NMa Draws up a Report on Veterinary Medicine Wholesalers
After carrying out an investigation, the Dutch Competition Authority (NMa) has reason to believe that Coöperatieve Nederlandse Veterinair-Farmaceutische Groothandel U.A. (in short, AUV) has contravened the Competition Act. Until the end of 1998 AUV excluded veterinarians from receiving supplies if they undermined the market position of veterinary practices located in the vicinity and has maintained these exclusions up until the present. In addition, AUV and Aesculaap, another wholesaler of veterinary medicines, have entered into an agreement whereby Aesculaap also adheres to AUV's exclusions from supply. Consequently, veterinarians are no longer supplied by either wholesaler if they provide competitive services and veterinary medicines to livestock farmers (mainly cattle farmers) who are customers of another veterinarian.
AUV is a cooperative association to which 90% of veterinarians in the Netherlands with a private practice are affiliated for the procurement of veterinary medicines. The activities of AUV include the production of, wholesale trading in, sole distributorship of and export of veterinary medicines and veterinary instruments. AUV's product range includes 90% of all veterinary pharmaceutical products marketed in the Netherlands. Only one other wholesaler in the Netherlands, namely Aesculaap, offers a full range of veterinary medical products. This is also the only wholesaler that sells AUV's products. AUV has owned Aesculaap Groep B.V. since 1996, with the exception of its wholesale activities. When the company was taken over it was agreed that Aesculaap could offer AUV's product range on condition that Aesculaap adhered to AUV's supply exclusion list.
Veterinarians with a private practice in the Netherlands (of which there were at least 1800 in 1999) are the end users of goods used in their practices and retailers of veterinarian medicines. The large majority of these medicines may only be administered or supplied by a veterinarian.
The investigation carried out by NMa has given rise to suspicions that the refusal to supply medicines is applied systematically to enforce agreements that limit competition. By following a policy of refusing to supply medicines, sales prices are determined and customers and markets are allocated. The veterinarians and livestock farmers are limited in their freedom of choice. There appears to be a collective boycott by AUV and Aesculaap with the aim of combating undesired competitive behaviour by a number of veterinarians.
The provisional findings of the investigation have been set out in a report. The parties involved have now been given the opportunity to respond to this. Ultimately a decision will be taken as to whether the Competition Act has been contravened and whether a fine or measure must be imposed.