The German Federal Cartel Office (FCO), the Bundeskartellamt,
has announced on 19 October 2016 that it has discontinued its fine
proceedings against two companies of the "Zur
Mühlen" group. Initially, the FCO had imposed fines in
the amount of € 128 million against those companies. However,
as a result of an internal reorganization of the group the fines
have now become obsolete. After an appeal against the imposed fines
major assets from the fined companies were transferred to other
companies of the "Zur Mühlen" group. Subsequently,
the companies that have been fined were liquidated.
Background: "Sausage cartel"
On 15 July 2014 the FCO had imposed
fines in the amount of € 338 million for illegal price
agreements against 21 meat products manufacturer and 33 persons
acting under responsibility. In particular, the FCO had found that
there was a fundamental understanding between the participants of
the cartel to regularly inform each other about demands for price
The fined companies used a loophole
in German law. In this regard, the president of the FCO, Mr. Mundt,
mentioned: "We would have liked to avoid this outcome.
However, the reorganization within the "Zur Mühlen"
group lead to the situation that the entitlement concerning the
payment of the fine cannot be enforced. The currently existing
loophole (so called "sausage loophole") made this outcome
Practical tip of Dr. Dethof:
The still existing loophole in
German law will probably soon disappear. The German federal cabinet
already adopted the draft for the modified Act against Restrictions
of Competition (GWB). As things stand at the moment the
modification will come into force in March 2017.
FCO press release of 19 October 2016 regarding the
"sausage gap" (only available in German)
The UK Competition and Markets Authority ("CMA") has a duty to refer a transaction for an "in depth" phase 2 investigation in instances where it believes that there is a realistic prospect of a transaction resulting in a "substantial lessening of competition", subject to certain exceptions.
The UK's Competition and Markets Authority (CMA) is consulting on changes to the UK merger regime proposed to reduce the burden of investigations into mergers where the parties operate in small markets.
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