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France: Endive cartel fined by anti-trust authority

Earlier this week the French antitrust authority fined endive growers for the running of a cartel it said had been in operation since 1998.

The cartel has kept the value of the vegetable for falling all this time, but now they have been fined, collectively, almost 4 million Euro.

The fines are shared between 11 farmers, 7 producer unions and associations for colluding to set prices to both wholesalers and retailers.

"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," the French Competition Authority said. Virtually all endive producers in France participated in the cartel, the regulator said.

Members of the cartel are even said to have destroyed stocks to prevent price falls. The authority quoted an email from a union member as a demonstration that those involved knew that their actions were illegal. "The order is clear, no written track from anybody, we must then organize an oral communication system," the email said.

"The view of the antitrust authority is simplistic," said Frederic Guegain, the director of endive company Fraileg, who was fined 83,000 Euro, an amount he finds surprisingly high. "The antitrust rules are in contradiction with rural rules and the endive industry is the victim." He is still not decided on whether or not he will appeal the ruling.

The regulation authority said that large retailers had had the strength to limit the efficiency of the cartel, using their negotiating power to prevent farmers demanding excessive prices.

Still, according to the Agriculture Ministry's agency France AgriMer, wholesale endive prices gained 32% between 2000 and 2010, while overall vegetable prices only rose 21.8% over the same period.

Considering the limited impact of the cartel on the French food market and the fragile financial situation of some of the wholesalers and producers, the antitrust authority decided to impose rather small fines. According to Agrimer, French endive production in 2010 reached 208,000 tons, compared with overall vegetable production of 5.2 million tons.

Source: www.marketwatch.com

Publication date: 3/7/2012


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