The president of UOKiK has ordered Xella Poland to change the contracts it signed with its distributors since they were of anti-competitive nature. The company is voluntarily abandoning the contested clauses.

Proceedings in this matter were initiated in December 2007 following a market inquiry carried out by the Office. During the proceedings, UOKiK contested a clause used by Xella, a producer of construction materials and owner of such brands as Yong and Silka, in its contracts with ten biggest distributors. In the Office’s opinion, putting distributors under an obligation “not to apply prices lower than the purchase price ” is of anti-competitive nature.

However, at the beginning of the proceedings the enterprises agreed to voluntarily comply with the requests of the Office. Consequently, they were requested to annex the contracts in question, deleting the questioned wording. What is more, Xella Poland has to modify its contracts with other distributors of its products. The enterprises were given a month to fulfill the obligations they undertook. Afterwards, they will have to prove that they have performed the decision, i.e. amended the contracts. Additionally, Xella will have to provide UOKiK with a full list of distributors with whom it signed contracts and to produce selected ones at the request of UOKiK.

In the opinion of UOKiK, this procedure will allow to check effectively whether the contested clauses have been deleted. If the enterprise does not comply with the decision, it is possible to cancel it, issue a new one recognizing the practice as restricting competition and to impose a fine of up to 10% of a company’s previous year revenue.

According to the Act on competition and consumer protection, if in the course of proceedings enough evidence is collected to deem an infringement likely to have happened and if consequently the enterprise concerned undertakes to cease the practice in question, the President of UOKiK can issue a decision obliging the enterprise to fulfill its undertakings. Although price fixing is one of the gravest infringements of antitrust law, in certain cases it may be justified to refrain from imposing a fine in order to better achieve the statutory goal of eliminating antitrust conduct.
The proceedings concerned the following enterprises:
Xella Polska from Warsaw,
BIST from Warsaw,
Construction Materials Centre Hadex from Jastrzębie Zdrój,
GEN-BUD from Warsaw,
Polskie Składy Budowlane Group from Wełecz,
Construction Materials Wesołek from Chocicza,
PEAMCO Cosntruction Materials from Leszno,
PHU and B Sambud II from Ostrołęka,
P.P.H.U. Tęcza Construction Materials Wholesale from Koszalin,
Multiple Articles MATEX Z.M.P. from Wolsztyn,
Saint-Gobain Construction Distribution from Wrocław.
The decision of the President of UOKiK is not final. It can be appealed against to the Court of Competition and Consumer Protection.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: mcieloch@uokik.gov.pl