Price-fixing
January 14, 2010
Germany's cartel office launched raids on major retail chains on Thursday as part of an investigation into alleged price-fixing.
Several of the country's biggest supermarkets, chemists and pet supply stores were among those checked by the authorities.
The focus of the investigation was on the prices for sweets, coffee and pet food. In total 24 companies are under suspicion of agreeing to set minimum prices for some of their items.
"The suspicions we had were based on several different ongoing investigations in the recent past," said Kay Weidner, spokesperson of the cartel office.
Consumers "ripped off"
Consumer protection organizations have reacted by calling for compensation to be paid to consumers who had been "ripped off."
"Should these suspicions turn out to be true, then this will shatter consumers' trust in our market economy," said Gerd Billen of the German consumer protection group.
Price-fixing is illegal in Germany and authorities have warned of high fines should the suspicions be confirmed.
Fines can be up to 10 percent of annual turnover. In an earlier price-fixing scam over coffee, the three companies involved were fined a total of 160 million euros ($230 million).
Companies pledge to cooperate
More than 100 police officers and officials were involved in the operation and companies checked included some of the sectors' biggest names, such as Metro, Edeka, Rewe or the discount supermarket Lidl.
Most of the companies involved have said they will support the investigations - as authorities have indicated that fines will be lower for those who cooperate with the police.
Traditionally, retailers agree terms with their suppliers at annual meetings. Authorities suspect that they also agreed illegally what the minimum retail prices should be for certain brand products.
The price fixing scandal comes at a time when German supermarkets are locked in a price war, with discount supermarket Aldi announcing on Thursday that it would lower prices by up to 23 percent. Competitors have already announced they will follow suit.
ai/dpa/Reuters/APD
Editor: Michael Lawton