French competition authority issues €93 million fine to ‘cartel’ in pork sector

The competition authority in France – the Autorite de la Concurrence – has fined 12 companies acting as a cartel in the ham and cold meats sectors a total of €93 million.

In the decision, made earlier this month, the authority found that 12 pork butchery/manufacturer businesses had coordinated to buy pork produce from slaughterhouses and/or also agreed on the price increase for the produce they intended to sell on.

The cartel was active, in various forms, from 2010 to 2013.

In a statement (originally published in French), the authority said that the 12 businesses “coordinated to present a common front during their negotiations with the slaughterhouses in order to counter requests for price increases on the raw material, or even to obtain price reductions”.

In addition, the manufacturers agreed to adopt a common position on the price increases for delicatessen products that they intended to apply to large-scale distribution for their private labels.

The produce concerned included raw ham, cooked ham, sausage and chorizo, among others.

The cartel was revealed through the so-called ‘leniency procedure’ in French law, whereby companies that participate in a cartel can disclose the cartel’s existence in return for more lenient penalties, or total exemption from penalties. Two of the companies involved came forward in this way.

The agreements implemented between the manufacturers concerned both “upstream” – i.e. the relationships of the manufacturers with the slaughterers who supplied the raw material – and “downstream” – i.e. the relations with retail costumers.

According to documents seized by the authority, the businesses would contact each other each week before negotiations with the slaughterhouses to arrive at a common negotiating position.

A similar process was then used for selling the manufactured produce onto the retail sector.

“These practices are serious: They have distorted commercial relations between pork butchers and slaughterers, on the one hand, and with large-scale retailers, on the other,” the authority said.

The discovery of cartels in French food and agri-produce sectors is not a rare occurrence. In 2015, the competition authority uncovered cartels in the chicken and dairy sectors.