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CADE breaks settlement record in longest-running antitrust case
Brazil’s Administrative Council for Economic Defence (CADE) has approved a 300 million reais (€82.6 million) settlement agreement with orange juice producers and nine individuals implicated in an alleged price-fixing cartel, 10 years after the enforcer rejected a similar settlement offer.
CADE’s decision-making tribunal yesterday said it had agreed a settlement with orange juice producers Coinbra, Cutrale, Citrovita, Fischer, Cargill, and Bascitrus, industry trade association Associação Brasileira de Citricultores and nine individuals. The companies admitted they had colluded to lower prices they paid to orange farmers; the settlement, which involved no infringement findings by CADE, is the largest the enforcer has ever agreed.
The settlement comes 17 years after the Brazilian enforcer first launched the investigation, and marks one more step in CADE’s longest-running antitrust case.
In November 2006, the enforcer’s tribunal rejected the companies’ offer to to settle the case for US$47 million – which adjusted for inflation, is similar to the present settlement amount. That decision went against recommendations by CADE’s investigative arm, which had urged the tribunal to agree a settlement, and instead followed an opinion by CADE’s federal prosecutor, an internal body that can issue advisory opinions.
The federal prosecutors office had said Brazil’s competition laws at the time did not allow for settlements in cartel cases.
As part of the settlement, the defendants have agreed to discontinue lawsuits challenging the legality of dawn raids CADE conducted in 2006. That appeal led to a 10-year judicial battle and multiple suspensions of CADE’s investigation; most recently, Brazil’s Superior Court of Justice had temporarily barred the agency from using evidence gathered in the dawn raids in its administrative proceedings pending the resolution of the appeals.
A CADE spokesperson said administrative proceedings continue against Cambuhy Citrus, CTM Citrus, Frutax Agrícola and Montecitrus Group – four smaller orange juice producers that are also implicated in the alleged cartel.
Joyce Honda at Souza, Cescon, Barrieu & Flesch Advogados in São Paulo said CADE’s settlement programme is successful, as this is a record amount defendants have paid to settle a case with CADE. However, it seems that judicial battles can create obstacles for CADE, as it allows companies to “bargain discounts in the negotiations”, she said.
Bascitrus, Cambuhy Citrus and CTM Citrus could not be reached for comment, and the other companies did not respond to requests for comment. Cargill sold its Brazilian juice business to Cutrale in 2024, and in 2012 Citrosuco merged with Citrovita, creating the world’s largest orange juice producer. Since the proceedings began, Louis Dreyfus has also acquired Coinbra.
A spokesperson at Louis Dreyfus said the company actively cooperated with the enforcer throughout its investigation.
CitrusBR, which has since taken over Abecitrus as the industry’s trade association, said it believes in peaceful relations between industries and suppliers.
In a statement, the president of Associação Brasileira de Citricultores Flávio Viegas criticised the settlement, and said the payment was disproportionate to the losses experienced by orange farmers as a result of the alleged cartel.
Counsel to Coinbra-Frutesp
Mattos Engelberg Advogados
Partners Ubiratan Mattos and Fernando Engelberg de Moraes, and associate Andrea Astorga
Counsel to Montecitrus Group
Franceschini e Miranda – Advogados
Partner José Inacio Gonzaga Franceschini in São Paulo
Source: http://latinlawyer.com/article/1099305/cade-breaks-settlement-record-in-longest-running-antitrust-case
