Tetra Pak receives record-breaking antitrust penalty from SAIC in China
After a five-year investigation concluding in November 2016, the State Administration for Industry and Commerce in China (SAIC) presented its case against Tetra Pak, in a landmark 47-page decision.
- found that Tetra Pak was guilty of abuse of a dominant position in China, in the period up to 2016
- demanded that Tetra Pak immediately cease its illegal practices in China
- imposed a RMB 667,724,176 fine (approximately US$98 million, €91 million), representing the largest antitrust fine ever imposed by the SAIC
The SAIC investigation observed several practices by Tetra Pak in China that would also be illegal in other jurisdictions, namely:
- contractual tying of packaging material with machine and technical sales, including during performance validation and warranty periods
- prevention of its paperboard suppliers from selling to Tetra Pak competitors
The SAIC also found that Tetra Pak had employed retrospective loyalty discounts in China, which foreclosed competition by awarding target-based discounts that applied to the entire purchased volume. This practice was not justified by reductions in cost of production and was judged by the SAIC to be specifically intended to exclude competition.
Response and implications
Tetra Pak declined to appeal the decision and has agreed to abide by the findings and directives in China. The principles and findings, particularly with regard to loyalty payments, are precedent-setting and are being scrutinised by other anti-trust authorities around the world.