German Sugar Cartel settles suit with BKartA, pays €280 million

On February 18, 2014, Germany’s competition authority, the Bundeskartellamt (BKartA) fined three sugar producers,  Pfeifer & Langen GmbH & Co. KG Südzucker AG, and Nordzucker AG a total of €280 million over their role in a sugar cartel that fixed sugar prices, production volumes, quotas, and sales areas.

According to BKartA’s investigations, the companies have colluded long before the beginning of its investigations in 2009—some arrangements dated back to the 1990s. Under the cartel’s arrangements, no company will sell sugar outside of its designated product area, and any surpluses would be exported. The cartel’s members also kept in close contact with each other over changes in their operations that may affect the existing sales area arrangements, such as plant closures, expansion strategies, the allocation of quotas and agreements on prices for processing and industrial sugar.

The companies used the European quota system, the minimum price guarantee and the resulting high market transparency to collude and to limited competition, according to BKartA chief Andreas Mundt, who added that the case is an example of how extensive market regulation can help to restrict competition to the detriment of customers.

A separate European Commission (EC) investigation into the sugar industry is ongoing.