HAVING CONCLUDED AN INFRINGEMENT OF THE LAW THE COMPETITION COUNCIL REFERRED TO THE CIRCUMSTANCES EXTENUATING THE LIABILITY, i.e. THE ACKNOWLEDGMENTS BY THE COMPANIES Press release, 28-02-2008 The Competition Council, having in its open meeting assessed the findings of the investigation and having heard the explanations of the parties concerned, passed the final resolution concerning compliance of the undertakings engaged in the milk purchase and processing business and the Association of such undertakings with the requirements of Article 5 of the Law on Competition. The Competition Council resolved that the undertakings, including the Lithuanian Milk Producers' Association Pieno centras, AB Kelmes pienine, UAB Kelmes pieno centras, UAB Marijampoles pieno konservai, UAB Modest, AB Pieno Zvaigzdes, AB Rokiskio Suris and AB Vilkyskiu Pienine, have committed the infringement of Article 5 of the Law on Competition, whereby all agreements which have as their object the restriction of competition or which may restrict competition are prohibited. It has been established that the undertakings referred to above have been exchanging confidential information about the quantities of raw milk purchased, quantities of individual milk products produced and marketed. The Competition Council resolved to impose the appropriate sanctions upon the undertakings that have, by virtue of such actions, infringed the Law on Competition. The Lithuanian Milk Producers‘ Association and the undertakings were obligated to immediately cease the actions constituting an infringement of the Law on Competition. The following fines were imposed upon the undertakings for the infringement of the Law on Competition: AB Pieno Zvaigzdes - LTL 865,900, AB Rokiskio Suris - LTL 824,800, UAB Marijampoles pieno konservai - LTL 256,500, AB Vilkyskiu Pienine - LTL 183,800, AB Kelmes Pienine - LTL 76,300, UAB Kelmes pieno centras - LTL 21,700 and UAB Modest - LTL 7,000. The investigation in respect of AB Zemaitijos Pienas that is not a member of the Milk Producers' Association and has not participated in the exchange of confidential information was terminated. The investigation was initiated by the Competition Council on the ex officio basis and completed within a comparatively short timeframe. (Investigations of a comparable scope normally last for a year or even longer.) The proceedings of the investigation included inspections of several undertakings, scrutiny of voluminous collected information, also assessment and comparison of statistical data, examination of the actions and communications between individual undertakings in addition to a comprehensive analysis of the situation in the dairy industry-related markets, covering the individual elements of the milk supply chain - ranging from purchase of raw milk to the production and marketing of various dairy products. The infringement of Article 5 of the Law on Competition established by the Competition Council is related to the prohibited actions committed by the undertakings - an exchange between the members of the Pieno centras Association of the information affecting the behaviour of competitors in the markets, which eventually affects the final prices and causes the restriction of competition. The investigation found a number of facts and circumstances evidencing that the undertakings, being members of the Association, have been exchanging confidential information, the possession whereof could have influenced the final decisions of the undertakings in the relevant markets. The membership in the Association itself does not entitle the undertakings to access to any confidential or restricted information. Such information was made accessible only to the members that themselves consented to disclose their data by signing appropriate authorisations to use such information. The investigation established that undertakings have put in place, through their Association, a certain information exchange system. By virtue of such a system, the undertakings, members of the Pieno centras Association, being competitors within the relevant markets for the purchase of raw milk for processing and the production of dairy products as well as the markets of individual milk products were able to follow the changes in the performance of each individual competitor, member of the Association, its market share and its changes; furthermore, the undertakings were able to perform the analysis of the relevant markets referring to relevant specific, rather than generalised data thus seeking to retain their stable market shares and isolate the markets from the entry of any potential competitors. The overall purpose of the exchange of information was to obtain, in consideration for the disclosure of performance information to competing undertakings, a guarantee that the competitors will refrain from any active competitive actions, i.e. essentially seeking to maintain the current stability in terms of market shares. While assessing the severity of the infringement of the Law on Competition, the role of individual undertakings in the commitment of the infringement and resolving on the fines to be imposed, the Competition Council duly considered all related circumstances. First, the infringement disclosed, in terms of damage in respect of consumers and competition, is way less severe than classical cartels whereby the undertakings agree concerning fixing of prices of certain goods or the sharing of the market on territorial basis. Furthermore, the Competition Council also took due account of the extenuating circumstances that materially facilitated the proof of the infringement. Some of the undertakings - AB Pieno Zvaigzdes, AB Rokiskio Suris, AB Vilkyskiu Pienine, UAB Modest - acknowledged certain facts established in the course of the investigation, namely, having, through the Lithuanian Milk Producers' Association Pieno centras, exchanged confidential information with other members of the Association on the amounts of the purchase of raw milk and the volumes of sales of certain milk products, thus restricting competition in the relevant market of purchase of raw milk for processing and the production of dairy products in Lithuania and thus committing an infringement of the requirements of Article 5 of the Law on Competition. The fact that during the investigation the companies were cooperating with the Competition Council and immediately ceased the infringement was also taken into consideration. The Competition Council Press Officer Palmira Kvietkauskiene ( tel. +370 5 279 1174) Unofficial translation done at the VSE Market Services Department + 370 5 272 14 06
The information regarding the decisions of Competition Council of the Republic of Lithuania was announced
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