EUR 35m Fines on 25 Companies in the Romanian Food Retail Sector

On 13 January 2015 the Romanian Competition Council (the “RCC”) announced significant fines on 25 Romanian companies active in the food retail sector (four major retailers - Metro, Real, Selgros and Mega Image, and 21 top suppliers, among which the leading dairy products suppliers Albalact, Covalact, Danone PDPA, Delaco Distribution and Napolact) for breaching competition rules.

1. Anti-Competitive Conduct and Sanctions

The fines imposed by the RCC amount to approx. EUR 35 million. They are the result of an investigation carried out by the competition authority between 2005 and 2009 which focused on price fixing and targeting major retailers and their suppliers in Romania. The RCC imposed the highest fine among the four retailers on Metro (EUR 11.3 million) and among the 21 suppliers on Transilvania General Import Export S.R.L. (EUR 1.1 million).

The alleged anti-competitive conduct which resulted in these fines was:

• Resale price maintenance – the supplier and retailer would set the shelf price for products sold in retail stores at a fixed or minimum price, which led to higher prices for end consumers;
• Companies’ conduct during marketing campaigns – several retailers and suppliers agreed on contractual clauses whereby suppliers were prohibited to carry out simultaneous marketing campaigns in competing retail chains. This deprived the end consumer of lower prices which would have resulted from concurrent campaigns.

The RCC has not yet published the non-confidential version of the decision. Nevertheless, according to public statements, appeals will be lodged by the sanctioned parties.

2. RCC’s Investigation of Other Retail Chains in Romania

The RCC is currently carrying out another investigation regarding other major retail chains in Romania including Auchan, Carrefour, Romania Hypermarche (Cora), Kaufland and their suppliers, for possible infringement of both national and European competition rules.

Following the same trend, at the end of 2014 the Romanian Government approved a Memorandum establishing a system for monitoring the consumer goods prices (i.e. an online platform displaying weekly prices of products bought on a daily basis, offering consumers a helpful database for comparing prices and selecting stores for food products at low prices). This project will be implemented by the Association for Consumers’ Protection in Romania with the support of the National Authority for Consumer Protection and the RCC.

Similar actions have been taken in other Member States (e.g. Austria, Germany) where investigations are conducted for the purpose of ensuring increased competition in food retail markets. This confirms the ongoing competitive concerns of national competition authorities in the EU. They continue to closely monitor these markets and the possibility of further investigations and fines in the retail food sector in Romania and other Member States.