French private label dairy price fixing cartel hit with fines totalling €192.7m
The French Competition Authority today announced that 10 companies, including two Lactalis businesses, have been issued fines for colluding on the price of private label dairy products, such as yogurt, cottage cheese, and dairy desserts, between 2006 and 2012.
Eleven companies - Yoplait, Lactalis Nestlé Ultra Frais, Lactalis Beurres & Cremes Novandie, Senoble, Les Maîtres Laitiers du Cotentin, Yeo Frais, Laïta, Alsace Lait, Laiteries H Triballat and Laterie de Saint Malo - made "numerous" telephone calls and met in hotels that "changed each time for reasons of discretion" to "agree on prices and market share in the private label dairy sector," said a French Competition Authority statement.
It said the companies coordinated on price increase, then developed arguments to justify the hikes.
Seeking leniency, Yoplait brought the cartel's practices to the attention of the French Competition Authority in August 2011.
It subsequently escaped a €44.7m (US$47.4m) fine.
Senoble followed Yoplait's lead, owing up to the French Competition Authority in February 2012.
Yoplait presented the French Competition Authority with a "secret diary," which detailed all decisions made during the exchanges.
The 11 cartel members, who control approximately 90% of the French private label dairy market, also signed "non aggression pacts," said the French Competition Authority.
"Did not dispute the facts"
Worst hit by the ruling was Lactalis Nestlé Ultra Frais, a fresh dairy joint venture established by Lactalis and Nestlé in 2006, which was ordered to €56.1m (US$59.5m).
Lactalis Beurres & Cremes was also fined €4m (US$4.25m).
Novandie, the company behind Mamie Nova dairy desserts, was fined €38.3m (US$40.7m), Les Maîtres Laitiers du Cotentin €22.9m (US$24.3m), Yeo Frais €12m (US$12.7m), Laïta €8.1m (US$8.6m), Alsace Lait €3.6m (US$3.8m), Laiteries H Triballat €1.4m (US$1.5m), and Laterie de Saint Malo €300,000 (US$318,500).
Senbole was issued a fine a €101.3m (US$107.5m), but this was reduced to €46m (US$48.8m) in light of its approach to the French Competition Authority in May 2012.
“…the companies in question, with the exception of the Laiterie de Saint Malo, did not dispute the facts and have benefited as such from a reduced sanction under the procedure of no contest grievances,” said the French Competition Authority.
"Extremely severe penalties"
While Lactalis Nestlé Ultra Frais and Lactalis Beurres & Cremes chose not to contest the allegations, they plan to appeal the ruling.
"These two companies chose not to dispute the notified grievances," said a statement sent to DairyReporter.com.
It said, however, that the decision to "impose these extremely severe penalties" demonstrates that the French Competition Authority has not carried out "a fair assessment of the economic environment and overstated the gravity of the facts and their impact on the economy."
"Groupe Lactalis intends to appeal this decision," it added.