The FNE, in a summons document made public on December 19, and sent to Chile’s Court of Defence of Free Competition (TDLC), claimed feed companies, BioMar Chile SA (BioMar), Comercializadora Nutreco Chile Limitada (Skretting), Chile Alimentos Limitada (EWOS), and Vitapro Chile SA (Salmo Food), actively worked together to maintain an agreement to fix their sale prices of raw materials such as fishmeal and fish oil over the 12-year period.
FNE initiated an investigation of the Chilean fish feed industry in October 2016, and as part of that probe, all four companies were subject to unannounced inspections.
The Chilean competition authority cited email correspondence along with phone calls, and meetings to shore up the charges it made against those producers.
It has asked the antitrust court to fine BioMar, Skretting, and Salmofood the maximum penalty of around US$70m in total for the reported collusion.
It wants exemption, however, for EWOS in terms of financial penalties, saying the company was the first to furnish evidence of the price-fixing scheme.
"In this case, our investigation had, as a starting point, the confession of one of the members of the cartel," FNE Prosecutor Ricardo Riesco said in a statement.
Company reaction
A spokesperson for Cargill sent us a statement that outlined how shortly after the closing of the acquisition of EWOS from Altor and Bain Capital in October 2015, its EWOS employees in Chile informed it about practices in the salmon feed industry in that country that were "inconsistent with the Cargill competition policy and possibly violated the Chilean competition law."
The spokesperson said Cargill immediately initiated an investigation, self-reported to the FNE in January 2016, and ceased participating in the problematic conduct.
"The practices - limited only to Chile - included contacts with competitors that violated the competition policy and the Cargill code of conduct. We have conducted training for all our employees in Chile about our principles and compliance policies, including our competition policy. We have fully cooperated with the FNE. One of the requirements of our cooperation has been complete confidentiality around the process. Conducting business in an ethical manner is foundational to how we operate in Cargill."
The other feed companies allegedly involved are also foreign owned – BioMar is Danish, Skretting is owned by Dutch group, Nutreco, and Salmofood is Peruvian.
In an official statement, emailed to us today, Nutreco said: “We were formally served the complaint made by the FNE in December. We take competition compliance extremely seriously. We are carefully reviewing the complaint and will present our case in due course.”
Jørn Ankær Thomsen, chairman, and Jens Bjerg Sørensen, president of BioMar parent company, Schouw & Co, in a statement released late last month, said BioMar Chile has been cooperative, responding to questions and providing the documentation requested as far as that was possible.
“Further to the industry investigation, the FNE has now indicted BioMar Chile on charges of concerted practice, claiming that the company be fined up to US$24m. The charges are based on isolated circumstances related to the Chilean fish feed industry in the period 2003-2015.
“BioMar Chile does not acknowledge the charges brought by the FNE, and the company intends to rebut the charges that it has participated in concerted practices so as to restrict competition in the industry.
“Presumably, this will be a rather long-running case, but we will keep the market informed of any material developments in the matter," said the owners.
We are awaiting comment form SalmoFood.