Although it was already known for a while that ZON was the whistle-blower in the Dutch pepper cartel investigation, the reactions on Dutch industry news website AGF.nl, as well as others about the imposed fines, are not just plucked from the air. "I can predict what the consequences will be for ZON. We made our own decision and were of the opinion that the risk was too great not to bring the matter to the attention of the powers that be," Ton Reijnders Chairman of ZON said. Reijnders is of the opinion, that the fine of 14 million Euro imposed on the two FresQ-subsidiaries, is "steep". According to the chairman of ZON the facts of the matter of the whistle-blowing in 2007, when in cooperation with DPA (Dutch Producer Association) a presentation was given by a lawyer about increase of the fines as laid down in the laws of competition. "We were then told that the maximum fine for companies could possibly be as high as 10% of the annual turnover worldwide or a fine per person up to maximum 450,000 Euro. Within DPA context it was decided that each association had to decide for itself how to handle this. As directors and board of supervisory directors of ZON we issued the instruction to an external lawyer to research the matter. From that it became clear that the pepper cartel was very risky and that the financial risks were so big, that we decided to report the matter to the NMa (Dutch Competition authority)."
According to Reijnders there was no consultation with other DPA-members. "When asking for clemency secrecy is required and one should not discuss these things with other parties." ZON-growers, however, have been kept informed, according to the chairman. "Reactions showed mixed feelings." Also with frustrated reactions of colleague traders Reijnders can 'think of something'. It is striking that ZON this year discussed with FresQ subsidiary PaprikaXL the possibility of combining the pepper supply. ZON, because of competition reasons, did not press the matter.
Reactie Leo Welschen (Frugi Venta)
Leo Welschen of trading establishment Frugi Venta says that the representative of trading interests was never directly involved in this case. "The level of the fines I find terrifying and in no relationship to the profit, which was realised. Our impression is therefore that the consumer paid too much. The point is that every trader phones a few parties to enquire what the prices are and on that basis makes his choice. Of course he has certain price information available, but this has been going on for ever. On the other side we plead that if Frugi Venta is in favour of an as transparent as possible price structure, then we are against the forming of a cartel."
Leo Welschen of trading establishment Frugi Venta says that the representative of trading interests was never directly involved in this case. "The level of the fines I find terrifying and in no relationship to the profit, which was realised. Our impression is therefore that the consumer paid too much. The point is that every trader phones a few parties to enquire what the prices are and on that basis makes his choice. Of course he has certain price information available, but this has been going on for ever. On the other side we plead that if Frugi Venta is in favour of an as transparent as possible price structure, then we are against the forming of a cartel."Reaction Nico van Ruiten (LTO Glaskracht):
The conviction of two corporations of pepper growers and five growers and processors of silver onions by the Dutch Competition authority (NMa) has not as yet made the rules applying to 'cartels' clear to growers. From Europe they are allowed to bundle sales of fruit and vegetables and to cooperate, the NMa interpret this differently," Nico van Ruiten, chairmen of union branch LTO Glaskracht Nederland says. "Consumers have not been disadvantaged."
The returns of the growers have been below cost for years. "We try to bundle and to enter into chain cooperation in order to strengthen the income position of our growers. But the obscure wording in the competition data make growers shy. The are reserved. With the present decision there is no improvement. We require a quicker settlement of investigations by NMa and more attention to the interests of the producers, so that growers receive an honest return. "Fair Pricing" van Ruiten says.
There are around 300 pepper growers in the Netherlands and ten associations and corporations sell their peppers. "It is not plausible that two or three parties influence the price. In addition there is an international market in which the Dutch pepper holds a share of 2.6%. In any case there was no influence on the sales and consumer prices," as per van Ruiten
During the last five years growers on average received 20 cents for each pepper, which is far below the recovery of cost. The NMa did not establish what the effect on the consumer price would be in this case, but in a different investigation a few years ago came to the conclusion that the grower's price of fruit and vegetables only in a very limited way has influence on the price paid by the consumer.
Reaction Jan Zegwaard (STAP)
“This is not good for the sector" STAP chairman Jan Zegwaard reacts. "It is now still not sufficiently clear what can and what cannot be done. Also it takes far too long before the NMa issue their verdict. This causes problems for the parties involved which want to cooperate. In this way there is no road forward for the sector. The government must offer more clarity and decide much quicker. In addition the government looses interest in the importance for the growers. And that is certainly not in the interest of the consumers." According to the management of STAP parties will have less to fear from the cartel watchdog when they merge.
“This is not good for the sector" STAP chairman Jan Zegwaard reacts. "It is now still not sufficiently clear what can and what cannot be done. Also it takes far too long before the NMa issue their verdict. This causes problems for the parties involved which want to cooperate. In this way there is no road forward for the sector. The government must offer more clarity and decide much quicker. In addition the government looses interest in the importance for the growers. And that is certainly not in the interest of the consumers." According to the management of STAP parties will have less to fear from the cartel watchdog when they merge.Reaction Florpartners
The directors of Florpartners - being Thijs Jasperse, Ronald Grootscholten and Arjan van der Voort - have reacted with disbelief to the NMa decision. Also Florpartners received a fine of 5,000 Euro from the NMa in this affair. In this case the blame is about its involvement with a P8 project, which ran from the middle of 2006 to the first few months in 2007, therefore for the better part outside of the Dutch production season. Florpartners is of the opinion that the decision is incorrect and consider appeal.
The directors of Florpartners maintain that the rules in Europe and in the Netherlands put entrepreneurs in a difficult or even impossible position. "On the one side cooperation between growers and horticulturists is stimulated. Both Brussels and the previous ministry of agriculture want growers to strengthen their position in the market by cooperation and grant subsidies. On the other side other government agencies are in a position to impose fines."