The Commission for the Protection of Competition (hereinafter the “Commission”), following the completion of a preliminary investigation and having evaluated the evidence before it, on 02/02/2021 issued decision no. 05/2021 according to which Charalambides-Christis Ltd had infringed article 6(1)(a) of the Protection of Competition Laws of 2008 and 2014 (hereinafter the “Law”) and corresponding article 102(a) of the Treaty on the Functioning of the European Union (hereinafter the “TFEU”).
The subject matter of the case entailed the Commission’s decision to conduct an ex-officio investigation into the pasteurized cow milk market. The Commission, having taken into consideration information from various sources, publications and press releases regarding the said market, unanimously decided to conduct an ex-officio investigation into the market of fresh pasteurized, high pasteurization and long-life cow milk, in order to investigate possible infringements of articles 3 and/or 6 of the Law and articles 101 and/or 102 of the TFEU, on the part of the enterprises that were active in the said market in the period between 2008-2014.
The investigation covered all products within the market of fresh pasteurized, high pasteurization and long-life cow milk and focused on the main dairy industries active in the production, distribution and trading of said products in the Cyprus market during that time.
In the course of the preliminary investigation procedure, an unannounced on-the-spot inspection (dawn raid) was carried out simultaneously at the premises of Charalambides-Christis Ltd (hereinafter “Charalambides-Christis”) and Lanitis Bros Ltd (hereinafter “Lanitis) which were the two leading companies active in the said market during the period covered by the investigation.
The investigation (dawn raid and questionnaires) led to the collection of a large amount of information, including agreements concluded between the investigated companies and their partners (such as points of sale and distribution companies), internal correspondence as well as correspondence between the two of them, price lists, etc, from which the Commission drew information on their pricing policies and their operations in general.
The Commission evaluated the collected data, in the context of its investigation for possible infringements of articles 3(1)(a) and 6(1) of the Law and 101 and 102 of the TFEU.
Amongst other points of focus, the Commission examined the possibility of a horizontal and concerted practices between the two dairy industries.
On 02/02/2021, the Commission, after evaluating all the collected data, unanimously decided that there were no infringements of article 3(1) of the Law and article 101(1) TFEU by the aforementioned dairy industries.
With respect to possible infringements of article 6(1) of the Law and article 102 TFEU, the Commission primarily proceeded to establish whether anyone of the two companies held a dominant position in one or more of the relevant markets.
The analysis that was carried out showed that Charalambides-Christis held a dominant position in the relevant markets of a) chocolate/flavored milk b) lactose-free milk. The Commission consequently performed an evaluation on the conduct of the dominant entity in the said markets, focusing on its pricing policy, in order to determine whether there was any abuse of its dominant position. For the purposes of its evaluation the Commission took into account, inter alia, the principles of case no. 27/76 United Brands v Commission.
Upon completion of its evaluation, and on the basis of the evidence before it, on 02/02/2021 the Commission unanimously decided that Charalambides-Christis had abused its dominant position in the relevant market of chocolate/flavored milk by applying excessive pricing on its products falling under the said market, thus giving rise to an infringement of article 6(1)(a) of the Law and article 102(a) TFEU.
The Commission, exercising its discretion, having evaluated the data before it and having taken into consideration the nature, duration and severity/gravity of the violation as well as all mitigating factors, unanimously decided to impose an administrative fine on Charalambides-Christis, amounting to €271,385.11 (two hundred and seventy one thousand, three hundred and eighty-five Euros and eleven cents) and instructed it to immediately cease the established violation of article 6(1)(a) of the Law and 102(a) TFEU and avoid any recurrence thereof in the future.
The relevant decision of the Commission, dated 02/02/2021, was published in the Official Gazette of the Republic on 03/12/2021 and is posted on its website.
THE COMMISSION FOR THE PROTECTION OF COMPETITION
23/02/2022
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