Der Dickmacher

The thickmaker,” sugar. On 23 April 2013 the European and German Cartel Authorities carried out razzias at sugar processing plant company offices in four countries for suspected price fixing from 2004 to 2011. Sugar’s well-meant but interestingly unusual regulatory status in Europe has led to a lack of transparancy that apparently made it possible for pricing questions to arise. By law, 15% of European sugar must be imported from developing countries. European farmers who grow the roots from which the remaining 85% is processed are guaranteed a minimum price, but at strictly controlled quantities. Sugar beet farmers have to sell their product to the sugar-processing factories; very little sugar is traded on the open market. The six largest sugar processing companies control 80% of the European sugar market, writes the Süddeutsche. Two German sugar processors control 40% of the European market. The processing factories set the prices, which do not always track with world sugar prices. German consumers have been paying between EUR 0.60 and 1.00 per kilo (annual consumption averages ~36 kg/year/German). Sugar root farmers were getting 27 euros per ton until 2012 when, after a good harvest, the price jumped to 45 to 50 euros per ton.

Update on 18 Feb 2014: The German cartel authority [Bundeskartellamt] has fined Germany’s three largest sugar manufacturers ~280 million euros for collusion. The companies Pfeifer und Langen, Südzucker and Nordzucker were fined, as well as seven individuals. Südzucker had to pay nearly 200 million euros but Nordzucker’s cooperation substantially reduced that company’s fine.

(Dare   DICK maw caw.)

Bundeskartellamtliche Bußgeldleitlinien

The German Federal Cartel Authority‘s fining guidelines. Appeals to the record-breaking fine imposed on some cement companies for anticompetitive behavior in the 1990’s have prompted discussion of the rules governing Germany’s current maximum limit on cartel fines and how those rules do or do not fit into European and other international structures.

According to Hans Jürgen Meyer-Lindemann’s 08 May 2013 article in the Frankfurter Allgemeine Zeitung, the Cartel Authority updated its relevant rules in 2006 to match European regulations. IIUC, the German fine for collusion is based on the company concerned’s total collusion sales, averaging 20% of that for the “base fine”; but according to European and now German law the fine cannot exceed 10% of the total worldwide gross from the fiscal year before the year the sanction is imposed. Mr. Meyer-Lindemann wrote that the European Court of Justice in Luxemburg decreed for this purpose the definition of the company should be given a broad interpretation, and thus according to the ECJ not just a national subsidiary’s but the parent corporation’s entire worldwide sales should be used in calculating a maximum upper limit for fines for cartel law violations.

Mr. Meyer-Lindemann felt there remain some loose ends in conforming German to European regulations on this issue. Under European law, he said international corporation parent companies have responsibility in antitrust violations committed by their European subsidiaries. The German supreme court in Karlsruhe’s recent decision on the appeal to the cement companies’ cartel fine merely dealt with how to use international corporate assets to calculate more appropriate maximum antitrust fines and did not deal with assigning responsibility when international corporations are involved in such matters. The European approach of having a 10% maximum limit to cartel fines, he wrote, “has been massively criticized by some German commentators.”

(BOON dess car TELL omt lichh ah   BOOSS geld LIGHT lean ian.)

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