CADE signs Agreement with Chocolate Companies association

The Brazilian Association Industry of Cocoa, Chocolates, Peanut, Candies and Derivatives – ABICAB, organization that gathers the biggest chocolate companies from Brazil, signed an agreement with the Administrative Council for Economic Defense (Cade) agreeing not to previously disclose information about prices increase, costs and production levels nor dates and percentages for readjustments. The obligation was established on Wednesday, July 3rd, through a Cease and Desist Agreement (“TCC” for its acronym in Portuguese).

The agreement puts an end to Administrative Proceeding no. 08012.001772/2009-88, which started in 2009, after ABICAD publically announced the expectation of price increase for Easter that year. Due to the fact that each market agent has the competence to estipulate its prices individually, according to the principle of free competition, the disclosure of that information to companies in the sector could lead to a generalized price increase, harming consumers.

The signature of a TCC has the goal to keep competition conditions in the chocolate, cocoa, peanut, candies and derivatives market and to repress similar practices. The agreement also provides for the payment of a contribution of 96.000 BRL. ABICAB will have to pay 70.000 BRL and the president and vice president of the association will have to pay 26.000 BRL.

The reporting commissioner of the case, Ricardo Ruiz, pointed out that the demonstration by the parties that the anticompetitive practices were ended was taken into consideration to determine the amount of the fines. “This factor was decisive to make the values lower than they would be in an eventual condemnation”. He also reminded that Cade has condemned both individuals and associations for fixing price and costs in the past.