Solgar Poland fined in supplement price-fixing collusion with retailers
In a statement by UOKiK’s President Tomasz Chróstny there was evidence to show Solgar Poland had agreed with its retailers to apply minimum resale prices for its dietary supplements.
The agreement meant consumers had been overpaying for these products for years with retailers unable to sell the firm’s supplements at a cheaper price.
“I imposed a fine of over PLN1.2m on Solgar Poland,” said Chróstny. “The investigation also revealed that two of the company's top executives were responsible for the collusion.
“The President of the Management Board and a member of the Management Board of Solgar Poland, who coordinated and supervised the activities of the company's other employees with regard to price setting, had a significant impact on the collusive scheme," he added.
Fines for these executives Grażyna Durkiewicz and Barbara Szymaniak exceeded €61k (PLN280K) with Durkiewicz fined €40.8K (PLN187,5K) and Szymaniak €20.4K (PLN93,750).
Solgar Poland, the distributor of US-firm Solgar and its dietary supplements, vitamins and minerals in Poland, vehemently denied any wrongdoing stating the UOKiK President had ‘misinterpreted’ the relationship between Solgar Poland and pharmacies.
“The distribution model used by Solgar Poland was aimed at the interests of consumers and providing them with the best possible care from pharmacies.
“Meanwhile, the President of UOKiK did not take these circumstances into account, assessing the case files only in a unilateral manner, in order to justify the previously adopted thesis.
“We feel aggrieved and we do not understand why the administrative body, whose main goal should be consumer protection, criticizes the commercial policy of Solgar Poland, without taking into account its beneficial effects for pharmacy customers,” the firm added.
“We believe that the allegations against the decision of the President of UOKiK will be confirmed by the court in the appeal proceedings, as a result of which Solgar Poland and its Management Board members will be cleared of all charges.”
In a case apparently stretching back over a decade, UOKiK also claimed the unauthorised arrangement between Solgar Poland and its retailers was in place since at least March 2010 through at least October 2017.
The arrangements were initially in writing and were expressed in the anti-competitive provisions contained in the agreements between Solgar Poland and its distributors, a claim supported by e-mails, telephone conversations and face-to-face meetings.
UOKiK revealed that in 2015, agreement wording with distributors was amended and provisions relating to the application of fixed retail resale prices were removed. However, Solgar Poland and the retail distributors continued to make arrangements.
“Solgar Poland monitored prices applied by its trading partners and took action if any of them tried to sell the supplements cheaper,” UOKiK stated.
“In the case of non-compliance with the arrangements, Solgar Poland threatened its distributors with retaliatory measures, such as loss of preferential cooperation terms or even termination of the agreement.
“Retailers also monitored each other's prices and informed Solgar Poland if any of them applied lower prices.”
Along with fines to executives, Solgar Poland and its registered office in Warsaw, was slapped with a penalty of €272,386 (PLN 1,251,734.76).
The office was the subject of a search back in May 2019, where UOKiK obtained the evidence pointing to Solgar Poland’s intentions to set minimal resale prices of dietary supplements with its retailers.