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Antitrust in the Groceries Sector & Liability Issues in Relation to Corporate Social Responsibility pp 335–349Cite as

Switzerland

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Abstract

This report addresses the characteristics of competition on the food retail market in Switzerland and the legal framework competition is subject to. As will be outlined below, the Swiss food retail market is largely dominated by two large retailers that are organized as cooperatives. Despite the high degree of concentration, acquisitions by the two large retailers have occurred in the past and were not considered to harm efficient competition. Furthermore, market entries of foreign retailers, namely the German Lidl and Aldi retailers, could be observed in the past.

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Notes

  1. 1.

    Federal Law of 6 October 1995 on Cartels and other Restraints on Competition (Law on Cartels, LCart; SR 251).

  2. 2.

    Coop/Carrefour, RPW/DPC 2008/4, pp. 593 et seq., paras. 146 et seq.

  3. 3.

    Credit Suisse, Retail Outlook 2013, pp. 19–20.

  4. 4.

    Credit Suisse, Retail Outlook 2013, p. 20.

  5. 5.

    See Article 1 LCart.

  6. 6.

    The LCart does not include provisions on unfair competition. The LCart governs horizontal and vertical agreements, abuse of dominance and merger control. Unfair competition is dealt with in the Federal Law of 19 December 1986 on Unfair Competition (Law on Unfair Competition, LUC; SR 241).

  7. 7.

    Cf., CoopForte, RPW/DPC 2005/1, pp. 146 et seq., paras. 20 and 34.

  8. 8.

    See Annual Report of the Competition Commission, RPW/DPC 2012/1, p. 4.

  9. 9.

    Given the high degree of concentration in the retail grocery sector involving the two large retailers Migros and Coop, virtually all relevant case law involves these entities. In 2003, Coop acquired Waro, which at that time was owned by the parent company of Denner. In 2008, Migros acquired Denner, the then largest discounter in Switzerland, however subject to significant remedies, and Coop acquired sole control over the operating company of the Swiss Carrefour stores with Carrefour withdrawing from the Swiss market.

  10. 10.

    CoopForte, RPW/DPC 2005/1, pp. 146 et seq.

  11. 11.

    http://www.weko.admin.ch/aktuell/01054/index.html?lang=de.

  12. 12.

    Report of the Price Supervision Authority of 20 September 2012.

  13. 13.

    Credit Suisse, Retail Outlook 2013, p. 10.

  14. 14.

    See Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 4 of the operative part of the decision.

  15. 15.

    Ordinance of the Swiss Federal Council of 17 June 1996 on the Control of Concentrations of Undertakings (Merger Control Ordinance, MCO; SR 251.4).

  16. 16.

    See Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 164.

  17. 17.

    See Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 166 et seq.

  18. 18.

    See Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 185.

  19. 19.

    See Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 197 et seq. The authorities, however, did not exclude that “shopping tourism” may have a disciplinary effect on the retail sector.

  20. 20.

    See Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 211.

  21. 21.

    Coop/Waro, RPW/DPC 2003/3, pp. 559 et seq., para. 43.

  22. 22.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 208.

  23. 23.

    Coop/Carrefour, RPW/DPC 2008/4, pp. 593 et seq., para. 82.

  24. 24.

    Note that Migros owns and operates various manufacturing businesses such as Jowa (bakery products), Bischofszell (convenience food), Midor (biscuits), Chocolat Frey (chocolate bars, confectionary), Aproz (mineral water), Delica (the largest coffee roaster in Switzerland), Mibelle (cosmetics). A full list is available at http://www.migros.ch/de/migros-gruppe.html.

  25. 25.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., paras. 224 et seq.

  26. 26.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 236; Coop/Carrefour, RPW/DPC 2008/4, pp. 593 et seq., para. 103. Reference was made by the Swiss competition authorities to Rewe/Meinl (Commission Decision of 3 February 1999, M.1221), Rewe/Billa (Commission Decision of 27 August 1996, M.803), Ahold/Superdiplo (Commission Decision of 23 October 2000, M.2161) and Carrefour/Promodes (Commission Decision of 25 Janvier 2000, M.1684).

  27. 27.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., paras. 237 et seq.; Coop/Carrefour, RPW/DPC 2008/4, pp. 593 et seq., paras. 104 et seq.

  28. 28.

    Article 10(2) LCart.

  29. 29.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., paras. 419 et seq.

  30. 30.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., paras. 383 et seq.; see also Coop/Carrefour, RPW/DPC 2008/4, pp. 593 et seq., paras. 313 et seq.

  31. 31.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq.

  32. 32.

    Coop/Carrefour, RPW/DPC 2008/4, pp. 593 et seq.

  33. 33.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 1.12 of the operative part of the decision; Coop/Carrefour, RPW/DPC 2008/4, pp. 593 et seq., para. 1.6 of the operative part of the decision.

  34. 34.

    Credit Suisse, Retail Outlook 2013, p. 20.

  35. 35.

    Cf., e.g., Bell AG/SEG-Poulets AG (RPW/DPC 1998/3, pp. 392 et seq); Toni AG/Tochtergesellschaften der Säntis Holding AG (RPW/DPC 1999/1, pp 93 et seq); Unilever/Bestfoods (RPW/DPC 2001/4, pp. 701 et seq); Gemeinschaftsunternehmen The Coca-Cola Company/Nestlé (RPW/DPC 2001/4, pp. 746 et seq).

