The German cartel office Bundeskartellamt imposed the fine against Nestlé Deutschland for its part in a network of illegal information exchange over a number of years. The office said the discussions had influenced market conduct and limited competition considerably.
However, Nestlé Deutschland has dismissed the allegations stating that they are “not justified”.
“We fundamentally disagree with the way in which the authority has applied the competition act in this case. We will, therefore, file an appeal with the Higher Regional Court of Düsseldorf and seek an annulment of the decision,” public affairs spokesperson for Nestlé Deutschland Achim Drewes told FoodNavigator.
Drewes said that given the ongoing nature of the case, Nestlé would not provide any further details.
Business influence and restricted competition
The German cartel office found that high-ranking sales executives from four food majors – Nestlé, Kraft Foods, Unilever and Dr Oetker – met regularly in a discussion group to exchange information on product pricing and retailer negotiations.
“The exchange of information was likely to have a decisive influence on the companies' market conduct,” Bundeskartellamt said, across various sectors including confectionery, hot beverages and frozen pizzas.
“In one case, Nestlé and Kraft explicitly agreed on a price increase for so-called ‘Family-Cappuccino’, an instant cappuccino product line,” it added.
President of the German cartel office Andreas Mundt said: “Such business details are normally treated as highly confidential. Although such forms of information exchange do not constitute typical cartel agreements, this type of conduct restricts competition considerable.”
“Certain types of information exchange between competitors are illegal under competition law. Competition is impaired by such practices, even if they are not classical hardcore agreements about prices, supply areas, customers or quotas.”
Kraft, Unilever, Dr Oetker
The other three food majors involved received, and have since paid, fines totalling €38m in March 2011.
The German unit of Mars was also involved but did not pay fines as it was the firm that triggered investigations after it submitted a ‘leniency application’.
A leniency application gives companies involved in cartels either total immunity to fines or a reduced figure if they self-report and hand over evidence.