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Price fixing in Dutch flour sector probed

By Jane Byrne , 15-Jan-2010

A suspected cartel in the flour industry in the Netherlands is the subject of an investigation by the Dutch competition authority (NMa), with the spotlight being placed on the practice of both domestic and foreign players in the sector.

Barbara Van der Rest-Roest, a spokesperson for the NMa, told BakeryandSnacks.com that, following an inquiry instigated in 2008 and several visits to flour producers, it submitted reports on alleged competition law violations such as price fixing and customer sharing to the companies involved last month and is now awaiting a response.

The level of fines or penalties to be imposed still up for consideration, she continued.

The spokesperson stressed that normal practice for the competition authority would be to hold of releasing any information into the public domain on ongoing investigations but that the NMa felt strongly in this case that the consumer should be informed with finished products using flour such as bread and pasta being such staple foods.

According to Van der Rest-Roest, while the NMa’s inquiry is only focused on the flour industry in the Netherlands, the authority is aware of similar investigations being underway by its counterparts in Germany, Belgium and Italy.

In December, two German flour mills were searched by officials from Germany's federal cartel agency in an investigation into alleged anti-competitive behaviour.

While in Italy last month, top pasta makers as well as the pastamakers' union were raided by police as part of an enquiry into price fixing launched in 2007 by the state prosecutor's office after complaints from consumer associations.

The price of pasta has risen by more than 50 per cent in the past two years, despite the cost of durum wheat declining.

Prosecutors in Italy suspect five companies including Amato, Barilla, De Cecco, Divella and Garofalo of having formed an illegal cartel to increase price, and the Italian antitrust authority has summoned pasta manufacturers and flour producers to a meeting next Tuesday.

In February 2009, the authority fined 26 Italian pasta manufacturers €12.5m, after they were found to be part of a cartel that operated from October 2006 to March 2008.

According to the European Flour Milling Association, the EU flour industry includes 3,000 companies, a large majority of which are small and medium-sized companies.

The industry employs about 45 000 people and represents a turnover of €15bn. Around 45 million tonnes of soft wheat and rye are milled on an annual basis to produce around 35 million tonnes of flour.

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