Bundeskartellamt imposes fines of more than € 60 million on confectionery manufacturers

The Bundeskartellamt has concluded its fine proceedings against several manufacturers of branded confectionery. On account of several cartel infringements, fines of approx. € 60 million have been imposed on 11 companies and some of their sales representatives. The proceedings were initiated after a leniency application filed by Mars GmbH, against which no fine was imposed in accordance with the Bundeskartellamt's Leniency Programme. In February 2008, the Bundeskartellamt conducted sector-wide searches which triggered several more leniency applications.

Andreas Mundt, President of the Bundeskartellamt: "In 2007, prices for important raw materials for the production of chocolate, such as milk and cocoa, increased significantly. Obviously, some of the companies wanted to make sure that they could directly pass on their increased costs to the consumers. Instead of finding an entrepreneurial solution, the companies opted for illegal measures. Competition with rivals was simply eliminated and customers burdened with coordinated price rises."

Price agreements for chocolate bars (fines totalling around 21.7 million euros)
Between March and September 2007 one representative each from Kraft Foods Deutschland GmbH and Alfred Ritter GmbH & Co. KG informed each other in a series of telephone calls on their envisaged price increases for chocolate bars. In early 2008 the manufacturer's selling prices for the 100g bars were raised by 15 to 25 %, the manufacturers' recommended retail prices were raised by 10 to 15 Cents. This could only be verified with the help of a leniency application filed by Ritter, which was granted exemption from the fine in this respect, in accordance with the Bundeskartellamt's Leniency Programme.

"Four party" discussion group, price agreements and exchange of information (fine of approx. 19.5 million euros)
In 2007, at regular meetings of a discussion group, senior members of the companies Alfred Ritter GmbH & Co. KG, Mars GmbH and Nestlé Kaffee und Schokoladen GmbH agreed on price increases for chocolate products. Mars and Nestlé are two of the leading suppliers of chocolate bars and chocolate bites. At the beginning of 2008 the price increases for these products averaged approx. 10% and were to some extent implemented by downsizing the packet contents.

Moreover, at the meetings between spring 2006 and the Bundeskartellamt's dawn raids in February 2008, information was exchanged about the state and progress of negotiations between the companies and various major retailers. A sales representative of Haribo GmbH & Co. KG was also involved in this exchange of information. Haribo was already fined for this infringement in summer 2012 (cf. Bundeskartellamt press release of 1 August 2012). The companies informed each other about demands from the retail trade for rebates from the other confectionery manufacturers and about how the manufacturers had reacted to these demands. This information enabled the companies to adjust their own strategies in the negotiations.

Exchange of information in working group of confectionery industry association (fines of approx. 19.6 million euros)
At least between 2004 and the beginning of 2008 information about the state of negotiations with food retailers and in some cases about planned increases in list prices was exchanged at meetings of a working group of an association of the German confectionery industry. The companies involved in this case were, in addition to Mars and Ritter, the small and medium-sized confectionery manufacturers Bahlsen GmbH & Co. KG, Griesson de Beukelaer GmbH & Co. KG, Storck GmbH & Co. KG, Katjes Fassin GmbH + Co. KG, CFP Brands Süßwarenhandels GmbH & Co. KG, Feodora Chocolade GmbH & Co. KG, Piasten GmbH & Co. KG and Zentis GmbH & CO.

In calculating the fines it was taken into account that the companies Ritter, Nestlé, Kraft and Katjes had cooperated with the Bundeskartellamt in clarifying the facts of the case. Most of the proceedings could be concluded by way of settlement. The orders imposing the fines on the companies Haribo, Katjes, Kraft, Piasten, Storck and Zentis are final. The other orders can be appealed to the Düsseldorf Higher Regional Court.