Pingo Doce will "challenge judicially" €91 million fine

By TPN/Lusa, in News · 21-12-2020 21:00:00 · 0 Comments

Jerónimo Martins, owner of the Pingo Doce supermarket chain, said today that it will "challenge the decision of the Competition Authority (AdC) to fine it €91 million for price fixing.

"Pingo Doce will challenge those decisions in court and use all means at its power to defend its reputation and repute the truth of the facts," read a statement from Jerónimo Martins sent today to the Securities and Exchange Commission (CMVM).

The AdC decided today to impose a fine of €304 million to six supermarket chains, two beverage suppliers and two individual officials, for indirectly fixing sales prices, a practice detrimental to consumers".

According to a statement from the entity chaired by Margarida Matos Rosa, the largest fine of €121.9 million (ME) was applied to Modelo Continente, followed by Pingo Doce (91 ME), by the supplier Sociedade Central de Cervejas (SCC, of 29.5 ME), Auchan (22.3 ME), Intermarché (19.4 ME), Lidl (10.6 ME), by the supplier Primedrinks (7 ME) and Cooplecnorte (E. Leclerc, 2 ME). In addition to the entities, a director of the Central de Cervejas was also fined €16,000 and a business unit director of Modelo Continente, €2,000.

The value of the fines is determined "by the sales volume of the companies targeted in the affected markets in the years of the practice", and may not "exceed 10% of the company's turnover in the year preceding the penalty decision". According to the AdC, the sanctioned practice "has, in the terminology of competition, the name hub-and-spoke", and consists of a practice in which "distributors use the contacts they have with the common supplier to ensure, through this, that everyone practices the same retail price (PVP), ensuring a general increase of PVP and avoiding direct contacts with each other, as is usually the case in a cartel".

In a first case, AdC condemned a price combination between Modelo Continente, Pingo Doce, Auchan and Intermarché and The Beer Centre, as well as the two administrators. In the first case, according to the AdC, the practices lasted "more than nine years – between 2008 and 2017", in relation to prices of products of the Beer Center, such as "Sagres and Heineken beers, but also Bandida of The Orchard and Water of Luso, including to make them rise gradually and progressively in the retail market". The market regulator "has imposed the immediate cessation of the practice, as it is not possible to exclude that the investigated behaviours are still ongoing," according to the statement.

According to the AdC, these are the "first convictions in Portugal for a concerted practice of indirect fixation between distribution companies through coordination by suppliers", and were carried out in the context of investigations that began in 2017.

The AdC says that in March 2019, unlawful notes were adopted, "and the victims were given the opportunity to exercise their right of hearing and defense, which was duly assessed and considered in the final decision". "The AdC also carried out, in the investigation phase, additional evidence steps required by the target companies, the results of which were also considered," the regulator said.


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