France's Danone must pay a €42m fine for its role in a cartel in Belgium, an EU court has ruled, backing Commission plans to get tough on repeat offenders.
The European Court of Justice upheld the fine, originally imposed in 2005, despite Danone's protests that it was too heavy. European Commission officials welcomed the ruling and indicated they saw it as a precedent for imposing larger fines on companies that have broken EU competition laws more than once. Danone was fined in 2001 after being found guilty of price fixing and market sharing on the Belgian beer market, through its subsidiary brewer Alken Maes. Several other brewers joined Danone in two cartels between 1993 and 1998, including Interbrew, which is now international brewing giant InBev. Top managers from Danone, Alken Maes and Interbrew were all implicated. Danone, which sold its brewing business in 1999 to focus on water, biscuits and dairy, was fined more than the other cartel members because it had broken competition laws before. Now, backed by this week's European Court of Justice ruling, the Commission said it would hit repeat offenders even harder in the future, as part of new guidelines on competition fines. Repeat offenders could see their fines doubled under the plans, with every infringement on both a national and EU level taken into account. Firms could also be fined an "entry fee" for entering a cartel – likely to be between 15 and 25 per cent of annual sales for the relevant product. The current rule that no company could be fined more than 10 per cent of its total annual turnover would be kept, however.