August 3, 2020

Competition reopens the disciplinary proceedings against Danone, Nestlé, Puleva and Pascual | Companies



Competition does not give up in its process against various companies in the dairy sector. The inspection body has decided to reopen the file with which, in 2015, sanctioned 11 companies and industry associations with 88.6 million of euros, and that the National Court annulled last October due to defects of form. This extended to all those affected a decision that had already been anticipated by the Supreme Court in a judgment signed in July 2018, and that It gave the reason to Nestlé in its resource against the process, as it advanced CincoDías.

In its resolution, the National Court opened the door for the National Commission of Markets and Competition (CNMC) to reopen the process in the previous stage, which followed the formal rulings that annulled the sanctions, since it did not enter the market. background of the case. This is what he has done.
The Official State Bulletin reflected, on December 31st, a communication from the CNMC itself to one of the sanctioned parties, the Gremio de Industrias Lácteas de Barcelona, ​​in which it was informed of the reopening of the process as of December 21.

Other companies involved, such as Central Lechera Asturiana or Nestlé, have also received a notification from the agency, according to official sources confirmed by the newspaper. The CNMC, for its part, declined to comment on it.

In February 2015 This body made public the result of an investigation that began a year earlier, with which it accredited the participation of companies sanctioned in alleged anticompetitive behaviors, such as the information exchange for the setting of prices in the purchase of raw cow's milk or the cession of cattlemen.

It set a fine of 88.6 million for nine companies and two associations, then the fourth highest sanction imposed by Competition. Danone, with 23.2 million, was the one that received the highest sanction, followed by Corporación Alimentaria Peñasanta with 21.8 and the Lactalis Group, with 11.7. The rest were Nestlé (10.6), Puleva Food (10.2), Paschal Quality (8.5), Senoble (now Schreiber Foods, 929.000 euros), Central Lechera Asturiana (698.000), Dairy Industries Guild of Catalonia ( 200,000), Association of Dairy Companies of Galicia (100,000), and Central Lechera de Galicia (53,310).

All of them appealed the decision, and justice proved them right. The CNMC, as in this type of case, initiated an investigation process in which it drew up a Statement of Facts that communicated to the companies, opening a process of allegations that, once received, allowed to close this phase.

The problem arrived on April 24, when Competition reopened the instruction and communicated a new sheet, extending the years under investigation. In the case of NestléFor example, the CNMC added the period 2004-2006, justifying it by a "rectification of errors", figure contemplated in the law of public administrations, and which was the reason for a discrepant individual vote of a CNMC director.

In its judgment of July, the Supreme Court considered that the reopening of the statement was not due to the correction of an error, but to an increase of the file done in a conscious manner. The National Court considered that this was also applicable to all companies, giving them the reason and canceling the fines. However, it also ordered the rollback of the proceedings "immediately prior to (…) April 24, 2014" and "continue the procedure through its own channels that may culminate either with a sanctioning resolution or with a resolution of archive".

With the reactivation of the case, the CNMC will recover the process just before the reopening of the statement that ruined its investigation, and will continue with the usual channels: a new resolution proposal for the affected companies, which will be followed by the definitive resolution of your Council.
Given that the judicial decisions did not invalidate the substance of their investigation, it is expected that the process will crystallize in a sanction very similar to the one communicated in 2015.

Amounts provisioned in the balance

Advance. The reopening of the case does not change in essence the situation in which it was for the companies before the decisions of the Supreme Court and the National Court. Since the CNMC notified the sanctions in 2015, the various companies affected have been providing the amounts demanded by the competition authority in their accounts, although all of them defended the correction of their actions. Danone, the company that should take the largest muilta with more than 23 million euros, had this same amount provisioned in the balance sheet, according to its latest annual accounts for 2017, plus another provision added to cover the risks inherent in its deal.

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