Vertical price fixing - Düsseldorf Higher Regional Court raises fine against drugstore chain Rossmann
Yesterday the Düsseldorf Higher Regional Court imposed a fine of 30 million euros against Dirk Rossmann GmbH ('Rossmann'). With its decision the Court has significantly raised the fine imposed by the Bundeskartellamt on 23 December 2015. In 2015, the Bundeskartellamt concluded its proceeding against vertical price fixing in the sale of roasted coffee by imposing a fine of 5.25 million euros against Rossmann (see case summary of 23.12.2015 in German). The proceeding was one of several proceedings the Bundeskartellamt conducted against brand manufacturers and retailers (food retailers and drugstore companies) for illegally fixing retail prices. All in all, the Bundeskartellamt imposed fines totalling 260.5 million euros against 27 companies (see press releases of 18.06.2015, 09.05.2016 and 15.12.2016). Findings from these proceedings were incorporated into the Bundeskartellamt's 'Guidance note on the prohibition of vertical price fixing in the brick-and-mortar food retail sector' (see press release of 12.07.2017).
Andreas Mundt, President of the Bundeskartellamt: "
We welcome this ruling by the Düsseldorf Higher Regional Court. It was preceded by extensive proceedings on our part. We had detected and fined clear-cut illegal pricing practices among quite a number of manufacturers and retailers. The agreements concerned important product areas and were harmful to consumers. With its ruling the Düsseldorf Court has now confirmed that we were right to prosecute and punish these practices."
The proceedings were initiated with dawn raids at 15 sites in January 2010; they had been triggered by information gained in horizontal cartel proceedings concerning the sale of roasted coffee and confectionery.
The proceedings relevant for the Rossmann decision concerned vertical price-fixing agreements for roasted coffee products (filter coffee, whole bean coffee) between Melitta Kaffee GmbH (today: Melitta Europa GmbH & Co. KG) and its retailers, of which Rossmann was one. The agreements were in place between the end of 2004 and mid-2008. The Düsseldorf Higher Regional Court has now fully confirmed these findings and found Rossmann guilty of having intentionally engaged in illegal vertical price fixing. When giving the reasons for its judgement, the Court explained that Rossmann began in 2005 at the latest to participate in the price steering system introduced by Melitta in 1999, and that this participation only ended when the Bundeskartellamt started its investigation in May 2008. Rossmann's promotion prices for Melitta filter coffee, in particular, were agreed on a weekly basis between representatives of both companies. According to the Court, both sides benefited from this agreement. By including Rossmann in its price steering system, Melitta protected itself against price moves by Rossmann. Rossmann benefited, the Court held, by gaining information on the pricing behaviour of its competitors in the retail trade, which made their future promotion prices more predictable for Rossmann and thus helped Rossmann steer its promotion prices accordingly. The Court set its fine with a view to the fact that the case concerned a vertical infringement of competition law with nationwide horizontal effects in the sale of a major consumer good.
The Higher Regional Court's decision is not yet final. Appeals on points of law may be filed with the Federal Court of Justice.
In the series of proceedings against vertical price fixing in the retail trade, two more appeals are currently pending before the Düsseldorf Higher Regional Court. They were lodged by two regional EDEKA trading companies (EDEKA Handelsgesellschaft Nord mbH and EDEKA Handelsgesllschaft Hessenring mbH) which have appealed fines the Bundeskartellamt imposed in December 2016 for the vertical price fixing of beer products (see press release of 15.12.2016).