French Watchdog Fines Organic Wholesalers for Collusion

The antitrust regulator in France has issued fines totaling 12.7 million euros ($14.96 million) against four organic food wholesalers for orchestrating a price-fixing agreement that spanned seven years. The Autorite de la Concurrence determined that the companies engaged in a complex strategy to segregate organic brands between specialized retailers and traditional supermarkets to prevent price comparisons and maintain higher margins. Among the penalized firms, Synadis Bio received the largest fine of 10 million euros. Greenweez, a subsidiary of Carrefour, was fined 1.85 million euros, while ITM Enterprises, the operator of Intermarche supermarkets, was ordered to pay 740,000 euros. Les Comptoirs de la Bio received a fine of 80,000 euros. The watchdog noted that the collusion took place during a period of rapid expansion for the organic sector in the French market. The investigation revealed that the agreement began in 2017, triggered by the entry of AMAZON.COM INC into the market through the sale of products from Bio C Bon supermarkets. Transcripts from Synadis Bio board meetings indicated a defensive reaction to the e-commerce giant's move. > This represents a new and worrying competing activity for specialized organic stores because it blurs the lines between distribution channels and promotes price comparability. To counter this, Synadis Bio established agreements with wholesalers to ensure that certain brands remained exclusive to specific distribution channels. The regulator found that this practice significantly hindered both intra-brand and inter-brand competition. > The Authority considers this practice to be serious insofar as it has undeniably limited intra-brand and inter-brand competition, as well as price competition, between the two distribution channels. While the companies have the right to appeal the decision, they did not provide immediate comments following the announcement. The ruling comes as the organic market has seen massive growth, with overall sales quadrupling between 2010 and 2020, even as specialized stores saw their market share decline by 5 percentage points.