CADE convicts LPG cartel in the Brazilian Midwest

On the hearing of 13 September, the Administrative Council for Economic Defense (CADE) convicted 26 companies and 16 individuals for a cartel in the distribution and resale market of liquefied petroleum gas (LPG), mostly known as cooking gas. The cartel operated in the Federal District, amongst other cities, in the Brazilian Midwest region. The parties involved are to pay BRL 26 million in fines. 

CADE decided that the involved parties colluded to restrict competition by dividing up the markets and fixing prices. Amongst the anticompetitive conducts, there were restrictions imposed on resellers by distributors and the exchange of competitively sensitive information.

The scrutiny started in 2008 when the Prosecution Services of the Federal District and Territories issued an administrative procedure to investigate possible anticompetitive conducts by the Brazilian Union of Transporting and Retailing Companies of Liquefied Petroleum Gas in the Federal District (Sindivargas) and its president. According to the investigation, the parties agreed on price adjustments and organized a "price monitoring commission" to monitor compliance with the collusion.

In April 2010, the special task force for combating organised crime (GAECO) and the investigative police of the Federal District (Deco/PCDF) conducted a dawn raid named “Operation Jupiter”. Back then, the police executed 32 search warrants in the Federal District and the state of Goiás.

CADE had access to pieces of evidence of alleged anticompetitive practices after filing a criminal action in the Justice of the Federal District.  The documents included tapped calls and material seized from the offices of the investigated companies.

In the period between "Operation Jupiter" and the launching of the administrative proceeding, some individuals and firms attended voluntarily at CADE to negotiate a cease and desist agreement. By signing the agreement, the signatories admit their participation in the conduct and collaborate with the investigation.

Of the firms found guilty of cartel activity, 25 operated in the LGP resale market and 1 in the distribution market.  Of the 16 convicted individuals, 14 were partners or directors of the firms. In addition to the decision, the Tribunal dismissed the case against 14 signatories due to the compliance with the cease and desist agreements. CADE also dismissed the cases against 9 individuals and 6 firms for lack of evidence.

Access Case nº. 08012.006043/2008-37.