BPI
CODE OF PRACTICE – COMPETITION LAW COMPLIANCE
1.
This Code of Practice sets out Group policy on compliance with Competition Law
which affects the way we do business. The principles set out in this Code form an
important aspect of Group policy on achieving good Corporate Governance.
2.
It is Group policy to ensure, as far as possible, that the practices of all businesses
within the Group are in compliance with relevant laws of all countries in which we
operate. This includes those laws which govern how we compete and interact with
competitors, suppliers and customers.
It is the responsibility of all Group
employees of BPI at all levels to ensure that this policy is observed. Ignorance of
the law is no defence.
3.
If, however, any inadvertent breach of Competition Law should occur, it is
imperative that you tell the Company Secretary as soon as practicable so that risks
to the Group may be minimised. In the first instance, you should telephone her to
discuss the issue.
Anyone who knowingly infringes the Group’s policy or
withholds information concerning any such infringement of which he or she is or
becomes aware will be the subject of disciplinary proceedings. Anyone who is
concerned that he or she is being or has been given an instruction by a more senior
member which may contravene Competition Law should report the matter to the
Company Secretary immediately. Again, in the first instance you should telephone
her to discuss the issue.
4.
A brief summary of how Competition Law is likely to be relevant to our business
areas is attached. This summary is not exhaustive and if you are or become aware
of any similar practices which raise concerns, you should contact the Company
Secretary by telephone immediately for clarification.
5.
Failure to comply with Competition Law can have very serious legal and financial
consequences for the Group and, in some countries, for employees.
In some
countries, it can involve criminal proceedings. This includes the UK and Ireland for
the most serious breaches of competition law.
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EU, UK and other Competition rules
1.
The Group is subject to European Union competition rules as well as competition
laws of the UK and other countries in which we do business. Essentially there are
two prohibitions:

A prohibition on anti-competitive agreements, arrangements and understandings
between competitors;

A prohibition on abuse of strong or dominant market positions.
What are the Competition Laws?
2.
The principal laws with which we are concerned are:

Articles 101 and 102 of the Treaty on the functioning of the European Union
enforced by the European Commission and, sometimes by national competition
authorities, such as the Competition and Markets Authority (CMA) ; and

The Competition Act 1998, which is enforced by the CMA, which began
operating fully on 1 April 2014. The CMA replaced the Office of Fair Trading
and Competition Commission and has greater powers than its predecessors to
enforce competition law in the UK.
3.
Under both EU and UK Law, arrangements between competitors that distort
competition in the market are unlawful. The abuse by a dominant business of its
power in the market is also unlawful. Similar rules apply in Belgium, Ireland,
Germany, the Netherlands, France and other jurisdictions.
Why Comply?
4.
Quite apart from the fact that it is Group policy to comply with all relevant laws,
there are other important reasons for complying with Competition Law:

Authorities such as the European Commission and the CMA can penalise
infringements and, in addition, the impact of any infringement could have
other serious consequences for the Group. Customers could sue to recover loss
they have suffered;

Infringing Competition Law may mean that the Group’s agreements are not as
secure as they should be.
For instance, if the need arose to enforce an
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agreement (because the other party had breached it) in a law court, the Group
might not be able to do so if the agreement infringed Competition Laws;

Competition authorities have far reaching powers of investigation. An
investigation by the European Commission or the CMA, even one which
concludes we are on the right side of the law, inevitably involves time,
expense, disruption and potentially adverse publicity for the Group;

Investigations by the CMA, in particular, can extend to the dwellings of
directors, managers and staff and lead to seizure and retention by the CMA of
books, documents and records.

The CMA has powers to request a wide range of information and to compel
relevant persons to answer questions. There are heavy penalties applicable to
individuals (as well as companies) for failure to comply with the CMA's
requests for information or interviews. In several jurisdictions, including the
UK, Ireland and the USA, breaches of competition law may lead to the
imposition of terms of imprisonment. The Enterprise Act 2002 provides that
an individual found guilty in the UK of certain anti-competitive activities is
liable to a maximum term of 5 years imprisonment and/or an unlimited fine.

