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German antitrust regulators fine further company in sausage cartel scandal

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Staff Writer | Wednesday October 3, 2018 5:13AM ET
German sausage
Europe   The Federal Cartel Office has already ordered 22 companies involved to pay

Antitrust regulators in Germany succeeded in imposing hefty fines against a further company in the so-called "sausage cartel" scandal on Tuesday.


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The sausage producer Wiltmann was found guilty by the Duesseldorf Higher Regional Court of colluding with 22 other producers on pricing and must hence pay a penalty of 6.5 million euros (7.5 million U.S. dollars). The court hereby rejected a legal appeal by Wiltmann against the fine, which was imposed against it earlier by Germany's Federal Cartel Office.

Since the first launch of investigations into the widely-publicized "sausage cartel" scandal, the Federal Cartel Office has already ordered 22 companies involved to pay total damages of 338 million euros. However, several of those found guilty of unfair competitive practices were able to rely on what has become known as a "sausage gap" in German antitrust law which enabled their mother corporations to evade the fines by simply dissolving subsidiaries embroiled in the scandal.

In the case, the Rheda-Wiedenbrueck-based Toennies Holding, a major meat producer in Germany, saved itself 128 million euros in fines by removing its subsidiaries Boecklunder Plumrose and Koenecke from the German registry of trading companies. The legal loophole concerning liability in antitrust procedures was subsequently removed on the basis of a proposal from the ministry for the economy in 2017.

So far, the government has only received around a third of the 338 million euros sought in total damages following the loss of 238 million euros anticipated antitrust income due to the sausage gap. The Federal Cartel Office is currently seeking to at least recover an additional 25 million euros in fines from companies whose antitrust cases were still ongoing when the loophole was closed.

 

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