Portuguese Competition Authority’s infringement decision regarding the Lisbon Breadmakers’ Association for exchanging information on bread consumer prices 

According to the Notice published by the Portuguese Competition Authority – Autoridade da Concorrência on 16 December 2008, said entity issued an infringement decision regarding the Lisbon Breadmakers’ Association – Associação dos Industriais de Panificação de Lisboa for failure to comply with Article 4 of the Portuguese Law nr. 18/2003, of June 11 (the “Law on Competition”), which is the national provision similar to Article 101 TFEU.

The Law on Competition is the relevant legislation concerning antitrust which establishes the general competition legal framework concerning anticompetitive practices, abuses of dominant position and merger control.

Our law distinguishes between collusive and non-collusive restrictive practices. Collusive restrictive practices include all agreements between undertakings, decisions by associations of undertakings and concerted practices, which have as their object or effect the prevention, distortion or restriction of competition in the market.

Similarly to Article 101 TFEU, the Law on Competition provides examples of anticompetitive practices, which include price fixing.

In this regard, the Competition Authority considered that the Lisbon Breadmakers’ Association, being an association of undertakings had issued an decision regarding the exchange of information on bread prices which had the object of preventing, restricting or distorting competition in the market and accordingly, it imposed a fine in the amount of €1.177.429.

The Portuguese Competition Authority’s investigation had been initiated further to the presentation of a complaint. Within its investigation the Competition Authority concluded that, between 2002 and 2005, the AIPL had implemented, together with its associates, a system for the exchange of information on the prices of bread.

According to the Competition Authority such a system was aimed at, directly or indirectly, fixing the purchase and selling prices, or interfering in the free setting of such prices by the market, thus artificially leading to either an increase or a decrease in said prices.

In fact, further to the Competition Authority’s view, the Breadmakers’ Association had promoted the distortion of the market for the sale of bread to the general public, which it regarded as a grave infringement to competition rules.

The calculation of the amount of the applicable fine took account of the aggregated turnovers of the 14 undertakings pertaining to the Lisbon Breadmakers’ Association which took part in the price fixing system.

In addition, the Authority pointed out that, further to the information provided by the National Statistics Institute, the segment “bread and cereals” was the one with the most significant increase in prices between 2002 and 2005 within the sector of Foodstuffs and Non-Alcoholic Beverages.
It should also be noted that the basic foodstuffs sector, and in particular the market for the sale of bread to final consumers has been regarded as an important area by the Portuguese Competition Authority, having been under its scrutiny over the past few years.