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Estonian Competition Authority

Vodka cartel participants are finally convicted

On 7 June 2017 the Supreme Court announced that it will not commence proceedings with regard to Liviko vodka cartel. Thus, the convicting ruling of the Circuit Court comes into force. This ruling places the largest monetary penalty in Estonian legal practice upon Liviko and four retail chains – the total of ca. 11 million euros, ca. 1.1 million euros of which are to be paid immediately.

“This is a very important victory for us, because so far it is the biggest cartel case in Estonia, with which several large and well-known entrepreneurs are linked,” says Märt Ots, the Director General of the Competition Board. According to Märt Ots it is a complicated case, since the retail chains were not involved in direct communication upon conclusion of the cartel agreement. Without exception all communication took place via Liviko, which ensured that prices for cheap vodka were increased in stores to the agreed level. Liviko was interested in rising the prices both as the manufacturer of vodka and as its seller in Liviko own stores.

The criminal proceedings began in 2012. The ruling of the first instance court in the case was delivered in April 2015. Harju County Court convicted five companies – AS Liviko, Selver AS, Rimi Eesti Food AS, Maxima Eesti OÜ and Prisma Peremarket AS – as well as nine private individuals in concluding the cartel agreement, according to which in July 2009 the price of cheap 0.5-liter vodka bottles was increased to at least 63.50 euros. Two private persons were freed from charges.

In January 2016 the Circuit Court found that the accused shall be acquitted due to expiration of the limitation period, however, according to the Supreme Court there was no expiration and the case was returned to the Circuit Court. In December 2016 the Circuit Court made the decision in the case, according to which the decision of Harju County Court was left in force. The parties appealed to the Supreme Court, but on 7 June 2017 the Supreme Court announced that it will not commence proceedings with regard to this case. Thus, the ruling of the Circuit Court comes into force.

Among the vodkas covered by the cartel agreement the best-known was Laua viin that was the leader of this particular segment. Other trademarks, such as, for example, Valge viin, Torni viin and Katyusha were also involved. Although Altia Eesti AS – a competitor of Liviko – was not related to the cartel, the agreement concluded between Liviko and the retail chains also affected prices of Eesti Standard Vodka and Aus viin produced by Altia (in Prisma stores).

Mainly the procurement managers of the retail chains were involved in conclusion and implementation of the cartel agreement, along with Liviko sales director, sales manager and key customer administrators.

The court sentenced the legal persons involved to the following pecuniary punishment (listed by the amount of punishment):

Rimi Eesti Food AS - pecuniary punishment of 3 584 000 euros, of which 358 400 euros shall be paid immediately, and the remaining sum is a part of conditional sentence dependent upon the probationary period of one year.

Selver AS - pecuniary punishment of 2 956 000 euros, of which 295 600 euros shall be paid immediately, and the remaining sum is a part of conditional sentence dependent upon the probationary period of one year.

Maxima Eesti OÜ - pecuniary punishment of 1 907 000 euros, of which 190 700 euros shall be paid immediately, and the remaining sum is a part of conditional sentence dependent upon the probationary period of one year.

AS Liviko - pecuniary punishment of 1 276 000 euros, of which 127 600 euros shall be paid immediately, and the remaining sum is a part of conditional sentence dependent upon the probationary period of one year.

AS Prisma Peremarket - pecuniary punishment of 1 156 000 euros, of which 115 600 euros shall be paid immediately, and the remaining sum is a part of conditional sentence dependent upon the probationary period of one year.