Proceedings against companies of ClemensTönnies group concluded – fines of 128 million euros cancelled due to restructuring measures

The Bundeskartellamt has closed its fine proceedings against two companies of the Zur Mühlen Group. The fines totalling 128 million euros which were imposed on Böklunder Plumrose GmbH & Co. KG, Böklund, and Könecke Fleischwarenfabrik GmbH & Co. KG, Bremen, have become invalid due to internal restructuring measures taken by the companies. The Zur Mühlen Group is a holding company of Mr Clemens Tönnies Senior.

On 15 July 2014 the Bundeskartellamt imposed fines totalling approx. 338 million euros on 21 sausage manufacturers and 33 individuals involved (see Bundeskartellamt press release of 15  July 2014). The proceedings against 11 companies and 15 individuals involved have meanwhile been concluded with final fines amounting to a total of 71 million euros. Appeals were filed against the other fines imposed.

After the companies in the present case had appealed against the fines, major assets of Böklunder Plumrose GmbH & Co KG and Könecke Fleischwarenfabrik GmbH & Co. KG were transferred to other companies of the Zur Mühlen Group. The two companies were subsequently dissolved.

Andreas Mundt, President of the Bundeskartellamt: "We would have liked to avoid this outcome. However, the restructuring within the Zur Mühlen Group has meant that claims for payment of the fines can no longer be asserted. The existing loophole in the law (so-called "sausage gap") has made this possible. We are currently examining further instances in which it could be possible that other large amounts of fines may no longer apply. As such cases endanger the effectiveness of cartel prosecution, we have insisted that the law be amended. I very much welcome that the Federal Cabinet has passed a bill for the planned amendment to the German competition law. This will introduce the element of corporate responsibility based on the European model. The effect of sanctions against large companies can only be ensured and ways of avoiding them prevented if controlling parent companies are also made responsible for paying fines."

On 28  September 2016 the Federal Cabinet passed a bill presented by the Federal Ministry for Economic Affairs and Energy to amend the German Competition Act (Gesetz gegen Wettbewerbsbeschränkungen,GWB). One of the purposes of the bill is to harmonize the national law with the rules on corporate fines which already exist in European law. Accordingly, the responsibility for competition law violations committed by companies extends to the legal and commercial successors of the company originally responsible and its controlling parent company.