The Luxembourg Competition Authority found a RPM in the food distribution sector and imposes a record-breaking fine

In what seems to be one of the most important Luxembourg competition case over the past years the Luxembourg Competition Authority (LCA) has found the German food company Bahlsen and three grocery stores, Auchan, Cactus and Delhaize to have implemented anticompetitive price vertical restraints (decision of 20 November 2020, nos. 2020-FO-03, 2020-FO-04 and 2020-FO-05CA).

The LCA opened by its own initiative an antitrust investigation against the parties in 2015 when it surprisingly found out that the cakes and biscuits produced by Bahlsen had the same resale prices in many shops in Luxembourg. Evidence collected in the following investigation showed that over the 2011-2015 period Bahlsen, together with Auchan, Cactus and Delhaize, have jointly fixed the reselling prices of a wide range of cakes and biscuits marketed by the German company.

In practice, the grocery stores complied with the selling prices ‘recommended’ by the manufacturer in exchange of financial incentives in the form of rebates given by Bahlsen. Although the selling prices in question were labelled by the parties as ‘recommended’, the LCA took the position that the practice under investigation in substance was tantamount to imposed reselling prices that the retailers had effective charged on customers. Such practice amounted to a resale price maintenance agreement (RPM) banned by Article 101 TFEU and the equivalent Article 3 of the Luxembourg law of 23 October 2011. The LCA also outlined the negative effects of the practice that resulted in higher prices paid by consumers for the Bahlsen-branded products.

In light of the above, the LCA imposed on the parties competition fines amounting to a total of € 3,356,656.00 and more precisely: Bahlsen: € 1,502.343.00; Auchan: € 246,558.00; Cactus: € 1,384,413.00; Delhaize: € 223,342.00. The fine to be imposed on Bahlsen was reduced considering that the manufacturer filed a leniency application and cooperated with LCA. The fine imposed on Cactus was the highest because its sale revenue in Luxembourg was higher than those of the other parties. The fines imposed on Auchan and Delhaize were adjusted to preserve their deterrent function. Though these groceries had smaller market shares in Luxembourg, they were global players with a considerable worldwide turnover.

In conclusion, this is the first time the LCA succeeded in establish an illegal RPM. Consistently with the position of the European Commission, the decision confirms that a RPM is a serious competition breach that may attract hefty competition fines. The decision also illustrates the benefits in term of fine reduction for a successful leniency applicant.


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