CADE convicts a cartel of school meal in São Paulo to pay a fine of over BRL 340 million

In the hearing of this Wednesday (14 April 2021), the Administrative Council for Economic Defence (CADE) convicted seven firms and seven individuals for a cartel in government procurements held by municipalities of the state of São Paulo for contracting outsourced services for the supplying of school meal. The Administrative Tribunal established the payment of a fine in the total approximate amount of BRL 340.8 million for the anticompetitive conduct.

The investigation held by the General Superintendence of CADE (SG/CADE) found that the enterprises and the executives would have exchanged information and coordinated to fix prices, get advantages in the procurements and divide the market of school meal in the metropolitan regions of São Paulo and Campinas and in the region of Sorocaba. According to the evidence obtained, the parties involved in the cartel would hold regular meetings to define and monitor the market division scheme. The meetings occurred in the headquarters of one of the firms.

During the investigation, the SG/CADE used data from more than 40,000 government procurement documents, held between 2008 and 2013, whose analysis substantiated the evidence of geographic division of the market, initially suggested by an investigation of the Prosecution Services of the State of São Paulo.

In his vote, the commissioner Luis Braido stated that the substantial evidence in the case files, documents and testimonies indicates the existence of a cartel involving the firms SP Alimentação, Sistal, Geraldo J. Coan, Convida, Nutriplus and Terra Azul in the Reverse Auction 73/2006. Regarding lot 2 of the Reverse Auction 08/2009, the evidence showed that the cartel was formed by the firms SP Alimentação, ERJ and Convida.

The Tribunal of CADE convicted the firms to pay fines of BRL 333,866,546.30, whilst the individuals must pay a total amount of BRL 6,932,194.87.

Besides the payment of fines, the firms have been prohibited, for a five-year term, to participate in procurements aimed at acquiring, divesting, providing works and services, and providing public services, which are carried out by the Federal, State, or Local Governments, and by the Government of the Federal District. The Tribunal determined that the wrongdoers shall be registered in the Brazilian Consumer Protection System, and recommended the government bodies to not grant payment in instalments of federal taxes to any of the wrongdoers.

The Tribunal also determined that a copy of the decision shall be submitted to the Prosecution Services of the State of São Paulo and to the Federal Prosecution Services (Prosecution Services in the Municipality of Taubaté, in São Paulo) for knowledge and possibly proposing a lawsuit for civil damages, as well as for the adoption of measures considered applicable within the criminal field.

Access the Administrative Proceeding no. 08012.010022/2008-16