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Brazil’s CADE ends longest-running case
Brazil’s Administrative Council for Economic Defence (CADE) has closed proceedings against 10 orange juice producers and 22 individuals, bringing an end to the agency’s 18-year cartel probe with a US$92 million settlement.
The enforcer confirmed on 28 February that it has dropped charges against orange juice producers Cutrale, Citrovita, Coinbra, Fischer, Cargill and Bascitrus, because they had complied with the terms of an earlier settlement agreement. It also dropped charges against the Abecitrus trade association and 10 individuals for the same reason.
The juice producers were originally accused of exchanging sensitive commercial information, sharing markets and agreeing to lower the prices they paid to orange farmers between 1999 and 2006.
Under the terms of the settlement, which was originally signed in 2016, the companies agreed to pay 301 million reais and cease all unlawful anticompetitive practices.
They also promised to cooperate with CADE in future investigations and abandon all pending lawsuits challenging dawn raids that took place in 2006. That litigation had prevented CADE from concluding its 18-year investigation.
CADE confirmed that it had also dropped charges against Frutax Agricola, Montecitrus and 11 individuals due to a lack of evidence. Leniency applicant Paulo Ricardo Soares da Cunha Machado escaped charges after blowing the whistle on the cartel in 2006.
Independent orange juice growers originally filed a complaint in 1999 accusing the 10 companies and 22 individuals of conspiring to artificially decrease prices paid to farmers in the purchase of oranges for juice concentrate.
After Machado applied for leniency in 2006, the enforcer raided the juice producers, obtaining emails that detailed the alleged exchange of competitively sensitive information relating to orange purchase prices.
Although CADE did not assess the effects of the cartel, the trade growers association Associtrus has predicted that it caused orange growers to lose billions of reais and 20,000 of them to exit the market.
Many of the companies named in the suit no longer exist, or have merged with other companies.
The Brazilian Association of Citrus Exporters (Abecitrus) was replaced by CitrusBR to represent the citrus industry in the litigation. In 2004, Cargill was acquired by Citrosuco and Cutrale. Citrosuco and Citrovita merged into Fischer in 2012, and now dominate the Brazilian orange juice market alongside Cutrale and Louis Dreyfus.
The juice producers did not respond to requests for comment.
Counsel to Coinbra-Frutesp
Mattos Engelberg Advogados
Partners Ubiratan Mattos and Fernando Engelberg de Moraes in São Paulo are assisted by associate Andrea Astorga
Counsel to Montecitrus Group
Franceschini e Miranda – Advogados
Partner José Inacio Gonzaga Franceschini in São Paulo
