French Dairy Cartel Busted After U.S.-Based General Mills Blows The Whistle

When you think of cartels and price fixing, what’s the first thing to come to mind? Probably drugs, oil, or electronics that fall off the back of a truck, but definitely not yogurt. Still, it was that very product that led to the bust of a French dairy product cartel after a U.S.-based company apparently crashed the colluding.

The Wall Street Journal reports that for nearly six years, the executives of 11 French dairy companies would secretly meet to fix the prices on fresh dairy products.

That ended today when the Autorité de la Concurrence – French antitrust regulators – ordered 10 of the companies to pay $205.2 million in fines for the anticompetitive practices employed between 2006 and 2012.

Authorities say the companies – the largest of which include Yoplait, Lactalis, Groupe Andros’s Novandie and Senoble – coordinated prices and price increases for private-label products like yogurt, milk-based desserts and fresh cream sold to large retailers in Europe.

The anticompetitive practices were carried out through secret meetings held in hotels and restaurant around Paris.

The only company not subject to the fine was Yoplait, which together with new part-owner General Mills denounced the anticompetitive practices, bringing them to the attention of regulators in 2011. As part of a clemency deal the company won’t face charges for its previous dealing with the cartel. Yoplait is also partly owned by French company, Sodiaal.

“When General Mills learned of these past practices, we brought the matter to the authority, cooperated fully, and put the practices to an end,” a spokesman for the company tells the WSJ. “General Mills has strict corporate policies for our operations, including antitrust compliance.”

Shortly after acquiring a stake in Yoplait in 2011, General Mills gave authorities a notebook full of the cartel’s arrangements and a secret cell phone containing the numbers of other cartel executives, both of which belonged to a former Yoplait executive.

Authorities say the cartel was particularly egregious because of the sheer size of the companies taking part. In all, the group represented more than 90% of France’s market for private-label dairy products, the WSJ reports.

French Dairy Product Cartel Busted After U.S. Company Blows Whistle [The Wall Street Journal]