Netherlands: Tobacco industry convicted of price fixing

In the Netherlands, the Dutch Competition Authority (ACM) fined the tobacco industry €82 million in May 2020 for attempting to distort market rules through an illegal price agreement. However, the decision was only announced on Tuesday, September 29, after three manufacturers tried to prevent its publication in court.

The facts alleged against the industry date back to the period between 2008 and 2011. According to the ACM, "manufacturers received information from wholesalers on the consumer prices of their competitors' cigarette packets before these tariffs came into force. They were therefore able to align their prices with those of their competitors". The Dutch authority points out that the cigarette manufacturers were aware that they were in direct breach of competition rules.

Four tobacco manufacturers are affected by the ACM's decision. British American Tobacco (BAT) must pay the largest fine (31 million euros). Philip Morris Netherlands is required to pay 27.5 million euros. Japan Tobacco International Company Netherlands and Van Nelle Tabak Nederland are paying a fine of more than 13 million euros and more than 10 million euros respectively. According to the competition authority, each of these companies sought to contest the legitimacy of this fine.

A classic oligopolistic operation on prices

These price agreements are a recurring practice in the tobacco industry, which operates like a real oligopoly. In France in particular, the Competition Authority had also carried out searches and seizures at cigarette manufacturers suspected of anti-competitive practices. Similarly, in May 2020, the Swiss Federal Administrative Court forced the customs department to provide the OxySuisse association with information on the sales prices of different cigarette brands for 2014 and 2015, following suspicion of price collusion between the major companies.

Keywords: Illicit agreement, price

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