Noticias

The Chilean National Economic Prosecutor’s Office (FNE) reached an out-of-court settlement with Manfred Paulmann, Cencosud, and Asesorías Alpa, aimed at ending an investigation into a violation of the prohibition against horizontal interlocking directorates. The settlement has now been submitted to the Competition Tribunal (TDLC) for approval.

Since 2016, the Chilean Competition Act (DL No. 211, Article 3d) prohibits the simultaneous participation of a person in roles as a director or relevant executive in two or more competing companies, provided their annual sales exceed certain thresholds.

In the signed settlement, Manfred Paulmann, Cencosud, and Asesorías Alpa acknowledge Paulmann’s simultaneous role as a director at Cencosud and a relevant executive at Asesorías Alpa from July 2021 onward. They also admit that he held the position of director at ARS, a subsidiary of Asesorías Alpa, simultaneously with his role at Cencosud from July 2021 to May 2022.

According to the out-of-court settlement, Cencosud and Asesorías Alpa have been active in the retail market through convenience stores, service station shops, and other neighborhood stores. Cencosud operates under its Spid brand, while Asesorías Alpa, along with its subsidiary ARS, operates under the brands Breti (acquired by Cencosud in August 2023) and Maxi K, which continues to operate.

The settlement requires the businessman and the investigated companies to pay fines totaling CLP 1.2 billion (approximately USD 1.28 million). Of this sum, Paulmann will contribute CLP 50 million, Asesorías Alpa CLP 280 million, and Cencosud CLP 870 million. They are also required to terminate the interlock and implement several measures aimed at safeguarding competition in the market.

The investigation that identified the interlocking was initiated ex officio by the FNE’s Compliance Enforcement Division in September 2023, based on evidence gathered during the analysis of the merger by which Cencosud acquired ARS assets.

This settlement marks a new milestone in the FNE’s efforts to detect and address harmful interlocking directorates. Compliance with the legal prohibition on certain interlocking directorates is key, given its role in preventing the risks of information flow between competitors, coordinated practices, and collusive agreements. “Companies must understand the fundamental importance of the prohibition on interlocking and strictly comply with it. We will continue to actively monitor compliance to ensure intense competition among firms”, stated the National Economic Prosecutor, Jorge Grunberg.

Previously, in 2021, the FNE charged Hernán Büchi, Banco de Chile, Consorcio, and Falabella, as well as Juan Hurtado Vicuña, Consorcio, and LarrainVial, for similar conduct. The out-of-court agreement reached with Paulmann, Asesorías Alpa, and Cencosud is consistent with the FNE’s position in these two cases, which are currently being processed by the TDLC.