ‘non-aggression pact’, whereby they worked together to coordinate prices and share customers. They had aimed to safeguard their companies against an unexpected drop in prices that could have lead to serious financial issues to their business and industry.
This lasted for over a year and created a price fixing and market sharing cartel in the canned mushroom industry. The cartel involved sharing confidential information about customers between the companies and even a compensation scheme was put in place to make sure that each company was adequately remunerated for the loss of a customer to another.
A settlement between the cartel members and the EU Commissions was reached and it went further than the previous 28.7 million Euros imposed upon North Sea shrimp traders a few months earlier. The four perpetrators in this case were Lutece, Bonduelle, Prochamp and Riberebro, the last of which who’s liability is not proven and is still subject to investigation. The amount paid by each varied due to the new settlement procedure introduced in June 2008 by the Commission.
Lutece whistleblew the cartel and in doing so escaped a 20.7 million Euro fine, as provided by the Leniency notice. On the other hand, Bonduelle only got a 10% reduction under the Settlement Notice and ended up paying over 30.2 million Euros. Prochamp benefitted from a 30% reduction under the Leniency Notice due to cooperation and a 10% reduction under the Settlement.
The case is yet another reminder of the benefits of being first through the door to the Commission to seek the immunity granted under the Leniency Notice.