Fine of CZK 8 million for Another Pet Food Distributor Forbiding Lower Prices
By the first-instance decision, the Office for the Protection of Competition (“the Office”) imposed a fine of CZK 8,656,000 on the undertaking Dibaq a.s. for entering into prohibited agreements on resale price maintenance in the sector of dog and cat food supply. The undertaking confessed to the anti-competitive conduct and accepted the fine imposed in the course of the settlement procedure. The decision has not been appealed and has already come into force.
In the course of the administrative proceedings, the Office has proved that Dibaq set minimum retail prices to its customers for the sale of pet food to end consumers in the period from 21 November 2018 to 14 September 2021. The undertaking Dibaq also monitored that retailers were not reducing prices below the set level and applied sanctions against those who sold the goods below the set level to end consumers.
By this conduct, the undertaking Dibaq concluded and implemented prohibited agreements on direct resale price maintenance aimed at distorting competition in the relevant markets of dog and cat food in the Czech Republic. The Office prohibited the implementation of these agreements in the future.
When imposing the fine, the Office considered the fact that Dibaq initiated and controlled the anticompetitive conduct and enforced the prohibited agreements. On the other hand, the party to the proceedings terminated the illegal conduct immediately after an on-site inspection, took internal steps to prevent infringements of competition rules in the future, informed its customers of the recommended and non-binding nature of the prices in question and cooperated actively with the Office throughout the proceedings. The Office further reduced the fine due to the implementation of a competition compliance programme and the fulfilling of the settlement conditions.
Suppliers shall not fix prices or otherwise restrict their customers, who sell the goods to end consumers, in price setting. Vertical agreements on resale price maintenance restrict price competition among individual retailers who are not able to compete for consumers through a more favourable price. The consequence for end consumers is an overall higher price level of goods. In the sector of pet food in particular, this is the fourth distributor to which the Office has proved such price restrictions. It may be concluded that a significant part of the market is affected by these agreements. Therefore, end consumers are not able to buy pet food from a retailer offering a more favourable price.
Press Unit of the Office
24/054 – S0103/2022
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