Austrian price fixing case settled

At least six years of dairy product price fixing by Austria’s largest milk processor Berglandmilch and the republic’s biggest supermarket chain REWE will probably cost the dairy €1.125 million in federal court fines, according to preliminary sentencing in Vienna federal court. The court and the country’s restrictive practices investigation unit carried out raids in the dairy’s Wels (Upper Austria) headquarters during the winter and say they found proof that, at least between 2006 and 2012, Berglandmilch had stipulated the minimum retail price for its products in agreements with REWE. This practice is not allowed because it is felt that consumers then end up often paying more than they would when price control is left to the retailer.

REWE, which has over 30% of the Austrian food market with more than 1,400 retail outlets including subsidiaries Billa, Merkur and Adeg, is being asked to pay a much higher fine: €20.8m. Both companies have been found guilty of the restrictive practice, but the fines had still to be confirmed.

Berglandmilch runs 11 processing and/or packing plants in Austria and one in Germany with a total turnover (2011) of €832 m and throughput of 1.2 billion kg milk. Over 50% of turnover is earned from exports, mainly of premium cheeses with leading brand Schärdinger and of whey-based drinks under the Lattella label.