Finance

Cafés and restaurants have been scammed for years by frying fat cartel

Together, the three companies – Rotie, Nieuwcom and UCO Kampen – controlled approximately 80 percent of the entire Dutch UCO market. UCO stands for used cooked oil, which is what this whole story revolves around.

Ingredient biofuel

Collecting this stuff from cafes, snack bars, restaurants and food manufacturers generates money. The companies that do this can resell the used cooking oil to biofuel makers. The collection companies have little influence on the prices they receive from biofuel manufacturers.

In order to earn more money, agreements were made to lower the rates charged by the companies themselves to collect the fat, or at least not to allow them to rise any further. The market was also divided by mutual agreement.

Distribute pick-up addresses

For example, it was agreed that drivers from one company were not allowed to collect the used frying fat at addresses of the other company. If a driver tried to win a new address as a customer, he first had to ask which company had collected the frying fat up to that point.

Suppose the other company already had a deal there, then the hijacker on the coast was asked to withdraw the offer. The café or restaurant was then the victim of this, because the first company usually offered less money to collect the used fat.

With Rotie as the pivot between the three companies, agreements were made for years in two separate cartels about the maximum prices for the old frying fat.

Agreements about prices

Sometimes the companies even lent each other a hand. In that case, Rotie, for example, made a lower offer at a restaurant that already had an appointment with Nieuwcom. In this way the illusion was created in the restaurant that they really had the best deal, while the purchase price was lower than if there had really been competition.

If this did happen because Nieuwcom made a higher offer, Rotie immediately requested that the offer be withdrawn. Or Rotie asked Nieuwcom to make a new, lower offer. In this way, the restaurant was driven back into Rotie’s arms.

Large market share

According to the ACM, this amounts to harming competition, certainly because the three parties controlled a large part of the market. The companies have also admitted this, according to the fine decision.

The highest fine of more than 2 million euros is for Rotie, a company that now consists of four separate BVs. This company had the biggest role in the deception, because it made agreements with both other companies. With UCO Kampen it concerned the period 2011 to the end of 2016, with Nieuwcom Rotie had agreements from November 2012 to the end of 2018.

The company Nieuwcom will be fined more than 1.5 million. UCO Kampen will not be fined because it went bankrupt in 2019.

Discount on the fine

Initially, ACM wanted to impose higher fines, of 1.7 million on Nieuwcom and almost 9 million on Rotie. These fines are based on what has been earned in all those years with the collection of consumed fat and increased by 10 percent to compensate for the prices that were paid too low.

The fact that the fine for Rotie is much lower is because the ACM is allowed to impose a maximum of 10 percent of a company’s turnover in fines. And in the case of Rotie, that’s 2.3 million.

In addition, ACM has reduced the fines because of the ‘special cooperation’ that the companies gave, which means that the cases can be handled easily.

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