Long time sausage cartel busted in Germany

Known as the Atlantic Circle – named after Hamburg’s luxury Hotel Atlantic – the sausage cartel was comprised of several small scale producers as well as large international manufacturers including Herta, a company owned by Switzerland’s Nestle.

Acting on an anonymous tip, the German antitrust office launched an investigation that resulted in evidence proving that these companies met with the ‘basic understanding’ that they were to discuss market prices and future market development. It meant that various producers would agree to force retailers to pay more for different products such as raw or cured sausage, ham, Bratwurst, salami and Frankfurters.

Antitrust officials have fined 21 companies a total of €338 ($460 million) after discovering the operation ran back decades. The officials discovered that the country’s sausage makers have been ripping off consumers and retailers for years by operating a cartel meant to increase prices.

Andreas Mundt, head of Germany’s cartel office explains, “At first glance this fine may appear high but it reflects the large number of companies that took part, the length of time the cartel was operating and the billions in turnover in this market.”

While officials did not give specifics on how much each company was fined, they did state that fines ranged from a few hundred thousand euros to several million. Eleven of the accused companies cooperated with authorities and received reduced fines, however, Nestle claims the allegations are unjustified and says it will appeal. Herta Germany, nor any of its employees, was involved in the investigation.

Germany’s meat products industry employees some 60,000 people and produces more than 1.5 million tons of sausage each year. The industry generates at least €16 billion and exports an excess of €1 billion annually. It has a major presence in Europe’s largest economy.