On 27 September 2019, the European Commission ("Commission") fined Coroos and Groupe CECAB €31.65 million for participating in a canned vegetables cartel for over 13 years, with a third participant, Bonduelle, receiving full immunity for blowing the whistle.
| what you need to know - key takeaways |
- The Commission will grant full immunity to a member of a cartel where it is the first to come forward with information, which in the Commission's view will enable it either to carry out a "targeted inspection" (i.e. a "dawn raid"), where this has not already taken place, or to find an infringement of Article 101 TFEU (where there has previously been insufficient evidence).
- Where full immunity is no longer available, businesses may still be able to qualify for a leniency reduction in exchange for volunteering evidence about the infringement which provides "significant added value" to the Commission's investigation.
- Parties which are prepared to admit liability and waive their full rights of defence can also enter into a "settlement" agreement with the Commission. If agreed, the investigation will be streamlined, and the party concerned will be rewarded by a 10% reduction in its fine (separate and additional to any reduction for leniency).
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On 27 September 2019, the Commission fined Coroos and Groupe CECAB €13.65 million and €18 million respectively for breaching the Article 101 TFEU prohibition on cartels. A third participant in the cartel, Bonduelle, received full immunity for revealing the existence of the cartel to the Commission, avoiding a fine in the region of €250 million. All three companies admitted their involvement and settled the case.
The cartel
The cartel involved a single infringement comprising three separate agreements relating to:
- private label sales of canned vegetables such as green beans, peas, peas-and-carrots mix to retailers in the EEA;
- private label sales of canned sweetcorn to retailers in the EEA; and
- both own-brand and private label sales (sold under retailer's brands) of canned vegetables to retailers and food service industry specifically in France.
Coroos participated in only the first agreement, while Bonduelle and Group CECAB participated in all three.
The cartel lasted over 13 years, from 2000 to 2013, and covered the entire EEA. As part of this cartel, the companies engaged in conduct such as setting prices, agreeing market shares and volume quotas, allocating customers and markets, coordinating replies to tenders and exchanging commercially sensitive information.
The Commission had also opened proceedings against a fourth company, Conserve Italia in relation to this investigation. Conserve Italia is not covered by the settlement decision and the investigation against it will continue under the standard (non-settlement) cartel procedure.
The fines
Applying its 2006 Leniency Notice, the Commission granted Bondeulle full immunity for revealing the existence of the cartel, allowing it to avoid fine of approximately €250 million. Coroos and Group CECAB received a 15% and 30% discount respectively. In addition, both Coroos and Group CECAB received a further 10% discount each for settlement, under the Commission's 2008 Settlement Notice, resulting in a €13,647,000 and €18,000,000 fine for Coroos and Groupe CECAB respectively.
The Commission's press release states that one of the companies also received a further discount after invoking its inability to pay the fine under point 35 of the 2006 Guidelines on fines. In deciding to grant this discount, the Commission thoroughly assessed the company's financial statements for recent years, projections for the current and coming years, ratios measuring the financial strength, profitability, solvency, liquidity, and relations with outside financial partners and with shareholders.
This is the Commission's second cartel case relating to canned foodstuffs in recent years. In June 2014, the Commssion fined Bonduelle, Lutèce and Prochamp a total of around €32 million, in a settlement decision relating to a canned mushrooms cartel. In April 2016, it fined Riberebro (which did not settle) €5.2 million in relation to the same cartel.
With thanks to Natasha Gromof of Ashurst for her contribution.
