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CADE condemns cartel in the special food market

Public bids

The collusion reached public bids for the provision of PKU milk and other special food supplies in the states of Ceará and Santa Catarina
published: Nov 14, 2016 11:18 AM last modified: Nov 14, 2016 11:18 AM

On November 9, the Tribunal of the Administrative Council for Economic Defense – CADE condemned three companies and one individual for cartel practices in the special food market. The fines total BRL 8 million and are going to be reverted to the Fund for the Defense of Collective Rights – FDD, for its acronym in Portuguese (Administrative Proceeding 08012.009645/2008-46).

The companies condemned are Pronutri Nutrição e Farmacêutica Ltda., Nutrifar Nutrição e Farmacêutica Ltda. and Art Médica Comércio e Representações de Produtos Hospitalares Ltda., as well as the aforementioned individual. The accusations against Support Produtos Nutricionais Ltda. were filed.

In this context, the term special food refers to the PKU milk, used by consumers unable to metabolize certain types of aminoacids, such as phenylalanine. This disability results in Phenylketonuria, a metabolic disorder where undigested aminoacids are converted into toxic compounds and may entail mental disorders. 

The disease is diagnosed by the ‘Guthrie’s test’ and does not have a cure. However, a special diet based on the PKU milk can prevent health problems.

The special foods in question also refers to the food products used in the treatment of illnesses such as pressure ulcer, diabetes, hyperglycemia and renal failure, among others.

In the case judged by CADE, public bids conducted by the state governments of Ceará and Santa Catarina were rigged in 2008.

The condemned companies’ bids were very similar, constituting an additional evidence of collusion.

 “During the first stages of the public bids, the bids offered by the companies had equal or very similar prices. In the second phase, there were fewer bids when only the defendants have been qualified to participate. There were also coincidences in bids below the prices set on the public bids’ notice. This would not be possible without collusion,” explained the reporting commissioner Alexandre Cordeiro.