Three meat processing companies reach a settlement with the Competition Authority, thus assisting in an investigation into barriers to competition in the meat market.

The Competition Authority has been investigating whether, on the one hand, the Bónus stores owned by Haga, and on the other hand, eight meat processing companies, have breached Article 10 of the Competition Act. The companies did this through bilateral agreements or concerted actions in relation to the retail pricing of meat and processed meat products that the meat processing companies have pre-labelled for Haga (so-called pre-labelling).

Following an extensive investigation, including into email correspondence between the meat processing companies and Hagar, the Competition Authority presented its preliminary findings in July. The Competition Authority presented the companies in question with its preliminary findings in July, concluding that Hagar and individual butcher's shops had breached competition law in relation to the retail pricing of meat products in Bonus stores. The butcher's shops and Hagar were given the opportunity to comment on these preliminary findings.

Hagar turned to the Competition Authority and requested to settle the case. The Competition Authority reached a settlement with Hagar, which included, among other things, Hagar's admission of an infringement of Article 10 of the Competition Act and the payment of a fine (see the Competition Authority's press release of 27 September for further details).

Subsequently, Sláturfélag Suðurlands, Reykjagarður and Kaupfélag Skagfirðinga have also requested to settle the matter. On that basis, the Competition Authority has exercised its powers under the Competition Act and entered into settlements with the aforementioned companies. These involve the following:

• Kaupfélag Skagfirðinga (regarding its meat processing plant, KS) admits to having breached Article 10 of the Competition Act through agreements or concerted practices concerning the pricing of meat products in the retail shops of Bónus. The company is to pay a government fine of 40 million krónur for the breaches.
• Sláturfélag Suðurlands and Reykjagarður acknowledge having breached Article 10 of the Competition Act through agreements or concerted practices concerning the pricing of meat products in the retail outlets of Bónus. A fine of 45 million krónur is paid for the infringements. Reykjagarður is owned by Sláturfélag Suðurlands.
• The companies in question agree to take measures intended to enhance competition in the sale of meat products for the benefit of consumers. This includes, amongst other things, their commitment to cease all communication with resellers regarding retail prices and to phase out the sale of meat products marked with a suggested retail price.

It should be noted that the companies in question have, in their communications with the Competition Authority, emphasised that they had no intention of distorting competition and that, when assessing the nature of the matter, regard must be had to the long-standing tradition of pre-labelling among all companies in the food market.i.

This also facilitates the Competition Authority's investigation, and will bring about a change in the market much sooner than would otherwise be the case, with positive effects for competition and consumers.

With these settlements, the matter is concluded with regard to Kaupfélag Skagfirðinga, Sláturfélag Suðurlands and Reykjagarður. The involvement of other meat processing companies (Kjarnafæði, Norðlenska, Kjötbankinn, Síld og fiskur and Matfugl) is still under investigation.

Further information about the background and the lead-up to this matter can be found in press release The Competition Authority's statement of 27 September regarding the settlement with Haga.