Producer of paints and varnishes Tikkurila had been fixing prices of its products with home improvement stores Praktiker and Castorama for six years. It is another collusion on this market. Its discovery was possible thanks to obtaining the information from participants of this agreement.

Inadmissibe agreements of undertakings regarding prices of goods are among the most serious restrictions of competition. Participation in a collusion is subject to financial fines amounting up to 10% of the revenue. The leniency programme enables to avoid the penalty, or decrease it for the participant of the agreement who reports to UOKiK and provides evidence of the collusion.

Prohibited agreements which impede competition are often detected on construction markets.Over the period of last 5 years, UOKiK issued 15 decisions concerning undertakings colluding in this industry, regarding inter alia fixing the sales prices of paints and varnishes, ceramic roof tiles, gutters or wall materials. One of them regarded the collusion of cement producers who pided the market and fixed prices. Total fine imposed in 2009 on these undertakings amounted to PLN 411 million.

Proceedings concerning the price collusion between the producer of paints and varnishes, Tikkurila (formerly TBD), and two home improvement stores Castorama and Praktiker were initiated in December 2006. The information gathered by UOKiK clearly demonstrates that in the period 2000—2006 undertakings fixed in agreement the minimal retail prices for reselling paints and varnishes made by Tikkurila. At first the agreement embraced only several products but later the number increased to approximately  300 –  including  such brands as: Jedynka, Beckers, Tikkurila or Polifarb Dębica. Arrangements were made mostly with emails between persons employed on high posts of undertakings’ headquarters. Electronic messages sent for many years in a set group employees were the main evidence in the proceedings conducted by the Office. Their contents should be brought to attention; representatives of cartel participants wrote directly inter alia, we want to earn money together and not give them away pointlessly on the market; let's not accustom clients to such low prices in December!; date and prices were agreed with other chains as the minimum level.

Tikkurila, the initiator of the collusion sent offers of fixed retail prices to other participants of the agreement – Castorama and Praktiker.In the case of applying rates other than fixed, the stores risked e.g. suspension of supplies or increase in purchase price of a given product.

The effect of unlawful activity was the lack of competition among sellers of Tikkurila products. Intruducing unjustified price rises by undertakings with strong market position results in higher sales prices of the whole brand. The practice affected  mostly consumers who had to pay more for paints and varnishes than in conditions of undisturbed competition. The unlawful agreement was advantageous only for participating stores as they avoided price wars and could acquire higher margin than in conditions of effective competition.

During the proceedings two participants of the agreement expressed willingness to undertake cooperation with UOKiK – asking at the same time to be applied the  leniency programme. The first undertaking who provided information on the cartel was Castorama. As the undertaking did not initiate the agreement, refrained from participation in it and provided important and previously unknown evidence, the President of UOKiK refrained from imposing a  financial penalty on it. Tikkurila – as the second entity – filed the application under the leniency programme. Information provided by it also provided a significant evidence of a cartel’s existence, therefore the fine for the undertaking was reduced and amounted over PLN 9.3 million. Praktiker, the last participant of the agreement, will have to pay a fine exceeding PLN 39 million.

The decision is not final. The undertaking may appeal to the Court of Competition and Consumer Protection.

All participants of the cartel were previously punished by UOKiK for participation in competition-restricting practices on the market of paints and varnishes. Castorama and Praktiker participated in a collusion along with five other home improvement stores (Bricomarche, Leroy Merlin, Nomi, Obi and Platforma) and with Polifarb Cieszyn-Wrocław. Moreover, Castorama fixed prices with another paint producer – ICI. Tikkurila obliged its distributors to sell products at fixed prices.

Undertaking who would like to benefit from the leniency programme may submit their application  in person at the seat of the Office of Competition and Consumer Protection in Warsaw, to the employee of UOKiK for official record, by mail, faks or email: leniency@uokik.gov.pl. Answers to any questions concerning the programme are provided by UOKiK’s lawyers under  telephone number: (+48 22) 55 60 555.

Additional information the media:
Małgorzata Cieloch, Spokesperson for UOKiK
Department of International Relations and Communication
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Phone: (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: malgorzata.cieloch@uokik.gov.pl