Another hub-and-spoke cartel decision by Turkey’s Competition Board

Turkey’s Competition Authority has been scrutinizing the retail market of fast-moving consume goods for a while. After the Competition Board sanctioned the largest supermarket chains in Turkey along with one of their common suppliers, for creating a hub-and-spoke cartel in 2021, it opened a similar investigation against the same supermarkets, namely BİM, CarrefourSA, Migros, Şok, and A101 as well as some of their common suppliers.

Within the scope of its investigation, the Competition Board, by the majority of votes, found that the same supermarkets and Coca-Cola, Doğanay, Düzey, Eti, Frito-Lay, GlaxoSmithKline, Haribo, Pasifik, Pepsi Cola, Red Bull, Şölen Çikolata and Uno engaged in hub-and-spoke cartel arrangements.

Although concluding that the five supermarkets were party to the hub-and-spoke cartel, thus infringing the competition laws, considering the fine imposed on them in 2021 and the principle of non bis in idem, the Competition Board did not sanction the supermarkets this time.

Similarly, the Board found that the mineral water company Beypazarı was also party to the hub-and-spoke cartel and should be held liable. That being said, given that the company was already sanctioned with the Board’s decision of 18.05.2022, the Board did not impose any fines on the company this time, based on non bis in idem principle. However, the Vice President and one of the members of the Board have dissenting votes on this particular part of the decision.

In addition to the foregoing, the Board also found resale price maintenance practices in the FMCG sector. The Board imposed additional administrative monetary fines on Coca-Cola, Doğanay, Eti, Frito-Lay, Haribo, Kent, Pasifik, Pepsi Cola, Şölen Çikolata, and Uno on the grounds that they restricted the ability and freedom of their resellers to determine their own resale prices. On this note, the Vice President expressed his dissenting vote with respect to the conclusion against Coca-Cola, whereas one of the Board members had a dissenting vote on the conclusion against Kent Gıda, a subsidiary of Mondelez International.

The fine ranges imposed by the Board due to the hub-and-spoke cartel differ between 1.2% - 1.8%, while they are between 0.6% - 0.9% for resale price maintenance. The total amount of fines imposed by the Board corresponds to approximately EUR 44.3 million. Once the Turkish Competition Board’s reasoning of the decision is published, we will have more insight on the background of the case as well as the Board’s findings.

Tagged with: Competition, Competition Board, Turkish Competition Authority, TCA, Investigation, Cartel, FMCG, hub-and-spoke, Gen Temizer Özer, Bulut Girgin, Simru Tayfun