22
Fri, Oct
57 New Articles

Antitrust Proceedings Against the Biggest Suppliers of Ground Coffee

Antitrust Proceedings Against the Biggest Suppliers of Ground Coffee

Serbia
Tools
Typography
  • Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

The Commission for Protection of Competition initiated ex officio antitrust proceedings against Atlantic Group, Atlantic Brands and Strauss Adriatic and conducted dawn raids, in order to investigate potential existence of restrictive agreements.

In May and June 2021, the Commission conducted an analysis of competition conditions in retail sales with selected food items in the Republic of Serbia – carbonated soft drinks, ground coffee, edible sunflower oil, milk, and dairy products. The analysis also included the retail price movements of certain ground coffee brands during the period between 2015 and 2020.

The results of the analysis have shown that the wholesale market for grounded coffee is a concentrated and stable market with a small number of market participants and the two largest participants and competitors – Atlantic Group which owns brands Grand coffee, Bonito and Barcaffe, and Strauss Adriatic which owns Doncafe and C kafa – whose joint market share was not below 80% during the period from 2013 to 2020, creating the conditions for much easier reaching the agreements between the competitors. The analysis of price movements also showed a simultaneous increase in prices of the selected products of Strauss Adriatic and Atlantic Group (“Doncafe Moment 200 gr” and “Grand gold kafa 200 gr“) at the beginning of 2017, whereby after this increase the prices were not significantly reduced until the end of the observing period. The results of the correlation analysis of retail prices of two selected products indicated that there is very high collusion of price trends of these two products. On the other side, raw coffee prices were continuously falling between 2017 and 2019. Having in mind that the raw coffee price participates with over 90% in formation of the final product price, the correlation between the movements of these prices during the observing period was expected. However, the analysis showed that these prices were changing in different directions. Furthermore, the analysis showed that there was no correlation between the movement of the raw coffee prices on the world market and retail ground coffee prices on the Serbian market either – while the prices on the world market were falling, retail prices on the Serbian market were increasing. The Commission reasonably concluded that the movement of retail prices of ground coffee brands of Atlantic Group and Strauss Adriatic does not indicate that they were formed as the consequence of the existing market conditions but as the consequence of the price policy coordination. The Commission also noticed that after the statements of directors of Strauss Adriatic and Atlantic Group indicating that the prices have not changed since 2017 and that they will not be changed, no price changes actually occurred.

Having all this in mind, the Commission assumed that Atlantic Group and Strauss Adriatic concerted their business strategies regarding the prices of ground coffee on the Serbian market, thus replacing the mutual competition with cooperation, leading to significant restriction, distortion, or prevention of competition.

A few years ago, the Commission investigated certain tobacco companies for the reason of their concerted practices. However, this investigation was suspended due to the lack of proof, so we should see how these proceedings will end.

By Nikola Poznanovic, Partner, and Katarina Randjelovic, Senior Associate, JPM Jankovic Popovic Mitic

Serbia Knowledge Partner

The oldest full service commercial law firm in Serbia, founded in 1991, JPM with three decades of experience in assisting local and international businesses presence and growth not only in Serbia but throughout the SEE region.

We have accumulated a wealth of knowledge in every industrial and corporate sector, from energy to banking, transport, manufacturing and telecommunications, while remaining true to a pioneering spirit that has always drawn us to follow the latest trends and developments in providing of our services to clients. Today we use the latest legal tech available in serving our clients and are expanding our services to clients from growing industries such as renewable energy, IT and life sciences, by offering innovative solutions and a pro-active approach to broaching new grounds.

Our expertise, experience, and commitment to professional excellence mean we are routinely involved in landmark cases and transactions, while our high standing among clients and peers sees us ranked among the leading law firms by independent guides such as Chambers & Partners, Legal 500, and IFLR1000.

We are known for working closely with clients and treating their problems as our own. Our lawyers pride themselves on being team players, fast and available, specialised in terms of practice area and industry, but versatile and creative in their thinking. We believe our advice should be tailor-made and that even the thorniest issue has a legal solution.

Our membership of Lex Mundi (the world’s premiere network of independent law firms) and the TLA (a regional alliance of leading firms from Slovenia, Croatia, Bosnia and Herzegovina, Montenegro, North Macedonia, and Serbia) means we have close working relationships with first-rate firms throughout the region and around the world, enabling us to operate as the perfect hub for SEE and other multi-jurisdictional transactions.

Firm's website: http://jpm.rs/

Our Latest Issue