Against Čakovečki Mlinovi and the Animal Feed Factory, AZTN Initiated Proceedings Due to Possible Cartel Formation

The Competition Protection Agency (AZTN) has initiated proceedings against Čakovečki Mlinovi and the Animal Feed Factory from Čakovec for colluding to jointly set the purchase price of wheat. Both companies announced this on the Zagreb Stock Exchange, and AZTN informed the public about the reasons for initiating the proceedings through its website.

The reason is the existence of indications that the mentioned Čakovec companies, by determining the purchase prices of wheat in the relevant market during the period from 2020 to 2022, disrupted market competition by entering into a prohibited agreement within the meaning of Article 8, Paragraph 1 of the Competition Protection Act. Namely, agreements between two or more independent entrepreneurs operating at the same level of production or distribution, aimed at disrupting market competition among competitors through mutual determination of purchase or sale prices, are considered among the most severe forms of market competition restriction.

The information about the possible conclusion of a prohibited agreement was received by AZTN on July 12, 2022, through a letter from the Croatian Parliament, specifically its Agriculture Committee, which pointed out suspicions about the possible collusion of wheat purchasers in a cartel in 2022, within which the purchase prices of wheat are agreed upon.

The notice further states that AZTN, within its powers and jurisdiction, conducted a preliminary investigation of the situation in the relevant market to determine whether there are sufficient indications for initiating proceedings ex officio against wheat purchasers, to ascertain whether they disrupted market competition by entering into a prohibited agreement on wheat purchase prices during the period from 2019 to 2022.

Based on the data and documentation provided by 17 domestic wheat purchasers regarding wheat purchases in Croatia for the period from 2019 to 2022, AZTN determined during the preliminary investigation of the situation in the relevant market that only Čakovečki Mlinovi and the Animal Feed Factory have completely identical purchase prices for wheat in all five classes (premium, I., II., III., and IV.) in 2020, 2021, and 2022.

AZTN also, in accordance with its powers under the Competition Protection Act and based on the order of the High Administrative Court of the Republic of Croatia, conducted an unannounced search of the business premises of the mentioned entrepreneurs due to reasonable suspicion that evidence of market competition disruption through a prohibited agreement between the mentioned entrepreneurs is located in their business premises and/or with their employees.

As both the Animal Feed Factory and AZTN emphasize in their notices, the mere initiation of proceedings does not prejudge AZTN’s decision in this case, as the decision on whether Čakovečki Mlinovi and the Animal Feed Factory disrupted market competition by entering into a prohibited agreement that determined the purchase prices of wheat will be based on the finally established factual situation in the proceedings.