Inco-Veritas, the producer of famous Ludwik (dishwashing detergent) for 10 years has been fixing minimum resale prices of its products with distributors of household chemistry and garden fertilizers. During the proceedings the company undertook active cooperation with the Office under the leniency programme and the fine imposed was significantly reduced. Finally, the sanction imposed exceeded PLN 2 mln. The undertaking will also pay the fine for hindering UOKiK performing the investigation

Price fixing by undertakings constitutes one of the most serious infringements of competition. It is forbidden to conclude price fixing agreements which refers both to competitors and undertakings acting at different levels of the economic process (e.g. a producer and distributors of its goods). This kind of practice can result in imposing a maximum fine amounting 10 percent of the undertaking’s revenue earned in the accounting year preceding the year in which the decision was issued. However, thanks to the leniency programme undertakings may get immunity from fines or reduce them. The basic condition here is submitting a voluntary application to UOKiK and providing evidence for the existence of collusion.

The latest decision of the President of UOKiK concerns fixing prices by Inco-Veritas with distributors of its products. The evidence in this case was collected inter alia during the inspection with search performed at the undertaking’s premises and branch offices as well as at one of the distributors.

- Inco-Veritas concluded inadmissible agreements with distributors of its products, household chemistry and garden fertilizers. The prohibited practice, which consists in fixing minimum wholesale prices and dividing the market, was applied 10 years, till 2010 – informs the President of UOKiK, Mrs. Małgorzata Krasnodębska-Tomkiel.

The undertaking inter alia obliged its distributors of household chemistry to accept the wholesale prices, previously fixed by the company. The distributors couldn’t resale the goods at lower prices than the ones fixed by the producer. This practice was applied in the years 2000-2010 and regarded inter alia household detergents (e.g. Ludwik and Lucek dishwashing liquids), cosmetics (ABE) and shoe polish (Buwi). Moreover, in the years 2009-2010, the company determined minimum resale prices which could be placed in promotional leaflets of distributors.

Additionally, Inco-Veritas had a 10-year agreement with distributors of garden fertilizers, which consisted in fixing minimum wholesale resale prices of its products (including brands such as Florovit, Azofoska and Fruktovit). Furthermore, the company divided the market by prohibiting the sale of fertilizers to hypermarkets without its permission, thanks to which the producer had no concerns about the competition when selling its fertilizers to trading centres.

The distributors of Inco-Veritas agreed upon the selling conditions for the company products, which was put in question by the President of UOKiK. In the case of non-compliance with the agreement terms, the distributors were at risk of dissolving commercial relations. The concluded agreements affected the distributors’ contractors, and consequently consumers, who lost the opportunity to buy the household chemistry products and garden fertilizers by Inco-Veritas as prices lower than the fixes ones.

During the proceedings the company applied for reducing the fine under the leniency programme. The undertaking ceased the prohibited practice, cooperated with the Office during the proceedings as well as provided the antitrust authority with new data regarding fixing leaflet prices – for this reason the President of UOKiK decided to reduce the financial penalty by 40 percent and Inco-Veritas was finally imposed a fine amounting to PLN 2 070 023.

However, it is not the only financial sanction imposed by UOKiK on the undertaking. In another decision the entity was fined for failure to cooperate during the inspection with search when a representative of Inco-Veritas management, right after starting operation by the inspecting persons, tied to delete from laptop a document proving fixing prices of Ludwik and Lucek and shoes polish Buwi.

The two decisions are not final – the company may lodge an appeal to the Court of Competition and Consumer Protection.

It has been the 12th decision concerning inadmissible agreements concluded by Inco-Veritas with its distributors where the undertaking applied for immunity from the fine or its substantial reduction. To date UOKiK has received 45 leniency applications

It has been the 12th decision concerning inadmissible agreements concluded by Inco-Veritas with its distributors where the undertaking applied for immunity from the fine or its substantial reduction. To date UOKiK has received 45 leniency applications (including 16 summary applications, submitted when the European Commission is notified of the participation in a prohibited agreement which covers the territory of more than three MS of the EU).

UOKiK intends to raise awareness of benefits of leniency programme by conducting educational activities aimed at professional market participants. One of them is the spot based on drawings by Marek Raczkowski, presenting Staszek, its main character. Staszek persuades other parties of the agreement to acknowledge their participation in a collusion voluntarily. The spot can be found on the radio, tv and the Internet, which wouldn’t succeed without the support of 48 stations and portals who allowed the free of charge broadcast of the spot.

Undertaking who would like to benefit from the leniency programme may submit a formal application in person at the seat of the Office of Competition and Consumer Protection in Warsaw, to the employee of UOKiK for official record, by mail, faks or email: [SCODE]bGVuaWVuY3lAdW9raWsuZ292LnBs[ECODE]. Answers to all questions regarding the programme, even anonymous, are provided by UOKiK lawyers under the telephone number: +48 22 55 60 555.

Additional information for the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warszawa
Tel. +48 22 827 28 92, 55 60 314, 55 60 430
faks +48 22 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]