The information regarding the decisions of Competition Council of the Republic of Lithuania was announced

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