Bike makers fined for illegal price rise

22 April 2004

AMSTERDAM — Dutch competition watchdog NMa has fined three large Dutch bicycle manufacturers millions of euros for entering into an illegal price agreement, but the companies have vowed to fight the accusations.

The NMa singled out companies Accell, Gazelle en Giant, who together account for 70 to 80 percent of the Dutch domestic bicycle market, news agency ANP reported on Thursday.

Gazelle was fined EUR 12.9 million, Accell — which makes brand name bikes such as Batavus — was fined EUR 12.8 million and Giant was forced to pay a fine of almost EUR 4 million.

According to the NMa, the three companies entered into an illegal agreement to raise the recommended price of bikes in the 2001 season – September 2000 to September 2001.

It alleged that the manufacturers met twice in the summer of 2000 to discuss the recommended price and reduce discounts at bicycle shops.

The NMa started its investigation after being tipped-off about possible illegal practices in the bicycle industry and media reports that bike prices in the autumn of 2000 would be sharply increased.

But Accell has dismissed the accusations as unjust, claiming the fine is “out of all proportion”. It has lodged an official objection with the NMa.

Accell admits the passing on of rising costs — an observation of market developments — was talked about at a meeting in Zwolle mentioned by the NMa. That meeting was held in June 2000.

But bicycle manufacturers often use the same parts which are produced in the same countries. When the dollar or yen exchange rate changes, the price of bikes in the Netherlands is thus also affected.

“The price rises are thus not an agreement, but the logic consequence of developments,” Accell director Rene Takens said.

Accell also claims that the second meeting — which the NMa claims took place in August 2000 — never occurred.

Meanwhile, both Giant and Gazelle also claim that the fines are “ridiculous”. Gazelle director Klaas Dantuma labelled the situation as a scandalous state of affairs.

“The NMa is basing the fine on suspicions and does not come with hard evidence,” he said.

Gazelle and Giant warned they would do everything possible to reverse the NMa’s ruling. Accell has also warned of legal action.

Subject: Dutch news