Search the website

I718 - Dietary supplements: Antitrust launches an investigation against Enervit to verify any possible violations of the prohibition of vertical agreements that are restrictive of competition with effects on distribution


PRESS RELEASE


PRESS RELEASE

DIETARY SUPPLEMENTS: ANTITRUST LAUNCHES AN INVESTIGATION AGAINST ENERVIT TO VERIFY ANY POSSIBLE VIOLATIONS OF THE PROHIBITION OF VERTICAL AGREEMENTS THAT ARE RESTRICTIVE OF COMPETITION WITH EFFECTS ON DISTRIBUTION

The measure was notified today during inspections that were carried out in collaboration with the Antitrust Group of the Special Market Protection Unit of the Guardia di Finanza (Italian Tax Police)

At its meeting on 20th November 2013, the Autorità Garante della Concorrenza e del Mercato decided to launch an investigation into the conduct of the company Enervit to verify whether its action ran counter to the prohibition of vertical agreements that are restrictive of competition in its relationships with its own network of retailers and wholesalers that provided for minimum resale prices, full territorial exclusivity and an obligation not to compete for an indefinite period. The measure was notified today during inspections that were carried out in collaboration with the Antitrust Group of the Special Market Protection Unit of the Guardia di Finanza (Italian Tax Police).

In particular the investigation will be required to determine the possible anti-competitive effects of the following issues:

1)    the trade agreement concluded between Enervit and the owner of a pharmacy/internet site which provides for the fixing of a minimum resale price, with reference to products under the brand Enerzona;

2)    the invitation issued by Enervit to its own network of online retailers not to exceed a maximum percentage discount on sales via the internet;

3)    a leaflet distributed by Enervit among its own retailers containing an invitation not to sell Enervit products in the Italian language outside national borders;

4)    the distribution contracts between Enervit and its dealers which contain a ban on sales outside the territory or sales to exclusive client groups and an agreement of indefinite duration based on non-competition.

According to the Antitrust Authority, the agreement between Enervit and the individual pharmacist/seller online regarding the product line Enerzona could be part of a wider commercial strategy aimed at imposing minimum selling prices upon all its dealers, possibly also regarding other brands. It also seems that a standard communication sent to internet retailers with an invitation to observe a maximum percentage discount for sales on this distribution channel conveys the same message. The effect could be that of hindering the development of intra-brand price competition to prevent retailers from using one of the main levers for competition, the price level, with the effect of keeping prices at a higher level.

Even the ban on sales outside the national territory could represent a violation of the prohibition on restrictive agreements laid down under the Treaty, creating obstacles to the integration of the different national markets.

Finally, with regard to bulk sales, the standard contract of sale with dealers which provides for an obligation not to undertake any competition for an indefinite period and a ban on sales outside their own exclusive area, would seem to limit the possibility for a dealer to expand and diversify his customer base and lead to a reduction of intra-brand competition.

Proceedings are to be completed by 19th December 2014.

 

Rome, 26th November 2013