Agricultural Produce Act – response to the Reykjavík District Court judgment

In a ruling by the Reykjavík District Court, which was delivered yesterday, 18 November, it was ruled that recent exemptions from competition law, which permit meat processing plants to merge and have specific consultations with one another, are unconstitutional and therefore have no legal force.

A letter was sent to meat processing plants

Following the judgment, the Competition Authority has today written to meat processing plants and their associations. The letter draws their attention to the fact that, according to the district court's ruling, the exemption provisions of the agricultural produce Act were not consistent with the constitution and therefore did not acquire the force of law. Consequently, competition law applies in full to the cooperation and mergers of meat processing plants. Meat processing plants have therefore not enjoyed any exemption from the provisions of competition law.

Furthermore, attention is drawn to the fact that competition law prohibits agreements and arrangements between undertakings which distort competition, as well as competition-restrictive practices by business associations. Furthermore, it should be noted that the Competition Authority must be notified in advance of mergers of undertakings exceeding certain turnover thresholds. The competition law also prohibits a merger from being implemented while the Competition Authority is considering it.

The following is addressed to meat processing plants:

• To immediately halt any actions or conduct that may contravene competition law and has been undertaken on the basis of the said exemption authorisations.
• Information is requested as to whether the company in question was designated as a producer organisation within the meaning of the Agricultural Produce Act, as this was a prerequisite for meat processing plants to be able to make use of the exemption provisions.
• If the relevant meat processing plant has entered into a merger or cooperation on the basis of the exemption authorisation, the company is required to retain all information and data that sheds light on the relevant conduct. In this regard, attention is drawn to the fact that it may result in administrative fines for companies and criminal penalties for individuals to conceal or otherwise render unusable data that is relevant to subsequent investigations.

Meat processing plants are also given the opportunity to submit views which may be used in the consideration of how to respond to the district court's judgment. The deadline for a response is Monday, 25th November.

A copy of the text of the letters is available. here .

Stakeholders given an opportunity to contribute their views

By this notice, the Competition Authority wishes to give all interested parties and others who so wish the opportunity to submit views that may be used in the further examination of how the Competition Authority should respond to the district court's judgment. Submissions should be received no later than Monday, 25 November, to the email address gogn@samkeppni.is

The judgment of the Reykjavík District Court, delivered on 18 November 2024, is available. here.

The Competition Authority's previous press release regarding the judgment is available. here.