Franchise chain has fixed selling prices and shared markets of supply with respect to milking robots

The DCC ruled, that Lely Scandinavia, Lely Center Herrup, Lely Center Rødekro, Lely Center Tarm and Lely Center Viborg have made an agreement to directly or indirectly fix selling prices and share markets of supply, by agreeing not to make passive sales of Lely’s robotic milking systems and associated services, accessories and spare parts outside the area each franchisee is assigned. Thus infringing section 6 of the Danish Competition Act and article 101 of the Treaty on the Functioning of the European Union (TFEU). Consequently the DCC has ordered the parties to stop the infringement and refrain from similar anti-competitive behaviour in the future.

The Danish Competition and Consumer Authority (DCCA) conducted a series of dawn raids in November 2011, which led to the DCC’s decision.

Lely Scandinavia and the Danish Lely Centres (franchisees) have frequently met and discussed and coordinated prices with respect to Lely products and a geographical sharing of markets with respect to Lely products including Lely’s robotic milking systems, repair and maintenance of Lely’s robotic milking systems and accessories and spare parts used in Lely’s robotic milking systems.

The Franchise Agreement between Lely Scandinavia and each individual Lely Centre contains a clause in which the Lely Centre is not allowed to sell actively outside their exclusive regional area within Denmark. The anticompetitive behaviour may have caused increased prices on Lely’s robotic milking systems, repair and maintenance of Lely’s robotic milking systems and accessories and spare parts used in Lely’s robotic milking systems and might have caused increased consumer prices on dairy products.

For further information please contact Head of Division, Jacob Schaumburg-Müller, T: + 45 4171 5118.