Bundeskartellamt imposes first multi-million fine in mills case

In cartel proceedings against companies in the milling industry the Bundeskartellamt has today imposed a fine of € 23.8 million on VK Mühlen AG, Hamburg on account of its involvement in illegal agreements in the sale of flour. VK Mühlen AG is one of the leading suppliers of flour to the German market.
In February 2008 the Bundeskartellamt searched several milling companies in Germany after receiving information from the market about agreements on prices and quantities.

The President of the Bundeskartellamt, Andreas Mundt, stated: "With the proceedings initiated in 2008 the Bundeskartellamt was able to uncover a system of price, customer allocation and market sharing agreements for different sorts of flour which had been practised over a number of years. With today's decision against VK Mühlen a first fine is being imposed on a member of the cartel in the mills case. Investigations at around 40 more milling companies are still ongoing."

The companies sell their flour to industrial producers and bakers (such as e.g. bakery product manufacturers and bakery chains) and to artisan bakers. Some milling companies with small packaging units sell flour in small packets (usually 1 kg packets) directly to food retailers.

Since 2000 some senior members of staff of the milling companies involved had agreed on prices, customer allocation and supply volumes in numerous regular rounds of talks. The agreements applied to all forms of distribution.

In addition, the companies coordinated capacity planning by shutting down mills or preventing mills which had already been shut down from being returned to operation.

VK Mühlen AG was granted a reduction in fine for its extensive cooperation in clarifying the accusations. Fines are generally calculated according to the seriousness and duration of the cartel law violation. In setting its fines, the Bundeskartellamt also always takes account of the economic viability of the individual company and, with regard to the financial obligation imposed on the cartel members, can make use of measures such as deferment of payment and payment in instalments.

The order imposing the fine is not yet final and can be appealed at the Düsseldorf Higher Regional Court. However, an agreement was reached with the company to end the proceedings by settlement, which was also considered in calculating the fine.