CADE’s General Superintendence recommends condemnation of companies for cartel in the national sea salt market

The General Superintendence of the Administrative Council of Economic Defense - CADE issued an official opinion, published in the Federal Official Gazette on 24 March 2017, recommending CADE’s Tribunal to condemn 19 companies and three associations for cartel formation in the national sea salt market. The anticompetitive conduct would have occurred, at least, between 1984 and 2002.

The investigation (Administrative Proceeding nº 08012.005882/2008-38) was initiated in 2013, after the realization of dawn raids in the offices of the investigated companies and trade unions. The documents and the evidences collected   showed that the parties gathered to define prices, control the supply and share the market. The conducts had the support of sectoral associations and trade unions, such as Siesal, Simorsal and Abersal.  

Prices were fixed during regular meetings organized by the sector representative entities. The General Superintendence also verified that the cartel’s participants discussed the creation of a conglomerate that would control the salt supply. In this regard, there is evidence that the producers hindered salt sales to the refineries. The goal was to decrease the quantity of the final product in the market, in order to avoid price reductions.

The market division defined that each company had a specific production share. In addition, they established fixed customers to each cartel members, and all of them agreed to respect this customer distribution.

The General Superintendence also verified that four companies organized a parallel collusion in order to obtain advantages in public bids held by the Empresa Baiana de Alimentos S/A – EBAL.

The General Superintendence suggested the filing of the proceeding regarding one of the companies, since the gathered evidence did not confirm its participation in the cartel.

CADE’s Tribunal, responsible for issuing the final decision, will now judge the Administrative Proceeding. If the companies are condemned, they may have to pay a fine of 0.1 to 20% of their gross turnover in the year preceding the beginning of the proceeding.

Agreement

In November 2014, the Salina Diamante Branco and one employee of the company signed a Cease and Desist Agreement (TCC, in its acronym in Portuguese) with CADE and committed to pay a pecuniary contribution of BRL 5.5 million to the Fund for the Defense of Diffuse Rights – FDD.

By means of the TCC, the parties acknowledge their participation in the investigated conduct. They also committed to cease the anticompetitive practices and to cooperate with the investigative team.

The General Superintendence recommended CADE’s Tribunal to file the Administrative Proceeding related to the company and its employee that signed the agreement.