Cow farmers fined over manipulating milk market

The Supreme Constitutional Court has upheld a €2.1 million fine previously slapped on the Organisation of Cattle Farmers (POA) for practices severely constraining market competition, it emerged on Tuesday.

The fine had been imposed by the Commission for the Protection of Competition (CPC) but cattle farmers challenged the decision at the administrative court, which sided with the competition watchdog.

POA subsequently appealed that ruling with the Supreme Constitutional Court. The latter upheld both the findings of the administrative court as well as the €2.1 million fine.

The organisation was found guilty on multiple counts, such as forcing members to enter into exclusive agreements for the distribution of raw cow’s milk.

According to the competition watchdog, whereas POA had the opportunity to afford its members – milk producers – the leeway to make available to the market (meaning non-members of POA) 15 per cent of their production, it did not do so.

Instead, the organisation incorporated terms in the agreements with milk producers, forcing the latter to deliver all the milk to POA.

This further restricted competition in a market already constrained by milk quotas, the CPC had said.

In addition, POA would impose “exhaustive sanctions” against producers who did not abide by these exclusive arrangements.

POA tried to argue in court that the competition watchdog was “biased” and that it had overstepped its authority.

The Supreme Constitutional Court rejected these arguments.

In justifying the steep fine, the competition watchdog said POA’s infringements of competition law were ongoing and open-ended. POA itself admitted that it never ceased the exclusivity agreements with milk producers.