Nine Sherry bodegas fined €7m for breaching competition rules

sherry News Wine News
  • Monday 9 August 2010

Nine Sherry bodegas, an industry association and Sherry's Consejo Regulador have been fined for breaching competition rules.

Spain's National Competition Commission (CNC) fined the group a total of €6,723,000 after it obtained evidence of anti-competitive practices.

The CNC charges that between 2001 and 2006, several of Sherry's major wineries established a cartel to control the output and price of Sherry to be exported to foreign distributors of 'buyers own brand' (BOB) in Germany, the Netherlands, and Great Britain.

Those named, in decreasing order of fines levied, are Williams & Humbert, José Estévez, Barbadillo, González Byass, Emilio Lustau, Pedro Romero, J. Ferris, and Caydsa.

The CNC learned of the alleged misconduct because of the leniency application of one of the members of the cartel, Grupo Bellavista y Zoilo Ruiz Mateos.

Ruiz Mateos was granted an exemption in consideration for its cooperation in the investigation.

González Byass's leniency application was initially accepted for a partial diminution of the fine but was later rejected due to its subsequent failure to cooperate with the CNC.

The CNC conducted inspections at the offices of several of the alleged participants and at the Fedejerez headquarters.

Fedejerez has been levied a fine of €400,000 while the Consejo Regulador, Sherry's governing body, a fine of €200,000.

In a statement issued by its secretary, Bosco Torremocha, Fedejerez 'wishes to express its deep disappointment at what it considers some unfair and disproportionate penalties imposed by the CNC in their resolution.'

Torremocha indicated that Fedejerez would appeal the authority's finding to Spain's Audiencia Nacional adding that, 'we believe that this resolution will worsen the already grave crisis in a sector upon which depends more than 10,000 families.'

The CNC described the cartel's actions as a very serious violation under competition law in Spain and in the European Union as the companies' actions lessened competitive pressure between producers and created conditions for higher prices and poorer terms of purchase.

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