NMa Fines Veterinary Cooperative for Cartel Agreements

The Netherlands Competition Authority (NMa) has imposed a fine of EUR 9.7 million on Coöperatieve Nederlandse Veterinair-Farmaceutische Groothandel A.U. (AUV) [Netherlands Veterinary Pharmaceutical Wholesale Cooperative A.U.] and a fine of EUR 750,000 on the vetinarian pharmaceutical wholesaler, Aesculaap, for infringing the Competition Act. NMa has determined that they contravened the prohibition on cartels through a system of exclusion and a refusal to supply.

AUV is a procurement collective for veterinary pharmaceuticals, to which 90% of all independent veterinarians in the Netherlands are affiliated. AUV refuses to supply its products to veterinarians who do not adhere to the internal rules with regard to competition, including the pricing of AUV's products and the policy with regard to the setting up of practices by the veterinarians who are members. The system of exclusion was maintained by means of annual lists. The veterinarians on this list were excluded from receiving supplies if, for instance, they opened a veterinary practice in an area in which a veterinarian operated or if they offered veterinarian pharmaceuticals at lower prices than those set by AUV. AUV had also agreed with the wholesaler, Aesculaap, that it would adhere to the list of veterinarians that were refused supplies. Aesculaap, which also sells AUV's products, is the only other wholesaler in the Netherlands, in addition to AUV, which offers a full range of veterinary pharmaceuticals.

By following a joint policy of refusing suppliers, sales prices were set and customers and markets were divided amongst the veterinary members. This removed the incentive for competition between veterinarians, both with regard to the provision of services and with regard to the provision of veterinary pharmaceuticals at attractive prices. AUV and Aesculaap adhered to this system up until the beginning of 2001.

In addition to a fine, an order subject to a penalty has been imposed on AUV and Aesculaap. This means that they must inform their customers within a period of two months that the policy of refusing supplies has been terminated. If they fail to do so, they will be required to pay a penalty.