Have farmers been overpaying for 11 years? A gigantic fine for illegal division of the machinery market

The President of the Office of Competition and Consumer Protection imposed a fine of PLN 170 million on Claas agricultural machinery dealers for territorial and price collusion, the Office of Consumer Competition Protection announced on Monday. As a result of the illegal agreement, farmers were unable to purchase machinery and spare parts from a seller of their choice for 11 years.

According to the Office's announcement, the fine was imposed on Claas Polska, which manages the Claas agricultural machinery distribution system, and five dealers: Agro Sznajder WKP, Przedsiębiorstwo Techniczno-Handlowe Roltex, Świerkot, Agrimasz and Agroas. The collusion lasted for over 11 years – from at least October 2011 to at least January 2023.

The collusion – as explained by the Office of Competition and Consumer Protection – involved the territorial division of customers, which meant that, for example, a farmer who wanted to buy a Class tractor had to do so at the nearest dealer. As a result, for 11 years farmers could not buy agricultural machinery and spare parts for them at competitive prices and from a independently selected seller.

Dealers were assigned areas where they could sell machines. When the farmer approached the dealer himself with a request to present an offer, he was asked about his place of residence. If it was outside the dealer's assigned area, the farmer was directed to the “territorially appropriate” dealer. Sellers informed each other about such contacts, also through Claas Polska. Market division was supported by price arrangements. Their goal was to present a less favorable offer if a farmer from outside the area allocated to the dealer was interested in purchasing.

“Many farmers buy agricultural machines of the same brand for years. This is due to the knowledge of the equipment, access to parts and the ability to operate and repair it, and sometimes fears related to changing the brand. Therefore, the collusion regarding the sale of Claas machines and spare parts was extremely unfavorable for farmers,” said Tomasz Chróstny, president of the Office of Competition and Consumer Protection. “In exchange for brand loyalty, they were offered a higher price than they could have received under fair competition between dealers,” explained the president, quoted in the release.

The collected evidence indicates that Claas Polska took an active part in maintaining the division and pricing arrangements in the distribution network. She acted as a coordinator and guardian of the arrangements and monitored the market behavior of dealers. She also participated in correspondence between dealers regarding inquiries from customers outside their assigned areas.

The sellers themselves also monitored each other's actions and complained to Claas Polska if any of them did not comply with the terms of the collusion. However, if a dealer sold a machine to a farmer outside “his” area, he paid cash compensation to the seller from that area.

Fines imposed on individual companies totaled over PLN 170 million. The fine for Claas Polska amounted to PLN 71,246,000. PLN, for Agroas – 48 million 665 thousand. PLN, Agro Sznajder WKP – 15 million 402 thousand PLN, Agrimasz – 13 million 202 thousand PLN, Świerkot – 12 million 498 thousand PLN, Przedsiębiorstwo Techniczno-Handlowe Roltex – PLN 9,369 thousand zloty.

The decision is not final and the companies have the right to appeal to the court. (PAP)

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