Food suppliers to Ministry of Internal Affairs caught on cartel collusion

Food suppliers to Ministry of Internal Affairs caught on cartel collusion
Maxim Ovchinnikov, Deputy Head of the Federal Antimonopoly Service, stated that unfortunately, cartels at auctions remain very common practice

Five companies proved to have been imitating competitive bidding not allowing prices to drop.

The Federal Antimonopoly Service of Russia (FAS) has revealed another conspiracy at an auction on state defense order.

The agency found that five companies had been coordinating their actions to keep the prices at a maximum by applying for food supply auctions for the Central District Administration of MIA equipment and material procurement. The companies are: TsentrHlebSoyuz, BaltProdukt, Nota, Dars and Agroholding Podmoskoviye. Said firms sought to prevent price declines in bidding through imitation of competition between November 2014 and February 2015.

The companies are going to be fined and prosecuted in both administrative and criminal cases. FAS passed the inspection findings to law enforcement agencies for the initiation of a case under Art. 178 of the Criminal Code (Exclusion, Restriction or Elimination of Competition).

Maxim Ovchinnikov, Deputy Head of the Federal Antimonopoly Service, stated that unfortunately, cartels at auctions remain very common practice that comes at a high cost for the budget and citizens of Russia."

In 2016, the antimonopoly service identified an enormous cartel with more than 90 companies involved. They were large enterprises supplying clothing products for the Ministry of Internal Affairs. Subsequently, the companies were fined 600 million rubles ($10m), while it was 3.5 billion rubles ($58m) they got in the collusion.

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