Sunday, May 9, 2021

Colombia’s ‘sugar cartel’ fined for blocking foreign competition

Colombia Reports

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Colombia’s sugar companies have been ordered $113 million in fines for conspiring to block imports of the product from Bolivia, Guatemala, El Salvador and Costa Rica.

The fines represent the highest ever imposed on a group of companies and individuals from any sector of the national economy.

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According to the Superintendency of Industry and Commerce (SIC), the fines apply to companies Asocaña (Association of Sugarcane Growers of Colombia), Ciamsa, Disca and others, as well as twelve sugar mills. The extensive and industry-wide investigation revealed calculated efforts by the sugar industry to obstruct imports of sugar from other countries into Colombia, particularly from Bolivia, Guatemala, El Salvador and Costa Rica.

The decision also applies to fourteen executives in the sugar sector, stated to have worked, facilitated, authorized, executed or tolerated anti-competitive conduct. Ultimately, the filings claim that the industry has engaged in illegal cartelization. Cartelization is the formation of cartels, or agreements between competing firms to control prices or exclude entry of a new competitor in a market.

The sanctions total $113 million and primarily hit the companies Riopaila Castilla SA, Ingenio del Cauca SA, Manuelita SA, and Asocaña. Still, according to SIC, the fines imposed on the mills do not exceed seven percent of total operating income nor seven percent of assets.

The sugar industry has lashed back at the claims. Speaking on behalf on Asocaña, Pablo Caceres, guild lawyer and the organization’s president, Luis Fernando Londoño, insisted that the sanctions are “openly illegal” and based “on facts not contained in the investigation.”

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“We have been violated due process, the right to legitimate defense, and an attack has been made on our good name,” said a representative from Riopaila-Castilla.

The investigation began after complaints filed in 2010 by several entrepreneurs and sugars and consumers brought light to the situation. After some initial inquiry, the Delegation for the Protection of Competition filed charges for alleged business cartelization by Asocaña, Ciamsa, Disca and the twelve mills on February 13, 2012.

While the total of the sanctions is the largest ever imposed, it by no means marks the first time large fines have been made across Colombia’s economy. Between 2012 and 2015, the SIC issued a total of 950,000 million pesos in charges.

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