Cigarette manufacturers are hit with a 57-million euro fine in Spain

The CNMC (Comisión Nacional de los Mercados y la Competencia), which is the Spanish National Fraud Authority, has just hit Logista and a number of cigarette brands with a hefty fine. With this in mind, Logista  will be paying 20.9 million Euros, Philip Morris Spain 15.2 million, Altadis 11.4 million, and JTI Ibéria 10 million.

The sanctions were given by the CNMC due to the fraudulent nature of the commercial data exchange system between Logista and its manufacturers. In their opinion, the system is anti-competitive, giving all parties involved a free, up-to-date overview of tobacco sales and revenues for all manufacturers locked into a distribution contract with Logista. Of course, Logista was quick to make a statement.

And unsurprisingly, they will be appealing the decision

Logista published a communication stating that the information being shared had no effect on competitiveness in the industry. They also appealed on the basis that the CNMC had no evidence to support their claim. Finally, the statement indicated that they acknowledged that their methods could be considered an infraction.

The investigation that led to the fines was launched by the CNMC in June 2017. It concerned Philip Morris, Altadis, JTI and BAT as well as Logista, and focused on “price fixing”. Keep in mind that these four manufacturers represent no less than 96% of the Spanish tobacco market. The CNMC decided to hit hard, with fine as high as 20 million euros, a hopefully dissuasive amount that could shake things up. An interesting case, to say the least, which could have far-reaching consequences.