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Soft drink manufacturers’ association signs cease and desist agreement with Cade

Cease and Desist Agreement

Afrebras responds to a lawsuit over anticompetitive practices such as the standardization of commercial conduct among associates
by Assessoria de Comunicação published: Jun 20, 2018 05:24 PM last modified: Jun 20, 2018 05:24 PM

The Administrative Council for Economic Defense (CADE) signed a cease and desist agreement (TCC, in its acronym in Portuguese) with the Association of Soft Drinks Manufacturers of Brazil (AFREBRAS, in its acronym in Portuguese). The agreement was established under an administrative proceeding that investigates alleged anticompetitive practices that intended to standardize the commercial practices of their associates.

Afebras is an association that gathers regional cold drinks manufacturers (soft drinks, mineral water, and other non-alcoholic beverages). The investigation over the alleged practices was initiated after a report of the company Beertech (currently controlled by Ambev), submitted in November 2015.

According to the whistleblower, the anticompetitive practices involved the standardization of the commercial practices of Afrebras’ associates  through the exchanging of sensitive information; the  monitoring of their associates’ commercial behavior to verify which of them would have been practicing low prices; and the imposition of sanctions to those who failed to comply with the anticompetitive agreements, such as expelling them from the association.

As imposed by the TCC, Afebras committed itself to abstain from practicing any of the conducts investigated in the administrative proceeding, as well as adopt measures to assure that they will not happen again.

Furthermore, the indicted party must provide Cade documents, information and other materials concerning the investigated facts in the proceeding and pay, as a pecuniary contribution, BRL 110 thousand to the Fund for the Defense of Diffuse Rights (FDD, in its acronym in Portuguese), in four semiannual installments.

Because of the cease and desist agreement, the administrative proceeding regarding Afebras will be suspended until it is judged by Cade’s Administrative Tribunal when the compliance to the terms of the agreement will be assessed. Upon the full compliance with the TCC, the charges shall be filed.

Access the Administrative Proceeding n° 08700.011304/2015-10.