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Sinditanque-MG is condemned for price fixing in fuel transportation market

Condemnation

For the infractions, Sinditanque-MG will pay a fine of approximately BRL 319,000
published: Feb 06, 2014 04:00 PM last modified: Apr 12, 2016 03:17 PM

The Brazilian Administrative Council for Economic Defense (CADE) condemned the Union of Fuel and Oil Derivatives Transportation Companies of the Stated of Minas Gerais – Sinditanque-MG, and the institution’s former president, Juarez Alvarenga Lage, for influencing the uniform price adoption between competitors and for creating difficulties to fuel distribution companies’ performance in the state.

According to the Reporting Commissioner, Ricardo Ruiz, the conduct consisted of circulating a table to the State of Minas Gerais’ fuel distributors, in which prices were fixed for road transportation of fuel by third parties. The objective was to standardize the negotiation conditions and the price paid to cooperatives and autonomous fuel transporters from the refinery to reseller stations.

Sinditanque-MG also imposed sanctions to the distributors that did not obey its determinations, such as encouraging strikes of the affiliated companies and to block the access to various distributors in Betim terminal, which caused serious shortage issues to resellers. Thus, the Union made impossible to distributors to offer freight prices more beneficial to the stations.

“There is no doubt that the represented parties intended to influence the fuel transportation services’ market. Such conduct materialized itself by the disclosure of a price table and by the affiliated companies’ mobilization to pressure fuel distributors, with strikes and access restriction to the refineries of the Belo Horizonte metropolitan area”, stated the Reporting Commissioner. The Commissioner also highlighted that the price fixing through table by economic agents that offer the same product or service can lead consumers to pay excessive prices.

For the infractions, Sinditanque-MG will pay a fine of approximately BRL 319,000. The Union’s former president, Juarez Alvarenga Lage, was condemned to pay a BRL 31,000 fine.

CADE determined yet that Sinditanque-MG should abstain itself from intermediate negotiations of contractual transaction and fuel distributors, especially regarding the adoption of price tables to the services rendered. Moreover, the Union should avoid any practices that seek to establish prices and conditions to uniform negotiations to the services rendered by its affiliated companies.

The Administrative Proceeding (PA nº 08012.007002/2009-49) was opened in 2011 by the former Secretariat of Economic Law – SDE. Last year, CADE’s General Superintence published opinion asking for the case condemnation and submitted to the Tribunal’s judgment.