    In “Bell AG/SEG-Poulets AG”, the competition authorities noted the extraordinary vertical integration of Coop and Migros with respect to the slaughtering and distribution of poultry and the market power that came along with it. In other decisions, such as “Toni AG/Tochtergesellschaften der Säntis Holding AG” (concerning milk processing and the sale of milk products with combined market shares up to 75%) and “Gemeinschaftsunternehmen The Coca-Cola Company/Nestlé” (concerning soft drinks with combined market shares up to 55%), the competition authorities also noted and used as an argument the vertical integration of retailers to put into perspective the increase of market shares resulting from the concentrations. Furthermore, the market power of the retailers was explicitly used to answer in the negative the potential emergence or increase of a dominant position resulting from the concentration. In “Toni AG/Tochtergesellschaften der Säntis Holding AG”, the competition authorities held that the concentration with market shares up to 75% would create a countervailing power to the high degree of concentration on the retail market. In “Unilever/Bestfoods” the competition authorities equally noted that the market shares of up to 60% resulting from the concentration on certain food-markets would not lead to a dominant position as the principal competitors Nestlé, Migros and Coop would account for sufficient competition. Moreover, Coop (being active on both the supply and the retail market) noted that its own position would be strong enough so as to permit the substitution of Unilever/Bestfoods products with other products.

  36. 36.

    Avis n° 97-A-04 of 21 January 1997 regarding various questions concerning a concentration in the distribution in the retail sector (“Avis du 21 janvier 1997 relatif à diverses questions portant sur la concentration de la distribution).

  37. 37.

    CoopForte, RPW/DPC 2005/1, para. 98.

  38. 38.

    Denner/Pick Pay, RPW/DPC 2006/1, p. 138, para. 57.

  39. 39.

    Migros/Denner, RPW/DPC 2008/1, pp. 129 et seq., para. 607. The same criteria were later confirmed and applied in Coop/Carrefour, RPW/DPC 2008/4, pp. 593 et seq., para. 479.

  40. 40.

    Jürg Borer, Wettbewerbsrecht I, Kommentar, N 4 on Article 7 KG, with further references.

  41. 41.

    Cf., e.g., Roland von Büren, Eugen Marbach, Patrik Ducrey, Immaterialgüter- und Wettbewerbsrecht, 3rd. ed. (2008), para. 1520.

  42. 42.

    Cf., Supreme Court of 11 April 2011, case 2C.343/2010, pt 4.3.4.

  43. 43.

    Ibid.

  44. 44.

    Pursuant to Article 49a(1) LCart, any undertaking that behaves unlawfully pursuant to Article 7 shall be charged up to 10 per cent of the turnover that it achieved in Switzerland in the preceding three financial years. The amount is dependent on the duration and severity of the unlawful behavior. Due account shall be taken of the likely profit that resulted from the unlawful behavior.

  45. 45.

    CoopForte, RPW/DPC 2005/1, para. 147.

  46. 46.

    Annual Report 2009 of the Competition Commission to the Federal Council, p. 17.

  47. 47.

    Pursuant to Article 6 LCart, the Competition Commission may publish general notices on Categories of agreements affecting competition that are deemed justified. These notices are not considered legislative acts such as Regulation 330/2010; rather, such notices are similar to the guidelines published by the EU Commission.

  48. 48.

    Jürg Borer, supra n 33, N 24 on Article 7 LCart.

  49. 49.

    Cf., Handelszeitung of 18 November 2012.

  50. 50.

    Cf., Jürg Borer, supra n 33, N 12 on Article 7 LCart.

  51. 51.

    E.g., para. (2)(c), any imposition of unfair prices or other unfair conditions of trade.

  52. 52.

    Marc Amstutz, Blaise Carron, N 301 on Article 7 LCart, in: Amstutz, Reinert, eds., Basler Kommentar zum Kartellgesetz.

  53. 53.

    Adrian Künzler, Roger Zäch, N 3 on Article 13 LPS, in: Oesch, Weber, Zäch (eds.), Wettbewerbsrecht II; Marc Amstutz, Blaise Carron, N 302 on Article 7 LCart, in: Amstutz, Reinert (eds.), Basler Kommentar zum Kartellgesetz, with further references.

  54. 54.

    Pursuant to Article 2(1bis) LCart, undertakings are all consumers or suppliers of goods or services active in commerce regardless of their legal or organizational form.

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  1. Prager Dreifuss Ltd., Berne, Switzerland

    Bernhard C. Lauterburg

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  1. Bernhard C. Lauterburg
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Correspondence to Bernhard C. Lauterburg .

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Editors and Affiliations

  1. de Weck, Zoells & Kobel, Geneva, Switzerland

    Pierre Kobel

  2. Attorney-at-law, Geneva, Switzerland

    Pranvera Këllezi

  3. Addleshaw Goddard LLP, London, United Kingdom

    Bruce Kilpatrick

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Lauterburg, B.C. (2015). Switzerland. In: Kobel, P., Këllezi, P., Kilpatrick, B. (eds) Antitrust in the Groceries Sector & Liability Issues in Relation to Corporate Social Responsibility. LIDC Contributions on Antitrust Law, Intellectual Property and Unfair Competition. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-45753-5_17

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