A ruling by the Reykjavík District Court today has concluded that recent exemptions to competition law, which permit meat processing plants to consult and merge with one another, are contrary to the Constitution of the Republic of Iceland and therefore have no legal force. The exemptions in the agricultural produce laws therefore do not prevent the Competition Authority from considering a complaint which demands that the Authority stops collusion and mergers in the meat processing sector.
The Competition Authority will set out its actions in response to the judgment in the coming days.
The judgment is available here.
Last March, amendments to the Agricultural Produce Act no. 99/1993 were passed by the Althingi (no. 30/2024), which permitted meat processing plants to consult and merge with each other, notwithstanding the provisions of the Competition Act. Based on these exemption powers, KS has, among other things, taken over Kjarnafæði Norðlenska, and the media has recently reported on the company's possible acquisition of B. Jensen, which operates a slaughterhouse and meat processing plant.
On 8 July, Innnes ehf. requested that the Competition Authority intervene against meat processing plants intending to merge or consult with each other under the exemption provisions. Innnes based its argument on the fact that the Competition Authority was not bound by the newly enacted exemption provisions, as they conflict with the provisions of the Constitution. Among other things, it was argued that Act No. 30/2024 had not received adequate consideration in Parliament, as in accordance with Article 44 of the Constitution, bills must be debated three times in Althingi.
The Competition Authority considered it unavoidable to reject Innnes's request, on the grounds that it was not within its remit to assess the constitutional validity of laws. The Authority therefore considered itself bound by the aforementioned exemption provisions of the Agricultural Produce Act. It consequently refused to process Innness's submission, as per the Competition Authority's letter dated 26 July 2024.
Innnes sued the Competition Authority in the district court, demanding that the authority's decision be quashed.
The notice was updated on 19 November 2024
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