Sugar

On 18 February 2014, the German Federal Cartel Office (FCO) imposed fines of approximately EUR 280 million on the sugar manufacturers Nordzucker AG, Pfeifer & Langen GmbH & Co. KG and Südzucker AG for their participation in anticompetitive agreements on sales areas, customers and prices on the German sugar market.

The cartel infringement concerned the sale of sugar for the processing industry (processing sugar) and sugar for the food retail trade (household sugar). It lasted from the mid-1990s until the FCO’s inspections in spring 2009 .

According to the FCO’s fining decision, the sugar manufacturers practised a permanent agreement on the sharing of markets and customers to respect their respective core sales territories. Their ‘customer and volume management’ provided for renouncing mutual competition and exporting surplus quantities of quota sugar instead of offering them to potential customers in Germany. Further, the cartel members coordinated their activities regarding the EU Sugar Market Regulation, the Eastern enlargement of the EU and changes in import-export flows. They were concerned with maintaining the ‘home market rule’ and achieving the highest possible prices for sugar. According to the FCO, this worked ‘well’.

The agreements, as the FCO further clarifies, were not dictated by the regulation of the European sugar markets. Despite the quota system and minimum price guarantees, competition for sales areas, customers and customer prices would have been possible. Instead, however, the cartel members took advantage of the European quota regime, the minimum price regulation and the resulting high market transparency for their coordination and also restricted residual competition. The case thus shows how comprehensive market regulation can contribute to restricting competition to the detriment of customers.

The sugar manufacturers have not appealed the decision of the FCO. Its findings are therefore binding for the civil courts in damage proceedings.