The Netherlands Authority for Consumers & Markets (ACM) has fined four companies a total of €2.5 million. They divided the cultivation, processing, and sale of different types of carrots among themselves. The deals between Laarakker, VanRijsingen, Veco, and Verduyn spanned ten years.
That limited competition to the benefit of these companies. Laarakker and Verduyn reported their dishonest behavior to the ACM and thus had their fines reduced. All four companies admitted to the offense and cooperated with the procedure following visits from the ACM. It had received various reports of fraudulent activity.
Martijn Snoep, ACM Board Chairman, says, “Companies that divide the market deprive their customers of the benefits of competition. It's good that this arrangement has come to an end and that the companies wanted to clean up their act. They have acknowledged the violations and want to actively cooperate with the investigation.”
What does it involve?
The four companies market regular and Parisian carrots to canning and freezing factories in the Netherlands, Belgium, and Germany. In the canning industry, carrots are mainly used in pea mixes. Unlike regular carrots, Parisian carrots are round and preferred in the German market.
Laarakker, VanRijsingen, Veco, and Verduyn signed a written agreement in 2008. For ten years, Veco would not be involved in the cultivation, processing, and sale of carrots. And Laarakker, VanRijsingen, and Verduyn would not grow, process, or market Parisian carrots.
They also decided that Veco would be financially compensated. These payments indeed took place. Laarakker and Veco made further deals about the delivery of Parisian carrots to German clients. That arrangement excluded VanRijsingen and Verduyn.
ACM and supervising competition
The ACM ensures markets work well for people and businesses. It supervises fair competition. It can punish companies that make secret price and market distribution deals or exchange other competition-sensitive information. These agreements lead to higher prices, lower quality, and less innovation. The ACM uses tips and reports of possible violations to perform its task, which is how the ACM learned about this case.
Source: ACM