The Netherlands Authority for Consumers and Markets (ACM) has levied fines amounting to nearly EUR 12.5 million on four cold storage logistics companies regarded as major links in Holland’s port and transportation sector. Eimskip, Kloosbeheer, Samskip and Van Bon (now doing business as H&S Coldstores) have been ordered to pay between EUR 450,000 and EUR 9.6 million. Furthermore, five executives received personal fines, the highest of which was EUR 144,000.
Samskip was quick to post a statement at its website declaring that it will appeal AMC’s decision, and it was reported that Eimskip also plans to the challenge the decision.
According to ACM, between 2006 and 2009 those involved were holding merger talks during which time arrangements were made regarding prices, competition-sensitive information was exchanged, and customers were shared among each other. As a result, the Dutch watchdog organization has found that competition in the refrigerated warehousing sector was seriously impeded.
“These companies made illegal agreements, and thus distorted competition,” says Chris Fonteijn, board chairman of the Netherlands Authority for Consumers and Markets. Chris Fonteijn, chairman of ACM’s board, stated: “These companies made illegal agreements, and thus distorted competition. Competition is necessary for producing competitive prices, better quality and innovation in markets. Cartels are simply not allowed. One company fully cooperated with the investigation, and will therefore see its fine reduced. During the investigations into the cold storage market, two other companies also made promises to improve their behavior. With the fines and these promises, we wish to promote competition in this particular market.”
Kloosbeheer has admitted to its mistakes, according to ACM, and helped with the Authority’s investigation. Because of the high level of cooperation, its fine has been reduced by 10 percent.
In the period under investigation, Kloosbeheer was holding merger talks. The company admitted that it had been “too open too soon,” according to ACM, and that competition rules can also be violated when exchanging information during merger talks. Meanwhile, the Authority has observed that Kloosbeheer has implemented structural changes to its corporate culture and structure in order to prevent violations in the future.
Frequent Contact Between Competitors
During the 2006-2009 period, the fined companies distorted competition in various ways, according to ACM. Anti-competitive arrangements were discovered in various e-mailed communications, in which competition-sensitive information was exchanged.
“For example, the managers informed each other about the price for food storage,” stated the press release. “They also told each other the current utilization rates of their storage facilities, and thus whether or not they were looking for jobs. Sometimes they made arrangements about who would get which customer or about what price increase would be passed on. Also, arrangements were made about bids to potential clients, which meant that it was clear in advance who would get the job.”
Companies in the cold storage market are a key link in the food logistics chain, which handles many different temperature-controlled products ranging from fruit juices and vegetables to fish and meat. In and around ports engaged in import-export trade, many businesses work closely together in order to provide services fast and efficiently. However, this can lead to a situation where it becomes easy to make anti-competitive arrangements, according to ACM. Even to this day, the Authority says that it continues to receive indications that some businesses do not compete fairly in other segments of the port and transport industry.
Still on ACM’s Radar
The Dutch ports, together with the companies that are active in the port-related transport market, are a key driver of the Dutch economy. This industry represents almost six percent of the Netherlands’ GDP, and provides over 170,000 jobs. As such, ACM will continue to keep this industry on its radar screen for some time to come.
Notice to readers: This story is based on a press release issued by the Netherlands Authority for Consumers and Markets. The Hague-headquartered independent regulator is charged with competition oversight and enforcement of consumer protection laws.
