Dutch regulator warns pet food brands of heavy fines for price fixing

A national regulator has warned that pet food brands that dictate the prices charged by retailers risk fines of up to 40% of their revenues or €90,000 ($97K).

The Netherlands Authority for Consumers and Markets (ACM) has issued 9 specific warnings to dog food brands that they must not influence what retailers charge. The ACM has received reports that some suppliers are using wholesalers to fix their prices.

Anti-competitive practices

Anti-competitive practices restrict retailers’ control over the prices they set for consumers, contrary to the rules, to keep prices artificially high.

Brands are prohibited from confronting retailers with their own sale prices, stopping supply to those who do not follow their pricing directives, rewarding those who do, or instructing others, such as wholesalers, to exert pressure on retailers.

Brands are also not allowed to repeatedly remind retailers of the recommended retail price of their products or comply with retailer requests to confront other retailers with their sale prices.

“Retailers must be able to set their own sale prices of the products in their stores, both online and offline,” explains Martijn Snoep, chairman of the board of ACM.

Snoep emphasizes that brands cannot pressure retailers to raise consumer prices.

“Dog owners want the best for their dogs. That means they might be more willing to shell out money. Brands in this sector seem to take advantage of that willingness. Dog owners are thus the victims of that,” he concludes.