French Toss Salad Price-Fixing Conspirators With Fines
Autorite de la Concurrence, the French competition authority, has fined French endive growers and trade organizations nearly 4 million euro ($5.2 million) for engaging in a 14-year price-fixing conspiracy that began in 1998.
Endive (which is also known as chicory) is a bitter leaf vegetable that can be cooked or eaten raw. While endive is not very common in the United States, it is the fourth most consumed vegetable in France. France is the largest exporter of endive, producing nearly half of the world’s 450,000 tons.
The conspiracy was carried out through regular minimum price instructions, management of sales and special offers, and mandated destruction of produce. Growers also exchanged current prices through a computer system, which enabled the conspiracy to identify and punish rogues.
The Autorite notes that growers knew their conduct was illegal. In particular, the Autorite points to an email from a farmers’ union representative advising his colleagues that the government’s “instructions” were “clear” that they could have no written communication about prices. However, the rep advised that to get around that problem, “[v]erbal communication between producers and shippers must therefore be organized.”
The cartel apparently inflated wholesale endive prices, which rose 32% from 2000 to 2010, compared to 21.8% for vegetables overall. However, its impact on consumer prices was limited, thanks largely to the retail grocers. With 75% of France’s endive sales, retailers’ bargaining power was too strong for the conspiracy, and consumer prices remained relatively low.
The conspiracy’s limited ability to affect prices was a major factor in the Autorite’s imposition of a moderate fine on the growers and their trade organizations.
Tagged in: International Competition Issues, Price Fixing,