French, German millers hit with large fine

by Eric Schroeder
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PARIS — France’s antitrust watchdog, The French Autorité de la Concurrence, has fined French and German millers in the packaged flour sector a total of €242.4 million ($315.8 million) after the Autorité determined a cartel of German and French millers aimed to limit imports of flour between France and Germany, while two anticompetitive agreements by French millers were aimed at fixing prices, limiting output and sharing the customer base for packaged flour.

In its ruling, the Autorite said it found evidence that between 2002 and 2008 French and German millers agreed to a “non-compete agreement” aimed at limiting their respective access to each other’s markets and at maintaining French and German exports of packaged flour at a predetermined level (15,000 tonnes).

The millers met several times to work out the details of their agreement, the Autorite said, and allocated certain customers based in France to each other, and agreed on principles for smoothing the prices of packaged flour imported from Germany in order to meet the agreed quota.

The Autorite said the collaboration “led to a market fragmentation between two E.U. member states (France and Germany) of a significant dimension, thereby directly impeding the interpenetration of economies which the Treaty of the E.U. seeks to bring about,” and “it protected French millers from the competition of their German counterparts and prevented the latter from stimulating competition on the French market.”

The actions by the millers were brought to light in April 2008 after German miller Wilh. Werhahn GmbH & Co. KG and its subsidiaries filed an application for leniency.

As part of its investigation, the Autorite also found French flour producers participated in a production alliance that had fixed retail prices in the domestic market as far back as 1965. The French producers have been fined €146.9 million ($191.8 million) as part of that case.

The Autorite said there are other ongoing proceedings regarding the milling sector in Germany, The Netherlands and Belgium. Additionally, the Autorite is continuing its investigation into the larger commercial bakery market, which is supplied by many of the mills identified as part of the cartel.

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