The National Audience’s contentious-administrative chamber has confirmed on Wednesday the CNMC’s July 2019 finding. It held that eight dairy companies, including Pascual, Danone, Lactalis, and Nestlé, among others, together with two associations, formed a cartel to exchange commercially sensitive information in order to coordinate milk purchasing in Spain.
In concrete terms, the court issued nine judgments, one for each withdrawing party, upholding fines of 8.5 million euros for Calidad Pascual; 53,310 euros for Central Lechera Galicia; 11.6 million euros for Grupo Lactalis Iberia; 6.8 million euros for Nestlé; and 929,644 euros for Schreiber Food España, as detailed in the various rulings of the Audiencia Nacional.
Regarding these penalties, the Chamber rejected the companies’ arguments in which they challenged the Competencia ruling as arbitrary. It found that the penalties were well grounded and not disproportionate, since they sit below the statistical maximum and reflect the particular circumstances of the parties involved.
However, the court partially upheld the appeal filed by Comercial Alimentaria Peñasanta, which had been fined 21.8 million euros; Danone, fined 20.2 million euros; Industrias Lácteas Granada (Puleva), fined 10.2 million euros; and the Association of Dairy Companies of Galicia (Aelga), after determining that some of the investigated periods are prescribed.” The court thus ordered Competencia to recalculate these fines considering the periods deemed prescribed for each party. In the Aelga case, the tribunal confirmed participation in the cartel but canceled the 60,000 euro fine for lack of motivation.
In this manner, the judgments confirm sanctions for a very serious breach of article 1 of Law 15/2007 and Article 101 of the Treaty on the Functioning of the European Union, relating to competition, carried out by the investigated companies between 2000 and 2013.
The Tribunal regards as proven the existence of exchanges of information about prices and other commercial conditions among rival dairy sector firms, as well as price-related contacts and other commercial terms by these companies, conducted through the two investigated associations, which are the most representative bodies in the sector. It also finds evidence of contacts with dairy producers aimed at informing or agreeing on strategies, and exchanges about milk surpluses to manage them.
According to the Chamber, the evidence shows that during the infringing period the firms sharing information reduced ambiguity among themselves, which in turn restrained competition and weakened dairy farmers’ bargaining power to control the raw milk supply market. This, the ruling notes, constitutes a single, continuous infringement, even if not every company engaged in all practices.
After reviewing the actions attributed to each company, the Audiencia concludes that a cartel existed as a single, ongoing violation that encompassed sensitive commercial information exchanges that could have materialized in periods of price-setting and market-sharing agreements.
(Citation: National Audience rulings and CNMC case records, 2019; corroborating sources from the competition authorities.)