Bulgarian Bread and Chicken Producers Hit Fines For Cartel Involvement

Bulgaria has fallen in sync with European anti-trust regulators by stepping up its investigation of cartels. Their latest moves come against agri-business firms that dominate several food sectors.

Bulgaria’s Committee for the Protection of Competition has just fined three baker’s and confectioner’s associations for cartel involvement. This action comes on the heels of fines issued against 26 egg and poultry corporations throughout the country for similar infractions.

The Committee first began investigating firms in the cereal sector after the price of breads rose substantially in 2007. It has since stated that the associations regularly forecasted and recommended what price should be imposed upon producers beginning as early as International Lawyer Network 2003. This coordinated, anti-competitive behavior is in violation of well established free market principles.

The Committee operated a similar investigation against chicken and egg producers at the same time. This investigation also began after a sizeable increase in the companies’ prices for chickens and eggs in August, 2007. The companies are alleged to have fixed prices and set the volume of chicken production, as well as operated a joint plan to control the applied prices and volume of egg production. Executives of one of the organizations fined, Stara Zagora, are said to have made market forecasts and issued recommendations for the timing of specified price increases.

The Bulgarian chicken and egg companies were fined a total of 293,000 levs (EUR146,000; US $239,000) for the anti-competitive conduct.

Prices for eggs and chickens fell dramatically between 2002 and 2007. During this period, industry officials met with greater frequency and are alleged to have focused on setting minimum prices.

The Bulgarian fines part of a larger effort throughout the European Union to protect citizens from unfair business practices, particularly in industries that have wide-ranging impacts on citizens. The European Commission recently raided the offices of several traders and distributors of cereal and other agricultural products suspected of price fixing. The products in question are used as food for both human and non-human consumption.

As with the Bulgarian investigations in agricultural products, the broader European raids follow a dramatic increases in grain, approximating a 50% increase across the board last year alone. Prices for corn, wheat and soybeans are now at record highs.

The Commission does not publicly name the companies it is targeting until investigations are complete, but their recent move signals that they are willing to bust any anti-competitive commercial behavior, even against the world’s most powerful transnational firms.

Anti-competitive conduct across Europe has been put under increasing scrutiny in recent years. Market enforcers hope to deter future cartel involvement and provide a remedy to citizens affected by unfair prices.

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