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Regulators in Brussels have fined Pierre Cardin and its former largest licensee Ahlers a total of €5.7mn for breaking the EU’s antitrust rules by curbing cross-border sales of Pierre Cardin-branded clothing.
The European Commission found that the French fashion house and Ahlers entered into “anti-competitive” deals between 2008 and 2021 and carried out “concerted practices” to protect Ahlers from rivals in the European Economic Area, which comprises the EU and three other countries.
In particular, Brussels said it found that the actions were aimed at ensuring “Ahlers’ absolute territorial protection in the countries covered by its licensing agreements”.
“Today, we have fined Pierre Cardin and its licensee Ahlers for restricting cross-border trade in clothing, in breach of competition rules,” said Margrethe Vestager, the EU’s executive vice-president in charge of competition policy.
“This behaviour illegally fragmented our single market. It prevented consumers from shopping around for a better deal and from benefiting from greater choice.”
Pierre Cardin said it “is studying possible avenues of appeal” and that the “dispute arose from old practices”.
It added: “Since then, the licensing contracts proposed by the Pierre Cardin Group have been modified and the Commission has not raised any objection as to their full compliance with the competition rules of the European Union. The Alhers Group is no longer one of the licensees of the Pierre Cardin Group.” Ahlers did not immediately respond to a request for comment.
It is the latest in a series of cases against brands selling items at different prices in different member states, despite the single market in goods among the 27 countries. This year, Brussels fined US confectionery giant Mondelēz for restricting sales of its products between EU member states.
Retailers have long complained about so-called territorial supply constraints under which a supermarket in, say the Netherlands, has to buy branded goods such as chocolate from a supplier based in the country when it is cheaper to buy in Germany, which has a bigger market. EuroCommerce, the industry body, says big brands restrict supply if they do not sign contracts forcing them to buy domestically.
The practice costs shoppers about €14bn annually, according to a 2020 study by the Commission.
Dutch economy minister Dirk Beljaarts told the Financial Times that he and a group of other countries were pushing the commission to legislate to forbid the practice.
“It is an eyesore for many consumers. They really do not understand why . . . pharmaceutical products are incredibly cheap in Germany and one metre over the Dutch border they are 30-40 per cent more. So I’m pushing that agenda on the EU.” Ministers discussed the issue at a meeting in Brussels on Thursday. “It’s accelerating,” he added.
In May trade commissioner Valdis Dombrovskis promised to tackle these “non-regulatory barriers”.
“They prevent the single market from working properly and act to the detriment of consumers,” he said. The bloc has pledged to improve the working of the single market of 450mn people after reports by former Italian prime ministers Mario Draghi and Enrico Letta saying to do so was essential to boost its economy.
