The Netherlands Authority for Consumers and Markets (ACM) has imposed fines, totaling almost EUR 12.5 million, in three cases on four companies in the cold storage industry (freezing and refrigerated storage). Five executives each received personal fines, the highest of which was EUR 144,000. Between 2006 and 2009, the companies involved were holding merger talks, but, in those talks, they made arrangements about prices, exchanged competition-sensitive information, and shared customers among each other. As a result thereof, competition in the cold-storage market has been seriously impeded.
Chris Fonteijn, Chairman of the Board of ACM, adds: “These companies made illegal agreements, and thus distorted competition. Competition is necessary for producing competitive prices, better quality, and innovation in markets. Cartels are simply not allowed. One company fully cooperated with the investigation, and will therefore see its fine reduced. During the investigations into the cold-storage market, two other companies also made promises to improve their behavior. With the fines and these promises, we wish to promote competition in this particular market.”
Fine reduction in exchange for cooperation with investigation
The companies involved, Eimskip, Kloosbeheer, Samskip and Van Bon (now H&S Coldstores) have each been imposed fines between EUR 450,000 euro and EUR 9.6 million. These four companies are a vital link in our economy in the port and transportation sector.
Kloosbeheer has admitted to its mistakes, and has cooperated with ACM’s investigation since the dawn raid. Because of this increased level of cooperation, its fine has been reduced by 10 percent. In the period under investigation, Kloosbeheer was holding merger talks. Kloosbeheer has admitted that it had been ‘too open too soon,’ and that competition rules can also be violated when exchanging information during merger talks. ACM has observed that Kloosbeheer has implemented structural changes to its corporate culture and structure in order to prevent violations in the future.
Frequent contact between competitors
Between 2006 and 2009, the companies that have been fined distorted competition in various ways. Anticompetitive arrangements have been discovered in various emails. Competition-sensitive information was frequently exchanged. For example, the managers informed each other about the price for food storage. They also told each other the current utilization rates of their storage facilities, and thus whether or not they were looking for jobs. Sometimes they made arrangements about who would get which customer or about what price increase would be passed on. Also, arrangements were made about bids to potential clients, which meant that it was clear in advance who would get the job.
Businesses in the port and transport industry work closely together
Companies in the cold-storage market are a key link in the food transport chain. Many different products are stored, ranging from fruit juices and vegetables to fish and meat. Cold-storage facilities can primarily be found in logistical hubs such as ports.
In and around the ports, many businesses work closely together in order to be able to work fast and efficiently. However, this may also lead to a situation where it becomes easy to make anticompetitive arrangements. Even to this very day, ACM still receives indications that some businesses do not compete fairly in other segments of the port and transport industry.
The port and transport industry is on ACM’s radar
The Dutch ports, together with the companies that are active in the port-related transport market, are a key driver of the Dutch economy. This industry alone represents almost 6 percent of Dutch GDP, and provides over 170,000 jobs. For 2016 and 2017, ACM has this industry on its radar, among other industries. ACM will not just be keeping a close watch on businesses that violate the rules, but will also inform businesses of risky business practices.