Pressure on bakeries is growing Price war over bread calls the competition authorities into action
The drop in the price of 99-centime bread is causing unrest in the Swiss bread market. Now the Swiss Fair Markets Association is getting involved and calling on the competition authorities.
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- An association for "fair markets" is calling on the Competition Commission to investigate possible price fixing in the bread sector.
- According to the association, Migros, Coop and Denner control large parts of the value chain and put pressure on smaller bakeries.
- The organization warns that the ruinous price war is also endangering domestic grain prices.
The Swiss Fair Markets Association (FMS) has applied to the Competition Commission (ComCo) for an investigation into pricing in the bread market.
The reason for this is the recent price reduction by Aldi Suisse, which offers a 500 gram loaf for 99 centimes. Shortly afterwards, Migros and Coop followed suit. In the view of FMS, this indicates a "structural market failure" and possible breaches of competition.
According to the association, Migros, Coop and Denner together control around 80 percent of the Swiss food market. Thanks to their own mills and bakeries, they control large parts of the value chain. Simultaneous price adjustments create cartel-like structures that systematically put smaller businesses at a disadvantage.
Migros and Coop are "abusing market power"
FMS is calling on the Competition Commission to investigate price and volume agreements in the cereals, milling and bakery products markets as part of a sector inquiry. The price trend shows that the dominant retailers are abusing their market power and undermining functioning pricing.
Who or what is "Fair Markets Switzerland"?
- The Swiss Fair Markets Association sees itself as an independent non-governmental organization that campaigns against the abuse of market power and for fair trading conditions.
- Its president is market and competition expert Stefan Flückiger, formerly Co-Managing Director of Swiss Animal Protection.
- The association is made up of experts from the fields of business, agriculture, the environment and law. It is financed by foundations and private contributions.
At the same time, the association warns against a further narrowing of the market. The current revision of the Cartel Act threatens to weaken the rules on relative market power. FMS takes a positive view of the proposal by Hans Jörg Rüegsegger, a member of the Bernese SVP National Council, who wants to create an instrument for sector investigations.
The association sees an urgent need for action to protect medium-sized bakeries and domestic producers from sustained price pressure.
