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Competition Commission fines sanitary products wholesalers for price fixing

29 October 2015

On March 7 2015 the Competition Commission announced that it had penalised a number of wholesalers in the sanitary industry (ie, bathroom fixtures and fittings) with fines totalling Sfr80 million. The commission found that since the 1990s these wholesalers (all industry leaders) had entered into various prohibited horizontal agreements on prices and quantities.

According to the commission's press release,(1) between 1997 and 2011 most of the wholesalers concerned had agreed on pricing elements or factors affecting price, including:

  • margins;
  • gross prices;
  • euro exchange rate;
  • transport costs;
  • discounts; and
  • rebate categories.

They had also agreed not to include in their catalogue products from manufacturers which did not distribute the products exclusively. These agreements prevented the manufacturers from entering the market. The commission found that this amounted to a prohibited agreement on prices and quantities.

Most of the wholesalers concerned were members of the Union of Wholesalers of the Sanitary Branch,(2) which served as a platform to conclude the illicit agreements. As the only non-member of the association, market leader Sanitas Troesch AG participated in some of the arrangements found to be illicit by the commission. The following entities were fined:

  • Union of Wholesalers of the Sanitary Branch;
  • Cement Roadstone Holdings plc;
  • BR Bauhandel AG (Richner);
  • Gétaz-Miauton SA;
  • Reco Regusci SA;
  • Sanitas Troesch AG;
  • SABAG Holding AG;
  • Bringhen AG;
  • SAB Sanitär Burgener AG;
  • Kappeler AG; and
  • Innosan SA.

The procedure was closed without further action concerning Später AG Chur and San Vam SA.

Some of the companies provided the authorities with a large set of data and benefited from substantial reductions in their fines as a result. As a mitigating circumstance, the commission took into account the fact that it had in the past launched preliminary investigations in the sanitary industry which had been closed without formal investigation. The duration of the cartel and the repeated violations of the Cartel Act contributed towards the penalties issued.

Horizontal agreements on prices and quantities are serious offences under Article 5(3) of the Cartel Act. The commission's investigation was initiated following information received from consumers. No self-denunciation was made.

The commission has yet to publish the basis of its findings, but is expected to do so. Following publication of the findings, the wholesalers can appeal to the Federal Administrative Tribunal.

For further information on this topic please contact Patrick Sommer at CMS von Erlach Poncet Ltd's Zurich office by telephone (+41 44 285 11 11) or email (patrick.sommer@cms-vep.com). Alternatively, contact Pascal G Favre at CMS von Erlach Poncet Ltd's Geneva office by telephone (+41 22 311 00 10) or email (pascal.favre@cms-vep.com). The CMS von Erlach Poncet Ltd website can be accessed at www.cms-vep.com.

(1) See www.news.admin.ch/message/index.html?lang=fr&msg-id=58001 (available in German and French).
(2) Union Suisse des Grossistes de la Branche sanitaire and Schweizerischer Grosshandelsverband der Sanitären Branche.

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Dr Patrick Sommer, H.E.E.