Dutch authority cuts pepper cartel fine

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Mike Knowles

BY MIKE KNOWLES

@mikefruitnet

Dutch authority cuts pepper cartel fine

Rainbow and United West Growers have seen their individual €7m fines for price-fixing cut to a total of €1.63m

Dutch authority cuts pepper cartel fine

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The Dutch competition authority (NMa) has agreed to reduce the overall fine imposed on a cartel of fresh pepper companies in the Netherlands, from €14m to €1.63m.

The decision followed an appeal in response to NMa’s original 2012 ruling, in which it found Rainbow, United West Growers and Zon guilty of colluding to maintain high prices for what amounted to around 30-40 per cent of total Dutch pepper production, contributing to hundreds of millions of euros' worth in annual sales.

With penalties imposed for such illegal activity potentially as high as 10 per cent of global sales, the organisations involved will presumably be relieved at the authority’s latest ruling.

Zon, having blown the whistle on the cartel’s price-fixing back in 2009, was already expected to escape any fine, while UWG and Rainbow were had each been ordered to pay €7m.

The NMa first announced it was investigating reports of anti-competitive behaviour in the Dutch fresh pepper trade back in late 2010, following a number of raids on companies operating in the sector in July 2009.

According to its report at the time, which covered the period 2006-2009, the companies suspected of participating in the alleged cartel represented a “large share” of the Netherlands’ fresh pepper supply.

Since the time of the original allegations, there has been a whole raft of structural and organisational changes within the Dutch pepper business, including the withdrawal of European subsidy funding for vegetable growers;

the break-up of FresQ, one of the country’s largest vegetable producer organisations; and the creation of a new co-operative called Novitura, which brought together pepper suppliers Rainbow and PaprikaNL.

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