Sausage makers appeal price-fixing fine

A group of German sausage makers were in court Tuesday to try and beat back an anti-trust fine for years of alleged price fixing on the country's favorite food.

The Federal Cartel Office (FCO) hit the sausage makers with a €338 million ($400 million) fine in 2014 after accusing them of a decades-long conspiracy.

But the well-financed industry responded with a number of firms taking action to avoid the fines. Dubbed the "sausage gap," the law stated at the time that parent companies could not be held liable for the fines imposed on a subsidiary if that subsidiary ceased to exist. As the subsidiaries disappeared, so did €240 million in fines. 

However, almost as soon as the trial began, the Lower-Saxony based firm Wiesenhof announced that it was withdrawing its complaint.

The reasoning behind the decision, the company said, was the prospect of even higher fines and the fact that "even if [they] weren't complicit in price-fixing, [they'd] have no guarantee that [they'd] be able to believably prove our innocence."

Some 22 companies and 33 individuals had originally been hit with penalties, but by Tuesday only three sausage makers were due to appear in the Düsseldorf regional court to challenge their €22.6 million share of the fine.

In addition to Wiesenhof, the other meat-making firms were Heidemark Maesterkreis, Franz Wiltmann and Rügenwalder Mühle, as well as five company officials.

They all deny accusations of belonging to a so-called "sausage cartel" and refuse to pay the fine.

Wiesenhof's move to step back from the appeal meant that the court must "start from scratch" when it reconvenes on January 9, Judge Ulrich Egger said.

Read more: Pleasing the palate in Germany

 

Nothing to hide

Wolfgang Ingold, the chief executive of Franz Wiltmann, told industry publication Lebensmittel Zeitung he had been advised to employ similar tactics to avoid paying a fine. "But we have nothing to hide and we want to see that confirmed by a court," he was quoted as saying.

Later, after Wiesenhof withdrew itself from the appeal, Ingold responded to rumors that the other companies were getting ready to cut a deal for a lower fine.

"I am not going to make any deals. We haven't to my knowledge done anything wrong."

In a worst-case scenario, the court could impose an even stiffer fine if it believes the accused have been telling lies. A verdict is not expected before May.

In the land of beer and bratwurst, consumption of sausages and processed meat has fallen slightly over the past few years, but Germans still eat about 60 kilos of them each year. 

The companies accused of price fixing were dubbed the "Atlantic group" after the Hamburg hotel where the first meeting was held to discuss the idea in the early 1980s, according to the FCO anti-trust watchdog.

After receiving an anonymous tip-off, the FCO discovered that the companies maintained regular contact and colluded to make German food retailers pay higher prices for their pork and poultry products.

bik, es/rc (AFP, dpa)