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The Competition Authority (AdC) accused the three food distribution groups Modelo Continente, Pingo Doce and Auchan and the supplier of cosmetic and personal hygiene products Beiersdorf, of practices equivalent to a cartel.
Following the investigation, the AdC concluded that there are indications that the three groups of large retailers used their business relationship with the supplier of cosmetics, personal hygiene products and beauty – among which are the brands Nivea, Harmony, Hansaplast and Labello- , align the retail prices (RRP) of the main products, to the detriment of consumers.
The accusation also points to a director of the supplier Beiersdorf, and the conduct investigated lasted for several years, having been practiced between 2008 and 2017.
The regulator also notes that the ‘Note of Illegality’ was adopted on December 2, 2020.
If confirmed, the conduct in question is very serious. It is a practice equivalent to a cartel, in which distributors, by not communicating directly with each other, as is often the case in a cartel, resort to bilateral contacts with the supplier to promote or guarantee, through this, that all practice the same RRP in the retail market.
This is a practice that hurts consumers and is called “hub-and-speak” in competition terminology.
On November 24, the AdC had already accused the same three large distribution groups of the same practice with alcohol supplier Active Brands.
The indictment now issued also adds to the six lawsuits for which Notes of Illegality were already approved in March 2019, June and July 2020.
The PCA is currently conducting more than ten investigations in the large food distribution sector, some of which are still secret.
The large sector of food distribution is among the priorities defined by the AdC, taking into account the importance it has for the majority of Portuguese consumers and for the daily supply of families.
The regulator also reports that the Note does not determine the final result of the investigation. At this stage of the process, the recipients have the opportunity to exercise their rights to a hearing and defense in relation to the crimes committed against them and the sanctions they may incur.
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