Danone, Nestlé and Lactalis fined for roles in alleged Spanish raw milk cartel


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Danone, Nestlé and Lactalis fined for roles in alleged Spanish raw milk cartel

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Eleven dairies, including Danone, Nestlé and Lactalis, have been fined nearly €90m for allegedly colluding on the price paid to Spanish farmers for raw milk. 

The Spanish National Commission of Markets and Competition (CNMC) announced earlier this week it had issued fines totalling €88.2m (US$97.3m) to 11 dairies for exchanging sensitive information on the purchase price and supply of unpasteurised milk. 

“Anticompetitive practices carried out by offenders consisted of exchanging information at national and regional level on purchase prices of raw cow’s milk, livestock purchase volumes, and surplus milk," ​it said in a statement.

Worst hit by the ruling was Danone Copirineo, which has been ordered to pay €23.2m (US$25.6m) penalty.

Grupo Lactalis Iberia and Nestlé Espana face respective fines of €11.6m (US$12.8m) and €10.6m (US$11.7m).

Fines were also issued to Corporacion Alimentaria Penasanta (€21.8m),  Puleva Food (€10.2m), Calidad Pascual (€8.5m), Senoble Ibérica (€929,644), Central Lechera Asturiana (€698,477), Gremio de Industrias Lácteas de Cataluña (€200,000), Asociación de Empresas Lácteas de Galicia (€100,000), and Central Lechera de Galicia (€53,310).

In statements sent to DairyReporter.com, Danone and Nestlé said they will appeal the CNMC decision. 

High Court appeals

A Nestlé Espana spokesperson said: “Nestlé strictly enforced the law and believes that, for its part, has not been committed or been credited any breach of the rules of competition advocacy. Consequently, Nestlé lodged appeal to the High Court against the decision of the CNMC."

Danone has disputed the claims, insisting it has "always acted within the law and in particular with the antitrust rules."

"With all due respect to this institution, Danone completely and categorically disagrees with the decision taken by the CNMC and will therefore appeal the decision to the National High Court, and trusts it will agree," ​said a Danone spokesperson.

DairyReporter.com approached French dairy giant Lactalis for comment, but no reply was forthcoming prior to the publication of this article.

"Joint strategy"

The fines were issued by CNMC on the back of a report submitted to it by regional competition authority, El Servicio para la Defensa de la Competencia de Castilla y Leon.

It launched an investigation following a complaint by the Unión de Pequeños Agricultores (Union of Small Farmers).

“After an investigation, which included simultaneous searches at the headquarters of some of the major companies and following the instruction of the corresponding penalty proceedings, CNMC has considered that Asociación de Empresas Lácteas de Galicia (AELGA), Calidad Pascual, Central Lechera de Galicia, Central Lechera Asturiana, Central Lechera de Galicia (CELEGA), Corporacion Alimentaria Penasanta (CAPSA), Danone Copirineo, Gremio de Industrias Lácteas de Cataluña (GIL), Grupo Lactalis Iberia, Nestlé Espana, Puleva Food and Senoble Ibérica have engaged in anticompetitive conduct that violates competition law," ​said CNMC.

These “strategic information exchanges”​ led to the development of “joint strategy to control the supply of raw cow’s milk."

“This information allowed companies to adjust their behaviour and avoid offering better prices and trading conditions to farmers, and limited competition in the raw milk supply market,” ​it added.

Despite the CNMC action, Unión de Pequeños Agricultores says it is "disappointed"​ as retailers, which it describes as "the real culprits behind the collapse of milk prices and the dairy farming crisis" in Spain, have gone unpunished. 

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