German consumers and farmers are estimated to have been overcharged for potatoes and onions to the tune of 100 million to one billion euros because a cartel of traders illegally agreed prices over ten years. The country’s anti-cartel authority has found that 80 to 90 percent of large distribution firms in the potato and onion trades regularly agreed the prices for deliveries to supermarkets. This shot up profits, at times tenfold, mostly to the damage of consumers who paid much more than necessary in the supermarkets. Seed potatoes for farmers were also said to have been sold over-priced. One of nine investigated businesses said they would make a statement next week and would not comment on the accusations beforehand. The manager of a searched firm rejected accusations. “We have no guilty conscience, we’re quite relaxed about it,” he told the major "Süddeutsche Zeitung" newspaper, adding that he couldn’t imagine that such a cartel existed. Fine procedures have begun for five enterprises and the home of one suspect was searched, the authority said.
An association of small and medium-scale farmers welcomed the investigation, saying not just consumers but also many farmers had been damaged and defrauded by agreements between large potato traders. A spokesman pointed out that several farmers had for a long time criticised murky and market-dominating behaviour by large seed potato and wholesale potato traders.
The alleged cartel traders had even determined which farmer could deliver to which trader.
The Greens farming minister of Lower Saxony state, one of the major potato growing regions, Christian Meyer, spoke of a scandal.
There’s cold comfort for consumers. Prices might drop, said a cartel law expert, but similar cases showed it would only be for a short while.
The "Süddeutsche Zeitung" (SZ) quotes an insider in the trade saying that since the cartel formed about ten years ago, it profited in the three-digit millions. The tabloid "Bild" even puts the figure at about a billion euros.
Bild reports that five of the nine businesses under suspicion are based in Schleswig-Holstein, Lower Saxony, North-Rhine Westphalia, Baden-Württemberg and Bavaria.
An industry insider told the Süddeutsche Zeitung that the cartel worked very simply. There is said to have been a kind of leader who, for example, before the big supermarkets placed their orders phoned his colleagues to fix the price for the week. The offers were then to vary by only one or a few cents.
About a million tonnes of potatoes a year are packaged in Germany. Seventy percent is home-grown, the rest imported.
Among the European Union countries Germans are lower than average potato eaters. Statistically last year each German ate 57 kilograms of them in all forms. Latvians, Poles and Greeks averaged 100 kilograms per person.