July 26, 2021

The National Court annuls by form defect the fines of 88 million to the 'milk cartel' | Economy

The National Court annuls by form defect the fines of 88 million to the 'milk cartel' | Economy

The National Court has canceled this Tuesday, by default form, the sanction of 88 million euros that the National Commission of the Competition Market imposed in February 2015 to 11 dairy companies -including the main ones in the country- for supposedly dividing the market for raw cow's milk in 2013. The Sixth Section of the Contentious-Administrative Law does not enter to assess the merits of the case – that is, whether the dairy companies operated or not as a cartel – and obliges the Commission to restart the file to correct the detected errors. In this way, the repetition of the proceedings could lead again to a sanction to the companies or an archival resolution.

In its ruling, the National Court applies to the 11 dairy companies a judgment of the Supreme Court last July. In that ruling, the high court considered a Nestlé lawsuit and annulled the Competition decision of April 2014 to expand the statement of facts on the investigation of the dairy cartel, which led to the administrative sanction of February 2015 against the 11 companies The Audiencia Nacional understands that all the administrative acts that resulted from that annulled decision of 2014 lack validity, and affect not only Nestlé, but the rest of sanctioned companies, among which are, among others, Puleva, Pascual, Celta, Feiraco or the Peñasanta Food Corporation, parent company of the Central Lechera Asturiana.

"A formal defect due to irregularity in the procedure can not exist only for some," says the ruling. The Audiencia obliges the CNMC to "roll back" the proceedings to April 24, 2014, the moment before the resolution that irregularly extended the statement of facts that led to the sanction. Thus, the court ruling states, "the proceeding may be continued through its own channels," and this "may culminate either with a sanctioning resolution or with a resolution of the file." The decision of a sanction to dairy companies for allegedly dividing the market and setting the price of raw milk – to the detriment of farmers – will depend on whether, once the proceedings are repeated, there is evidence to that effect.

The actions were initiated in March 2011 following a report by the Service for the Defense of Competition of Castilla y León, which revealed a series of irregular behaviors in the dairy market of that community. The report was later joined by a complaint from the Galician agrarian union Unions Agrarias-UPA against milk processing companies and distributors. In that complaint, mention was made of the difficulty of the small farmers to find alternative companies to which to deliver the milk of their animals.


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