Chilean Chicken Companies Fined, Association Disbanded

CHILE - The national tribunal for free market competition has found three chicken companies guilty of collusion in the domestic market, and the national poultry association is to be disbanded.
calendar icon 26 September 2014
clock icon 3 minute read

In a unanimous decision, Tribunal de Defensa de la Libre Competencia (Court for the Defence of Free Competition) has found in favour of an injunction filed in November 2011 by the National Economic Prosecutor (FNE).

It stated that Agrosuper SA (Agrosuper), Business SA Ariztía (Ariztía) Limited and Agricola Don Pollo Limitida (Don Pollo) - through the poultry producers association of Chile AG, APA - colluded by agreeing to limit the production of chicken meat offered to the domestic market and allocated market shares of production and marketing of the product, in breach of the relevant law.

The case established the existence of illegal agreement through emails and other evidence seized by the FNE of coordination between the poultry companies. The meat from these companies amounted to 80 per cent of the total domestic chicken meat supply. Their collusion involved projecting future demand for chicken and allocating production quotas to each of the parties.

The ruling also states there is evidence that the APA had an important role in the coordination, implementation and monitoring of compliance of the agreement.

The Court noted that there was abundant evidence that poultry demand projections developed in conjunction with the APA were also used to fix prices within ranges aimed at restricting or eliminating competition from other stakeholders.

Agrosuper and Ariztía were ordered to pay the maximum fine provided by law, i.e. 30,000 annual tax units (UTA), while Don Pollo was fined 12,000UTA, equivalent to about US$25 million and $10 million, respectively.

Furthermore, APA is to be dissolved for its part in coordinating the cartel.

In future, Agrosuper will be obliged to request authorisation if it intends to further increases its share of any market in which it participates.

Former ministers, Butelmann and Depolo, agreed on the sentence. They wanted to apply a fine to Don Pollo of 30,000UTA and oblige all the poultry companies to request permission to participate in any operation regarding market concentration in this market as well as in any new trade association.

In addition, they wanted to oblige all the the companies to go through a five-year programme on complying with free competition laws.

Charlotte Rowney

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