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Pricing Probe in France Targets Four Major Manufacturers and Distributors

Sept. 14, 2018
Last week's Reuters report on an ongoing investigation into business practices in France at Schneider, Legrand, Sonepar and Rexel contains some disturbing allegations.

The Sept. 6 Reuters report that Legrand, Rexel, Sonepar and Schneider Electric are under investigation by French authorities “on suspicion of cartel pricing and corruption”  in France shocked many industry executives in the United States. According to the Reuters report, “Twelve searches were carried out at Legrand, Rexel, Sonepar and Schneider Electric as part of an investigation opened in June.” The report did not say that any of the alleged issues took place in the North American market.

 A report published in April on the investigative website Mediapart explores some of the issues in the Reuters article (translation required; Google Translator works fairly well). However, according to the following post at www.sonepar.com, Sonepar takes issue with this report and says that its "market practices are in compliance with competition law":

"Following the publication on the news website Mediapart of an article titled “Secret Deal Among French Electrical Equipment Makers and Distributors,” Sonepar wishes to state that the allegations contained in the article are untrue and distorted, and that the Company‘s market practices are in compliance with competition law.

The Company also wishes to stress that integrity and ethics are central to what it demands of its employees, collectively and individually, and that for several years now the Company has had rules and structures in place that are designed to prevent the risk of fraud in particular and to take action against any demonstrated violations.

Furthermore, Sonepar has filed suit against unnamed parties, given that the abovementioned article includes excerpts from an internal, confidential document, whose disclosure to third parties can be equated with theft or a breach of trust prejudicial to Sonepar."

 David Gordon offers some good early analysis of this developing story on www.electricaltrends.com, and Electrical Marketing and Electrical Wholesaling will be reporting on new developments as we learn about them.

Before we report further on this story, we want to make sure we understand the differences in legal pricing practices in North America, France and Europe.