Bitter end for endive producers in France

The French Autorité de la Concurrence last week fined endive farmers for participating in a cartel since 1998.  The aim of the cartel was to keep prices from falling.

The Autorité imposed fines of almost €4 million on 11 farmers and seven producer unions and associations after they colluded to set prices charged to wholesalers and retailers, stating:

"Since at least 1998, agreements and actions were carried out by market players to collectively coordinate pricing policies and control sales prices to wholesalers and retailers"

Virtually all endive producers in France were found to have participated in the cartel.

Farmers and organizations followed prices in real time to monitor compliance by each member of the cartel with the unlawful agreements and they were found to have resorted to destruction of endive stocks to prevent prices from falling. The Autorité also found that the farmers were aware that their actions were illegal, quoting an email from a union member in its ruling:

"The order is clear, no written track from anybody, we must then organize an oral communication system"

According to the French Agriculture Ministry, wholesale endive prices gained 32% between 2000 and 2010, while overall vegetable prices only rose 21.8% over the same period.

As the cartel had a relatively limited impact on the French food market (the buying power of supermarkets limited the extent to which even cartelised prices could be raised) and because of the fragile financial situation of some of the wholesalers and producers, the Autorité decided to temper the magnitude of the fines.

The investigation is a reminder that competition rules apply to the agricultural and food sector.  In November 2011, the Office of Fair Trading updated its guidance on the application of competition law to the agricultural and farming sector.  In addition, DG Competition recently launched its task force to investigate competition problems in the food chain.

If you are interested in discussing any of the issues raised in this alert, please contact us.

John Cassels is a Partner in the Competition & EU Regulatory Group at Fieldfisher.