From 1 April 2014, changes to the UK criminal cartel offence significantly
increased the risks for individuals who infringe competition law. The cartel
offence applies to the same activities as before, namely arrangements whereby
competitors fix prices, share markets, rig bids or limit output. The principal
change to the law is that the CMA now need not prove that the cartel
arrangement involved "dishonesty”. It is likely that more criminal cases will be
brought by the CMA against individuals as a result of the change and it will be
easier for the CMA to secure convictions.
What is Prohibited
5.
By bearing in mind the objectives of Competition Law, it is easier to understand
what behaviour is not acceptable. The objective is to ensure that purchasers have a
range of independent competing sellers who have not acted together to reduce the
degree to which they compete through artificial means. Likewise, a seller should be
faced with competing buyers who are not co-ordinating their purchasing.
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6.
Where a business significantly dominates a market such that the business can
operate without taking very much account of any impact on competitors and
customers, it must be careful not to damage competition by reason of its dominance
alone.
Agreements
7.
Agreements and practices which restrict or distort competition are prohibited.
Examples are:
Competitors agreeing, or reaching an understanding on, common pricing
structures, discounts, production volumes or other terms of supply. This would
include an arrangement where competitors agree on the basis on which they will
enter a competitive tender (bid-rigging);

Competitors agreeing to share markets or customers, such as agreements not to
compete in certain areas or in relation to certain products, not to bid for custom,
or agreements not to poach one another’s customers;

Exchanges of information between competitors, such as giving to or receiving
from competitors advance notice of price increases or providing them with
information on prices or terms of supply to individual customers or important
elements of their cost base. This is so even if the recipient of the information
has not actively solicited the information.

Arrangements which restrict buyers in one Member State from exporting to
another or which make discounts or other terms conditional on non-export
(except that distributors can be obliged in some circumstances to keep their
active efforts to one territory);

Imposing or supporting minimum resale prices or minimum margins on
purchasers, distributors or wholesalers. Purchasers should be free to set their
own pricing policy and to compete on price at their level of trade. It is lawful to
suggest a resale price but putting pressure on a customer with a view to
ensuring that the customer sells at that price, or no lower than a certain price, is
not permissible.
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8.
A formal agreement is not necessary for the rules to be breached.
Verbal
agreements are sufficient, as are informal understandings which do not involve
“agreements” as such.
9.
There can be an illegal arrangement even if, at a meeting or other contact with one
or more competitors, only one of the participants discloses pricing or other
commercially sensitive information. This is so even if the recipient of the
information has not actively solicited it. The law assumes that even the companies
which do not contribute any information will inevitably have their market behaviour
conditioned by the information they have obtained. The normal level of uncertainty
about competitors’ behaviour is reduced by the receipt of this information and that,
of itself, can distort the market. Therefore, if, for example, you receive a call from a
contact in a competing business who offers such information you should politely
terminate the call and report the matter to the Company Secretary, in the first
instance by telephoning her. Likewise, if a competitor asks you to contribute such
information, you should politely decline to do so and report the matter to the
Company Secretary. The same principle would also apply if a third party acts as a
conduit for the sharing of sensitive commercial information between competitors.
“Strong” Market Position
10.
The rules also prohibit the abuse of a “dominant” market position. If your business
is or may be affected by these rules, you will receive separate guidance.
Trade Associations
11.
Care must also be taken by those in contact with competitors as part of formal or
informal trade association meetings and similar organisations or occasions where
competitors meet. A legitimate meeting can, through no activity on your part, be
turned into an illegal meeting. If at any such meetings there is an attempt to discuss
prices or the terms on which competitors do business (including, for example, lead
times or the timing or extent of price increases), you should immediately
disassociate yourself from such discussions and, if necessary, leave the meeting and
report the matter to the Company Secretary. This applies even if you did not
actively solicit the information.
12.
Trade associations often compile industry statistics. As a general rule, provided this
is genuinely aggregated (and does not indicate the market positions of individual
companies) and sufficiently historic such that it is not possible to identify
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individualised data, the provision by the Group of data to an independent third party
and the receipt of the statistics does not contravene Competition Law. However, in
present circumstances, where BPI’s conduct is under close scrutiny, you should take
care to ensure that the information received is not being used to support other anticompetitive activity. If you have any concerns in this area, you should telephone
the Company Secretary immediately to discuss them.
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