BABY MILK PRICES
PRESS RELEASE
PRESS RELEASE
THE COMPETITION AUTHORITY HAS BEGUN AN INVESTIGATION INTO BABY MILK MANUFACTURERS
At its meeting on 8 July 2004, the Competition Authority resolved to institute an investigation into the following baby milk manufacturers: Nestlé Italiana S.p.A., Nutricia S.p.A., Milupa S.p.A., Nutricia Italia S.p.A., Plasmon Dietetici Alimentari S.r.l., Heinz Italia S.r.l., Humana Italia S.p.A., Star S.p.A., Mellin S.p.A., Abbott S.p.A., Milte Italia S.p.A., Chiesi Farmaceutici S.p.A., Dicofarm S.p.A., Bristol-Myers Squibb S.r.l. and Syrio Pharma S.p.A.. The purpose of the investigation is to ascertain whether there exists an agreement to restrict competition between them, in breach of article 81 of the EC Treaty.
The Authority had previously conducted an investigation into the baby milk industry, which it completed on 2 March 2000 with the conclusion that an anti-competitive agreement had been established between the principal manufacturers (Nestlé Italiana, Heinz Italia-Plasmon, Nutricia, Milupa, Humana and Abbott) to prevent baby milk from being sold through the main supermarket and chain stores, and to ensure that their products would only be sold through pharmacies, to help keep prices high. At that time the Authority had also imposed fines totalling some 6 billion lire.
In recent months, following further investigations and complaints from many consumers, the Authority had ascertained that baby milk prices (infant milk, follow-on milk, special milks) were considerably higher (sometimes more than double) than those charged in the largest European countries, and that sales were still small in supermarkets (about 10 percent) and there were no parallel imports from abroad. Since there appears to be no economic justification for this, the fact that prices in Italy are considerably higher than those charged by the same companies of the same products in other European countries appears to be due solely to coordination between the commercial policies of the baby milk producers. Other prima facie indications of such coordination can be found in the agreement concluded in May 2004 under which the baby milk manufacturers, who had been asked by the Minister of Health to lower their prices, had agreed to reduce the prices of their products simultaneously and to the same degree, and secondly in the "recommended retail prices" distributed by the manufacturers to pharmacies, which apply then almost in their entirety.
This conduct suggests that an anticompetitive agreement may have been concluded. Since such an alleged anticompetitive agreement would be potentially able to substantially hamper trade within the European Union, it must be appraised in terms of article 81 of the EC treaty.
Lastly, considering that the data that has been made available so far has shown that there are no parallel imports, despite the vast difference between the prices charged in Italy and those charged, for the same products, in other Member States, the Authority has deemed it appropriate to enlist the co-operation of the Competition Authorities of the other member countries of the European Union under Community Regulation 1/2003 (which came into force on 1 May 2004). New investigations have therefore been conducted simultaneously on the premises of the companies concerned not only in Italy, but also in France, Germany and Spain.
The investigation will be completed by 30 June 2005.
Rome, 15 July 2004