CADE opens investigation on alleged wheat flour cartel

CADE´s General Superintendence filed, on Monday (25/01), an administrative proceeding to investigate an alleged practice of cartel in the market of production (mills) and distribution of wheat flour in the North and Northeast of Brazil (PA 08700.000396/2016-85).

The investigated wheat flour mills are Moinho Dias Branco S/A Ind. e Com. de Alimentos, Grande Moinho Cearense S/A, Moinho Cruzeiro do Sul S/A, Moinhos de Trigo Indígena S/A – Motrisa, Bunge Alimentos S/A, J. Macêdo S/A e Ocrim S/A Produtos Alimentícios. The wheat flour distributors investigated are Estrelão Trigo & Pão Comércio Ltda., Cooperativa dos Panificadores do Rio Grande do Norte, Natal Trigo Comércio e Representações Ltda., Oestetrigo Distribuição e Representação de Alimentos Ltda. e CG Representações de Produtos Alimentícios Ltda. The  mills association Associação dos Moinhos de Trigo do Norte e Nordeste do Brasil and 53 (fifty three) individuals are also under investigation.

According to the initial report, evidences show that the parties have been meeting with the objective of limiting the competition by fixing price both at the production and distributors level. In addition, evidences also show that the parties created difficulties to the operations of distributors who didn´t adhere to the fixed prices.

The investigation started in 2008 when a Moinho Dias Branco’s former employee reported the collusion to the District Attorney Office of the State of Rio Grande do Norte, later forwarded to the extinct Secretariat of Economic Law of the Ministry of Justice.

In 2013 a search warrant was granted to CADE´s General Superintendence which carried out dawn raids at the companies and association premises.

An appeal filed by Moinho Dias Branco granted that the documents seized in its premises in the city of Fortaleza could not be analysed by CADE. The investigation was resumed in late 2015 due to the existence of strong collusive conduct evidence found in documents seized in other companies’ premises.

The parties will be notified to present their defenses. By the end of the investigation, CADE´s General Superintendence will issue an opinion on the conviction or on the filling of the case and will submit it for judgment by CADE’s Tribunal, which is responsible for the final decision.

If convicted, companies can pay fines ranging from 0.1% to 20% of their gross revenues, and individuals, from 1% to 20% of the value applied to companies.