The State Administration for Industry and Commerce (SAIC) today announced its penalty decision against Tetra Pak for abusing its market dominance. According to the investigation, the SAIC found that from 2009 to 2013, Tetra Pak held dominant positions in three markets in mainland China: liquid food paper-based aseptic packaging equipment (referred to as equipment), technical services for paper-based aseptic packaging equipment (referred to as technical services), and paper-based aseptic packaging materials (referred to as packaging materials). The SAIC determined that during 2009-2013, Tetra Pak, leveraging its dominant position in the equipment and technical services markets, tied the sale of packaging materials when providing equipment and technical services; leveraging its dominant position in the packaging materials market, it restricted raw paper suppliers from cooperating with its competitors and restricted their use of relevant technical information, thereby hindering raw paper suppliers from supplying raw paper to its competitors; and leveraging its dominant position in the packaging materials market, it implemented retroactive cumulative volume discounts and personalized purchase target discounts, which are loyalty discounts that exclude or restrict competition, impeding fair competition in the packaging materials market. SAIC Imposes a Fine of 660 Million Yuan The SAIC determined that Tetra Pak's actions violated the relevant provisions of the Anti-Monopoly Law of the People's Republic of China, constituting tying without justifiable reasons, restricting transactions without justifiable reasons, and other abuses of market dominance as stipulated in Article 17, Paragraph 1, Items (4), (5), and (7) of the Law. In accordance with the Anti-Monopoly Law, the SAIC ordered Tetra Pak to cease its illegal activities, including not tying packaging materials without justifiable reasons when providing equipment and technical services, not restricting packaging material raw paper suppliers from supplying coated white cardboard for liquid packaging to third parties without justifiable reasons, and not formulating or implementing loyalty discounts that exclude or restrict competition in the packaging materials market. A fine of 667,724,176.88 yuan was imposed. It is understood that Tetra Pak, founded in Sweden in 1951, is a large multinational group that provides liquid food packaging equipment, technical services, packaging materials, and production line design solutions for liquid food manufacturers worldwide. In response, Mr. Yin Changxun, President of Tetra Pak Greater China, told Sina Finance that although the company regrets the outcome, Tetra Pak accepts the SAIC's penalty decision and has decided not to appeal. Source: Sina Finance