Wurst news: AU$488 million for sausage price fixing

Monday, 21 July, 2014

In Germany, the Bundeskartellamt has imposed fines totalling approx 338 million euros (AU$488 million) on 21 sausage manufacturers as well as 33 individuals for conducting illegal price-fixing agreements.

For decades the ‘Atlantic Group’ has been colluding on sausage prices. The group, which first started meeting at the Atlantic Hotel in Hamburg - hence its name - did not fix the prices for every type of sausage as there were way too many. Instead they agreed on price ranges by product group - raw, boiled and cooked sausages, and ham.

In addition to the Atlantic Group meetings there had been actual agreements between several sausage manufacturers, in particular since 2003, to jointly implement price increases for the sale of sausage products to the retail trade. Most of the agreements were made by telephone either by reciprocal calls or organised ring-around calls.

As a direct result of this cartel agreement, manufacturers have been pocketing higher prices for decades.

The Bundeskartellamt obtained first indications of the cartel from an anonymous tip-off. During the proceedings 11 companies cooperated with the authority and made confessions. The cooperation provided by the companies was taken into account as a mitigating factor in the calculation of the fines. The fining decisions are not yet final and can be appealed within two weeks to the Düsseldorf Higher Regional Court.

The Bundeskartellamt does not give any information about individual fines, which range from a few hundred thousand euros to high amounts in millions. The high fines reflect the seriousness and duration of the infringement and the cartel-related turnover (the turnover achieved by the company with the products that were the subject of the cartel agreement) and the overall turnover of the company.

Andreas Mundt, president of the Bundeskartellamt, said, “The price-fixing agreements were practised over many years. The overall amount of fines seems high at first glance but has to be seen in perspective in view of the large number of companies involved, the duration of the cartel and the billions in turnover achieved in this market.”

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