Twenty competing package delivery firms in France and their professional trade union have been fined a total €672 million for colluding on annual price increases for clients.
The French competition authority, Autorite de la Concurrence, stated the 20 companies shared sensitive information during group meetings with the transport and logistics trade association TLF, about annual pricing increases between September 2004 and September 2010.
Emails obtained during dawn raids on the TLF and companies involved showed evidence of the practices that had been kept from roundtable minutes.
In the 2006-2007 trade negotiations, the majority of the companies that had initially envisaged a price increase of about 5 per cent, increased their demands to 7 per cent following discussions.
The companies, including DHL Express France, Norbert Dentressangle and Royal Mail’s French arm, General Logistics Systems, are among the main players in the French package delivery market, with eight of them comprising 71 per cent of market share during the period in question.
“Virtually the whole of the French industrial and business sectors were affected by the practices, including e-commerce, a rapidly expanding sector,” a statement from the Autorite de la Concurrence read. In particular, SME clients – the majority of the companies’ clientele – did not have the negotiating power of the largest clients to reject or renegotiate the price increases, it added.
“A large majority of small and medium-sized enterprises (SMEs) making up the backbone of the French industry suffered the most from the practices as they had the price increases applied directly to them without being able to negotiate them which thus impacted their competitiveness.”
The authority was alerted to the practice by two of the companies involved - Schenker-Joyau and Alloin – who applied for leniency, and received smaller fines as a consequence.
The Autorite de la Concurrence also handed out a separate €1.4 million fine to 15 of the 20 companies for a smaller-scale agreement to design a system to pass on increasing diesel prices to customers. It involved the 15 companies charging an agreed ‘diesel surcharge’ on a monthly basis and using shared benchmarks. The specific increase would be indicated on clients’ invoices.
The Royal Mail said in a statement that it “recognises the absolute need to comply with European and national competition law and the necessity to prevent infringements”. The organisation has implemented an enhanced compliance programme in GLS France in order to strengthen the culture of competition law compliance.
The TLF union said that the authorities were “heavily penalising the sector”, which it says will now lose flexibility in the face of increasing global competition. Chairman Yves Fargues said the authority was punishing the sector for something that happened in the “distant past”.
Alloin: €32 million
BMVirolle: €4.9 million
Chronopost: €99.2 million
Exapaq (now known as DPD France): €99.2 million
Ciblex France: €250,000
Dachser France €33.4 million
DHL Express France: €81.2 million
FedEx Express France: €17 million
Gefco: €30.6 million
Geodis: €196.1 million
Global Logistics Systems France: €55.1 million
Heppner Societe de Transports: €3 million
Lambert et Valette: €500,000
XP France: €900,000
Norbert Dentressangle Distribution: €9.7 million
Normatrans: €1.8 million
Schenker-Joyau (now known as Schenker France): €3 million
TNT Express France: €58.5 million
Transports Henri Ducros: €300,000
Ziegler France: €10,000