Eleven drugstores from Santa Catarina were condemned for cartel participation

The Administrative Council for Economic Defense – CADE condemned, on 23 January, 11 drugstores for cartel participation in the southern town of Curitibanos, in the state of Santa Catarina. In total, fines imposed against the drugstores total up to almost BRL 1.5 million.

The Reporting Commissioner Ricardo Ruiz explained that the companies involved in the collusion fixed a maximum discount amount of 20 per cent – which reflects on the final price of medicines, and shared the market based on the days of the week.
The eleven drugstores set a weekly schedule denoting which one could apply the discount each weekday. “All of them joined the scheme, posting the table with the weekly schedule in the windows of their shops,” stated Ruiz.

As Curitibanos is a small city and the shops are near one another, customers acknowledged the partition system based on the day of the week, and had to dislocate themselves to a determined drugstore on its day of discount. Thus, the competition was eliminated because the practice prevented shops to offer discounts on other days.

In addition, exposure of the weekly schedule in a visible location and the physical proximity of drugstores allowed cartel participants to monitor compliance with the agreement.

The Administrative Proceeding (PA no. 08012.004365/2010-66) began in 2010 after a complaint by the public prosecutor of Santa Catarina. Last year, CADE’s General Superintendence rendered an opinion recommending the condemnation of the drugstores and sent the case to CADE’s Tribunal.