According to industry sources, Nestlé will not agree to a settlement with the BKartA in the case brought against it for the exchange of competitively relevant information. Nestlé is yet to be fined by the BKartA for its involvement in an exchange of information with other manufacturers of consumer goods. Once issued by the BKartA, it is strongly expected in the market that Nestlé will contest the fining decision in court.

The initial investigation by the BKartA into the exchange of competitively relevant information by manufacturers of consumer goods was triggered by an application for leniency, filed by Mars in 2008. Six manufacturers of consumer goods were consequently investigated. The accusations levelled against the consumer goods manufacturers allege that the producers exchanged information on the status of year-end-discussions and in certain cases on future price increases and that this conduct amounts to a cartel infringement.

The proceedings against five of the initial six defendants have now been concluded, with varying results. Of the six defendants, no fine was imposed on Mars (in accordance with the BKartA's leniency programme) and no fine was imposed on Henkel, as the company's conduct had already been dealt with by the BKartA in its 'drugstore products' proceedings in 2008. Three of the four remaining manufacturers, Kraft Foods, Unilever and Dr. Oetker, agreed to have the proceedings terminated by way of settlement earlier this month (17 March 2011) and were fined € 38 million in total for the anti-competitive information exchange (see Community Week issue 513). Nestlé, as the only remaining defendant, is not expected to settle and remains the last of the initial six manufacturers against which a fining decision is yet outstanding. A fining decision by the BKartA is expected shortly.

According to industry sources, Nestlé is bracing itself to contest the fining decision (once it is issued) at the Higher Regional Court ('OLG') in Düsseldorf. One of the major questions in this case would be at which point an exchange of information with competitors constitutes an infringement of competition law. A second point of contention is likely to analyse, whether such information exchanges have had any detrimental rather than enhancing, effects on competition (a point which has always been highly contested in information exchange cases).

Many in the market would be pleased if Nestlé really does take these questions to the OLG, as a decision could shed some light on the current practices of the BKartA, which are by many considered too wide in their ambit. Once the expected fining decision by the BKartA has been issued Nestlé will have to consider its options, although the current position lends itself to the speculation that Nestlé will bear its teeth and fight.

To view Community Week, Issue 515 – 1 April 2011 in full, click here.

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