Edeka could face penalties for selling under cost

The German Federal Cartel Office (FCO) accuses Netto, an Edeka subsidiary, of selling milk products between December 2006 and February of this year up to 40% under their cost price. According to the FCO's Act against Restraints of Competition (ARC) offering "goods or commercial services not merely occasionally below its cost price" is a violation of the act. As the offense did not only occur "occasionally" it is possible that small and middle competitors were obstructed. High penalties could be imposed.

An Edeka spokeswoman admitted that some products were sold under the debut price, but explained that the cost of some products changed after their market introduction. Should the commission rule against Edeka, this would mean no products could ever be sold under their debut price.  With regard to the determination of the alliance anti-trust commission, Edeka said it was not taking any action at this time, but would wait for the commission's decision.