Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Competition lawSomething to move up the Boardroomagenda? Kate Newman, Principal Associate 4 October 2012
Outline• a reflection on recent policy and case law trends  in the sector• what is the ECN and how is the work of its  mem...
Recent policy initiatives (1)• European Commission antitrust “task force” for  food sector  – two year “mission” from Janu...
Recent policy initiatives (2) • food and retail sector as a specific focus for the   ECN    – ECN stands for European Comp...
Report of the ECN food sub-group (1)• published May 2012 in response to:  – European Parliament calls for explanations of ...
Report of the ECN food sub-group (2)• statistics from 2004 to 2011:   – 180 antitrust investigations; 1300 mergers;     10...
National food-retail – a matter ofperennial interest? (1)• power struggle between large retail and food  suppliers a recur...
National food-retail – a matter ofperennial interest? (2)•   recent (2010/2011) national investigations in:     –   German...
Cartel investigations 2012 (1)•   fruit and vegetables (Hungary)•   bread (Spain)•   cotton (Spain)•   beer (Austria) €1.1...
Cartel investigations 2012 (2)• beer (Spain)• CO2 for soft drinks (Spain)• purchase of raw milk (Spain)• confectionery (di...
Resale price maintenance 2012•   meat processors (Poland)•   food retail (Austria)•   beer (Germany)•   pet food* (France)...
Market investigations/sector inquiries 2012•   food retail (Paris)•   milk (Germany)•   food retail (Germany)•   primary f...
Abuse of dominance investigations 2012• Tasty Foods (Pepsico)  (Greek salted snacks market)• Coca-Cola Hellenic Bottling (...
Implications (1)• the more competition authorities look, the more  they find …• … so they will keep on looking• communicat...
Implications (2)• companies could be sitting on time bombs …• … which could explode in the event of  investigation• how co...
Implications (3)• consolidation opportunities continue to arise in  the current economic climate• in an M&A context need t...
UK competition law developments in train (1)• new OFT Guidance on penalties   – maximum starting point for fines increased...
UK competition law developments in train (2)• Enterprise and Regulatory Reform Bill highlights:   – formation of the Compe...
Conclusions• the food sector has been a fertile source of  competition law infringements• there are pressure points up and...
Any Questions?
Upcoming SlideShare
Loading in …5
×

Competition Law

451 views

Published on

  • Be the first to comment

Competition Law

  1. 1. Competition lawSomething to move up the Boardroomagenda? Kate Newman, Principal Associate 4 October 2012
  2. 2. Outline• a reflection on recent policy and case law trends in the sector• what is the ECN and how is the work of its members relevant?• what are the implications for food and drink companies?• UK competition law developments in train
  3. 3. Recent policy initiatives (1)• European Commission antitrust “task force” for food sector – two year “mission” from January 2012 – established as a result of continued calls for scrutiny of retail markets – complements rather than replaces national competition authority investigations
  4. 4. Recent policy initiatives (2) • food and retail sector as a specific focus for the ECN – ECN stands for European Competition Network – nature of food markets tends to be local/national rather than Europe wide – so enforcement activity predominantly national rather than at pan European level – special food sub-group
  5. 5. Report of the ECN food sub-group (1)• published May 2012 in response to: – European Parliament calls for explanations of action taken to address volatility of commodity markets – concerns about rising food prices – perceptions of a malfunctioning food supply chain
  6. 6. Report of the ECN food sub-group (2)• statistics from 2004 to 2011: – 180 antitrust investigations; 1300 mergers; 100 sector enquiries (“robust” enforcement)• anti competitive activity across the supply chain: – price fixing; market sharing; unlawful information exchange; resale price maintenance; exclusionary conduct
  7. 7. National food-retail – a matter ofperennial interest? (1)• power struggle between large retail and food suppliers a recurring political issue• repeated calls from European Parliament for inquiry into the retail sector• 2008 resolution requiring DG Comp to investigate the impact of the supermarkets• 2010 saw establishment of the High Level Forum for a Better Functioning Food Supply Chain
  8. 8. National food-retail – a matter ofperennial interest? (2)• recent (2010/2011) national investigations in: – Germany – Finland – Spain – Hungary – Belgium – Italy – Bulgaria – Latvia – Czech Republic – Portugal – Denmark – Iceland – Croatia• exercise of market power -v- “unfair trading practices” stemming from unequal bargaining power
  9. 9. Cartel investigations 2012 (1)• fruit and vegetables (Hungary)• bread (Spain)• cotton (Spain)• beer (Austria) €1.1 million• flour (France) €242.4 million• milk (Cyprus)• bell peppers/shallots (Netherlands) €23 million
  10. 10. Cartel investigations 2012 (2)• beer (Spain)• CO2 for soft drinks (Spain)• purchase of raw milk (Spain)• confectionery (discounts/rebates to retailers) (Germany) €2.4 million• poultry (Greece)• watermelon* (Hungary)* also involves investigation of territorial sales restrictions
  11. 11. Resale price maintenance 2012• meat processors (Poland)• food retail (Austria)• beer (Germany)• pet food* (France) €35.3 million• vegetable oil (Bulgaria)• dairy products (Portugal) €341,100• bakery/pastry products (Romania)* also involved territorial sales restrictions
  12. 12. Market investigations/sector inquiries 2012• food retail (Paris)• milk (Germany)• food retail (Germany)• primary food production (Finland)
  13. 13. Abuse of dominance investigations 2012• Tasty Foods (Pepsico) (Greek salted snacks market)• Coca-Cola Hellenic Bottling (Greece)
  14. 14. Implications (1)• the more competition authorities look, the more they find …• … so they will keep on looking• communication across the ECN has the potential to trigger a domino effect across Europe
  15. 15. Implications (2)• companies could be sitting on time bombs …• … which could explode in the event of investigation• how confident are companies that their own businesses are competition law compliant?• how confident are directors that they don’t face the risk of disqualification?• new OFT guidance on penalties – a timely reminder of the OFT’s deterrence objective
  16. 16. Implications (3)• consolidation opportunities continue to arise in the current economic climate• in an M&A context need to be alive to successor liability principle – buy the shares – buy the liability• extra care needed in terms of due diligence and contractual protection• immediate compliance review required post completion
  17. 17. UK competition law developments in train (1)• new OFT Guidance on penalties – maximum starting point for fines increased to 30% of relevant turnover – up to 100% uplift for each bout of recidivism – inclusion of a specific proportionality check – relevant for cases where SO still to be issued• OFT investigation procedures in competition cases – move to collective decision making – ability to make representations on key elements of draft penalty calculations
  18. 18. UK competition law developments in train (2)• Enterprise and Regulatory Reform Bill highlights: – formation of the Competition and Markets Authority (a merged OFT and Competition Commission) – CMA to have enhanced powers to require individuals to answer questions as part of an antitrust investigation – dishonesty requirement under criminal cartel offence to be removed
  19. 19. Conclusions• the food sector has been a fertile source of competition law infringements• there are pressure points up and down the supply chain which may tempt companies to collude• the authorities show no signs of turning out the spotlight• competition law still seen as a priority for ensuring better functioning of the economy and driving performance• a good time for companies to take stock, re-assess their risks and ensure their compliance measures are robust
  20. 20. Any Questions?

×