Colombia Comes Down on Price Fixers With 7000% Increase in Finesby
Antitrust regulator cracking down on monopolies and cartels
Finance Minister Cardenas says price fixing hits the poorest
Colombian authorities are fining companies record amounts in a crackdown on anti-competitive practices, after decades of turning a blind eye while consumers often overpaid.
The nation’s antitrust regulator fined companies $126 million last year, more than triple the level from a year before, following investigations into sugar and rice producers. Until recently, monopolies and cartels had little to fear from the regulator: in 2009, Colombian businesses were fined a total of $1.7 million.
“Many countries have fought business cartelization since the 19th century, while we’ve pursued it for a few years,” said Pablo Felipe Robledo, who is leading the campaign as head of the nation’s Superintendency of Industry and Commerce, or SIC. “Competition is the backbone of the market economy.”
The crackdown is part of broader efforts to upgrade business practices in the Andean nation aimed at satisfying requirements for membership in the Organisation for Economic Co-operation and Development. Colombian businesses are much more aware of competition laws, and of the threat of being sanctioned, than they were five years ago, according to Finance Minister Mauricio Cardenas.
“By defending competition, and avoiding anti-competitive practices, you defend the wallets of the Colombian people, particularly the poorest,” Cardenas said in a Sept. 13 interview. “We need to reinforce this vision of solid work by the regulator acting with autonomy and independence.”
The campaign has continued this year, with producers of diapers fined $70 million, makers of toilet paper $62 million and makers of notebooks fined $19 million. The regulator found that the companies engaged in “concerted, continued and coordinated conduct” to fix prices.
As well as fining companies for price manipulation, the SIC is also taking steps to prevent businesses from gaining excessive levels of market dominance. Colombian businesses tend to have a high degree of market concentration by international standards, according to Jorge Restrepo, an economics professor at Bogota’s Universidad Javeriana.
“Before, nobody saw this a problem that needed fixing,” Restrepo said.
When Almacenes Exito SA, the nation’s biggest retailer, bought a regional supermarket chain in 2014, the regulator ordered the company to sell four stores, saying that the levels of market concentration “exceed the threshold of tolerance”. The company didn’t comment when contacted by e-mail.
SABMiller Plc’s local unit Bavaria controls about 99 percent of the country’s beer market, while Anheuser-Busch InBev NV owns the Bogota Beer Company, the nation’s biggest craft brewer. After AB InBev bid for SABMiller, the SIC ruled that the companies must avoid doing anything that would restrict the growth of competitors, or the entrance of new brewers to the market. Bavaria didn’t reply to an e-mail seeking comment.