Bundeskartellamt imposes fine of approx. 1.4 million euros on asphalt producers and reviews association guidelines for setting up supplier consortia

Revised edition of 14 December 2018:

The Bundeskartellamt has imposed a fine amounting to 1.43 million euros on Gaul GmbH, a manufacturer of asphalt mixes, for participating in a cartel agreement. Gaul has been a subsidiary of the STRABAG group since 2011. The cartel agreement involved prices, sales areas, customers and quotas for the supply of construction companies in the Rhine-Main area between 2005 and 2013. It took the form of supplier consortia.

Another company involved in the cartel agreement was Südhessische Asphalt-Mischwerke GmbH & Co. KG (“SHM”), which is a company of the Werhahn group. In 2013 SHM disclosed the agreement in a leniency application and was not punished as a result. The proceeding was also conducted against Mitteldeutsche Hartstein-Industrie AG (“MHI”) and its former subsidiary Mitteldeutsche Hartstein-Industrie GmbH. The proceeding against the legal successor of this subsidiary was discontinued due to a legislative loophole which has become publicly known as the “sausage gap”, while the proceeding against MHI was discontinued for discretionary reasons. It will therefore not be clarified in the context of this proceeding whether the MHI group was involved in this cartel.

Andreas Mundt, President of the Bundeskartellamt: “For years the supplier consortia for larger orders of asphalt mixes have been formed, although in most cases one company could have met the demand alone. The supplier consortia thus mostly served to steady the market, i.e. to avoid competition for prices and bids among the participating undertakings. Arrangements were also made to eliminate competition by allocating sales areas and customers and agreeing on price lists for small orders. The arrangements were to the detriment of road construction companies buying the asphalt mixes, and ultimately the state which commissions road construction work.”

Asphalt mixes are produced from aggregates and binding agents like bitumen. The direct buyers of asphalt mixes are road construction companies. Gaul had its own asphalt mixing plants in Büttelborn, Ludwigshafen, Sprendlingen and Wiesbaden. Already since the late 1990s the asphalt producers involved agreed on orders and formed supplier consortia which, as far as capacities were concerned, were either not necessary or it was not proved that they were actually needed. In the period since 2005, which was under review, there were more than 100 bilateral and trilateral supplier consortia which were based on the agreements.

The proceedings against some smaller manufacturers of asphalt mixes were terminated as the initial suspicion that they had participated in the agreement could not be confirmed.

Gaul admitted to the accusations and agreed to a settlement. The fine imposed is not yet final. The decision can be appealed to the Düsseldorf Higher Regional Court.

The Bundeskartellamt has already dealt with the limits of admissible supplier consortia in its sector inquiries on rolled asphalt and cement and ready-mix concrete (both papers available in German only). While the fine proceeding, which has now been concluded, was ongoing, the Bundeskartellamt also assisted the German asphalt association (DAV e.V.) in setting up guidelines for checking whether supplier consortia are admissible under competition law. These guidelines are now available to the entire industry. Other associations in the construction material sector plan to publish similar guidelines.

Andreas Mundt, President of the Bundeskartellamt: “These guidelines help to assess such cooperations between bidders or suppliers under competition law. Manufacturers of asphalt mixes which follow these guidelines are on the safe side. Companies can of course always contact us if there is still doubt.”

The Bundeskartellamt will soon publish a case summary on the proceeding in accordance with Section 53(5) of the German Competition Act on its website. The case summary will also contain further information on the “Guidelines for examining the admissibility of supplier consortia under competition law” of the DAV e.V.