The Competition Council on Monday decided to punish chewing gum manufacturer Wrigley Romania and 26 economic operators that distribute its products by fining them 201bn ROL (some 5.5 million euros), the institution chairman Mihai Berinde stated.
The Competition Council at the end of November held hearings with the company and its distributors in an investigation on a possible breach of competition law.
The institution found that Wrigley and the 26 economic operators, 25 of which are either former or current distributors, and Rodipet as direct commercial partner of Wrigley, had breached the competition law by fixing the resale price in two ways: directly through the clause in the contract regarding the price and indirectly by fixing the level of discounts offered based on a rigorously set sales policy, as well as by splitting outlets and allocating clients between them. Therefore the first link of the distribution chain had a vertical agreement in place setting the price at which the economic operators on the second rung of the ladder would buy products, most of these operators being shops that do business with consumers.
In the case of Rodipet, which gets its supplies directly from Wrigley and not through a dealer, the understanding with the chewing gum manufacturer concerned setting the retail price for Rodipet''''s street stands.
The establishing of the resale price and the allocation of clients completely eliminated competition between dealers.
The application of the prices agreed upon hurt the consumer, who was forced to pay a price for Wrigley products that had not emerged through the free play of supply and demand at every link of the supply chain.
The Competition Council also banned Wrigley from recommending the resale price for its products, including a maximum price, to its distributors or to any commercial partner, as deals were found to have been struck on the setting of the resale price.
Interbrands Marketing & Distribution SRL, the largest distribution company in Romania, last year filed a complaint against the chewing gum producer with the Competition Council. The complaint came after Wrigley Romania filed a petition to be exempted from the provisions of the law regarding the chewing gum purchase and distribution contracts concluded with a series of economic operators.
The Competition Council ruled that Wrigley had not broken the law by abusing its dominant position, as its former distributor Interbrands had complained, because the investigation showed there were enough viable options available to sell and promote Wrigley''''s competitor products.
However, the agreements reached by Wrigley with certain stores, whereby Wrigley products were given exclusive rights to be displayed around the cash registers, even though they did not significantly affect competition on the chewing gum market for the period considered in the investigation, can act as additional hurdles for other players entering the market, according to the Council.
roxana.petrescu@zf.ro
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