On 7 December 2023, the Dutch regulator ACM fined four undertakings for market sharing agreements in relation to the production, processing and sale of different types of carrots. Salient detail of the case is that one of the cartelists (Veco) was also involved in the silver onion cartel, for which it was fined in 2012.
The case is rather clear-cut. The parties involved (Laarakker, VanRijsingen, Veco and Verduyn) entered into a written agreement on 4 August 2008 in which they divided the market in terms of product type. Parisian carrots would exclusively be produced, processed and sold by Veco whilst regular – cleaned – waxed carrots (waspenen) would be allocated to Laarakker, VanRijsingen and Verduyn. The agreement concerned sales of these carrots to industrial customers in the Netherlands, Belgium and Germany. The companies also agreed that Veco would receive financial compensation from Laarakker, VanRijsingen and Verduyn as the sales volume of Parisian carrots is lower compared to regular carrots. The compensation payments to Veco actually took place. The agreement contained a penalty clause of € 2 million per breach of its terms. Furthermore, Laarakker and Veco agreed separately that Laarakker was allowed to sell Parisian carrots to German customers after purchasing an agreed portion of these from Veco.
The ACM thus concluded that Laarakker, VanRijsingen, Veco and Verduyn breached Article 101 of the Treaty on the Functioning of the European Union and, its Dutch equivalent, Article 6 of the Dutch Competition Act. As the breach was quite clear, it is not surprising that the case was settled in a simplified procedure.
A simplified procedure means that the parties must acknowledge the infringement and accept the fine. It also means that the parties receive a 10% fine reduction, and the publicly available decision is rather short. A couple of noteworthy remarks in terms of the level of the penalties are the following:
- Two of the four cartelists (Laarakker and Verduyn) applied for leniency after the ACM conducted a dawn raid at their premises. They received a fine reduction of 40%.
- The penalty of Veco was increased by 50% for recidivism as Veco was also involved in the silver onion cartel. Veco was fined in 2012 for the silver onion cartel that took place between March 1998 and January 2011. The carrot cartel started in 2004 was nevertheless continued until February 2019.
- The parties would be given penalties ranging from € 5,7 million to € 1,1 million, but these were lowered to € 1,1 million for Veco and € 500,000 for Laarakker, VanRijsingen and Verduyn due to a successful financial-hardship request of the parties (this part of the decision is confidential).
Breaches of competition law basically cannot be any more hardcore than this carrot cartel showing that there are still markets in which hardcore cartels are established and maintained for a rather long period. It is even more striking that one of the cartelists continued the cartel while at the same time receiving a fine for being part of another cartel.