Fines competition for five supermarkets and Sograb 17.3 million – Trade

The competition authority (AdC) announced that it has sanctioned five supermarket chains – Auchan, E.Leclerc, Intermarché, Modelo Continente and Pingo Doce – as well as joint supplier Sogrape and two persons responsible, with a fine of 17.3 million euros.

The subject of contention is a consumer sales pricing scheme, referring to the entity led by Margarida Matos Rosa.

In the statement informing this decision, AdC specifies that the responsible individual is the responsible, general manager of Sogrape and director of the business unit of Modelo Continente. The competition considers this practice of setting selling prices “harmful” to consumers, stating that this situation “affects the general Portuguese population” due to the size of the national market for the groups involved.

Through the investigation, the AdC concluded that “through contacts created through the common supplier, without the need to communicate directly with each other,” these supermarket chains ensure price alignment, in a “cartel-like plot,” a practice known as “Axle-spoke”.

In the words of competition, this practice deprives consumers of a better price choice, “which ensures better levels of profitability for the entire distribution chain, including suppliers and supermarket chains.”

The tastings compiled by AdC contain examples of contacts dated between 2006 and 2017, targeting several Sogrape products, such as wines from brands such as Mateus, Gazela and Casa Ferreirinha or Jack Daniel’s and Macallan whiskey.

This decision resulted in a total fine of 17.231 million euros, with Pingo Doce, of Jerónimo Martins, taking the largest stake (5.5 million euros), followed by Sogrape Distribuição (4.83 million euros) and then Modelo Mainland (4.3 million). The smallest fines are awarded to the responsible individual – two thousand euros and 13,500 euros.

AdC fines are determined based on the companies’ turnover of the “goods related to the infringement and for its duration.” According to the competition law, fines cannot exceed 10% of the company’s turnover in the year prior to the penalty decision.

Last year and this year, in November, AdC actually condemned these supermarket chains and three beverage suppliers for this type of practice. In addition, the competition also fined these supermarkets, as well as packaged bread and cake supplier Bimbo Donuts.

(updated news)