Legal Proceedings Report • Jun 5, 2015
Legal Proceedings Report
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On 19 June 2015, Colruyt Group has signed a settlement with the Investigation Service of the Belgian Competition Authority (the "Investigation Service"). In doing so, the group accepts that infringements of the Belgian competition rules were committed in the period 2002-2007.
However, Colruyt Group assures that it did not set up a price-fixing scheme with other distributors and suppliers. The group also stresses that Colruyt has always honoured its lowest prices guarantee.
The settlement gives rise to the payment of a EUR 31,6 million fine. The full amount will be charged against the net result of the financial year 2014/15. As a result, Colruyt Group is no longer able to maintain its outlook that the 2014/15 result will match or slightly exceed prior year's result.
The Investigation Service deems that the Belgian distribution sector, with the help of suppliers, breached Belgian competition rules for branded perfumery, cosmetics and chemist's products in the period 2002-2007. In relation thereto the Investigation Service has proposed a settlement to end all pending legal proceedings subject to the payment of a fine.
Colruyt Group wants to refrain from engaging in years of legal wrangling with the government over the substance of the case and over facts that date back more than 10 years. It has therefore decided to sign the Investigation Service's settlement. The transaction will become final upon approval by the European Commission.
"We must admit that over 10 years ago our internal control processes were not as optimised as they are today, to provide a watertight guarantee that no external pressure could be exerted on the independent functioning of the Service Centre Price", Frans Colruyt, Colruyt Group's COO Retail says. "We are however convinced that our Service Centre Price has always ensured that Colruyt lived up to its commitment to offer the lowest prices."
Meanwhile the group has taken a whole series of measures to drastically tighten internal control procedures, to safeguard the autonomy of its Service Centre Price even further and to protect its buyers from external pressure. "Our customers can rest assured: with this broad range of measures Colruyt Group has done everything in its power to rule out price fixing," the COO continues.
"We have always cooperated fully with the investigation that has been ongoing since 2007," Frans Colruyt says. "But in no way has Colruyt ever charged unfairly high prices to its customers. The only thing that we have done over all these years, is consistently and transparently pursue our lowest prices policy. Everyone knows that Colruyt always follows all the prices in the market and as such always offers its customers the lowest prices."
Every day, 62 employees of the Colruyt Service Centre Price record 62.000 prices from stores all over the country. In addition, 6 employees sift through all the promotional leaflets. Where needed, Colruyt adjusts its prices to either match or undercut the lowest price in the market. The Service Centre Price autonomously sets the price at which a product will be sold, independently of any external pressure. It bases this pricing exclusively on its own price recordings made at competitors. In order for this to function correctly, Colruyt maintains a strict separation between the Service Centre Price and the purchase department. To achieve this, the procedures, agreements and internal control measures have been substantially improved in recent years.
By signing the settlement, Colruyt Group wants to settle the past and agrees to pay a EUR 31,6 million fine to the Belgian government. This full amount will be charged against the net result of the financial year 2014/15. As a result, the group is no longer able to maintain its outlook that the 2014/15 result will match or slightly exceed prior year's result.
• Publication annual results of financial year 2014/15 23/06/2015 (17:45h) • Information to the financial analysts 24/06/2015 (14:00h) • Publication annual report 31/07/2015 • General Meeting of Shareholders 30/09/2015 (16:00h)
For more information on this press release, you can submit your questions in writing to [email protected] or directly contact (T +32 2 363 51 11):
Colruyt Group operates in the food and non-food distribution sector in Belgium, France and Luxembourg with about 470 own stores and over 500 affiliated stores. In Belgium this includes Colruyt, OKay, Bio-Planet, Dreamland, Dreambaby and the affiliated stores Spar and Eurospar. In France, in addition to approximately 70 Colruyt stores, there are also affiliated, independent Coccinelle, CocciMarket and Panier Sympa stores. The group is also active in in the foodservice market (supplying food products to hospitals, company canteen kitchens, catering businesses) in France (Pro à Pro) and Belgium (Solucious). The other activities include the sale of fuels (DATS 24), digital print and document management solutions (Symeta) and the production of green energy. The group employs over 27.000 employees and recorded EUR 8,7 billion revenue in 2013/14. Colruyt is listed on NYSE Euronext Brussels (COLR) under ISIN code BE0974256852.
Statements by Colruyt Group included in this press release, along with references to this press release in other written or verbal statements of the group which refer to future expectations with regard to activities, events and strategic developments of Colruyt Group, are predictions and as such contain risks and uncertainties. The information communicated relates to information available at the present time, which can differ from the final results. Factors that can generate a variation between expectation and reality are: changes in the micro- or macroeconomic context, changing market situations, changing competitive climate, unfavourable decisions with regard to the building and/or extension of new or existing stores, procurement problems with suppliers, as well as all other factors that can impact the group's result. Colruyt Group does not make any commitments with respect to future reporting that might have an influence on the Group's result or which could bring about a deviation from the forecasts included in this press release or in other group communication, whether written or oral.
Deze informatie is ook beschikbaar in het Nederlands. Cette information est également disponible en français.
Only the Dutch version is the official version. The French and English versions are translations of the original Dutch version.
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