AGCO & Dealers Fined $36 Million Over 11-Year Farm Machinery Cartel in Poland

Key Takeaways

• Eleven-Year Cartel Restricted Competition: UOKiK found that AGCO and eight agricultural machinery dealers divided the Polish market and exchanged pricing information from 2012 to 2023.
• Farmers Were Steered Back to Local Dealers: Dealers coordinated when customers sought competing offers outside assigned territories, sometimes quoting higher prices or refusing to provide an offer.
• AGCO Played a Coordinating Role: According to UOKiK, AGCO monitored the territorial arrangement, intervened when dealers departed from it and used its discount policy to reinforce market allocation.
• Corporate Fines Reached Nearly $36.3 Million: AGCO received the largest penalty at approximately $22.2 million (PLN 82.71 million), while eight dealers were also fined.
• One Dealer Received a 50% Reduction: Agrotechnik cooperated under UOKiK’s leniency program and provided evidence on the market-sharing arrangement, resulting in its fine being cut in half. The decision remains subject to appeal.

Deep Dive

Poland’s Office of Competition and Consumer Protection has found that AGCO and eight agricultural machinery dealers spent 11 years dividing the Polish market and exchanging pricing information, an arrangement that restricted farmers’ ability to obtain competing offers for tractors, combine harvesters and, for some brands, spare parts.

The authority imposed nearly $36.6 million (PLN 136 million) in total penalties on the companies involved and individuals it said were responsible for the cartel. The corporate penalties account for roughly $36.3 million (PLN 134.98 million) of that amount.

AGCO received by far the largest company fine, approximately $22.2 million (PLN 82.71 million). Agrolmet was fined about $4.5 million (PLN 16.78 million), Agravis Technik Polska $3.3 million (PLN 12.29 million), Agrotechnik $2.8 million (PLN 10.44 million), Agronom $1 million (PLN 3.86 million), Euromasz $970,000 (PLN 3.61 million), Lukpol Agro $648,000 (PLN 2.41 million), Agrimar $530,000 (PLN 1.97 million) and Agro-Marek $244,000 (PLN 909,000). The decision is not final and can be appealed.

The arrangement began in 2012 with Valtra machinery and lasted until 2023, when UOKiK officials conducted searches. From 2018, it expanded to Fendt and Massey Ferguson. For Valtra and Fendt, the agreement also covered spare parts. AGCO introduced the three brands to the Polish market and served as their wholesale distributor. Its Valtra and Fendt dealers included Agrotechnik, Agronom, Agravis Technik Polska and Agrolmet. Massey Ferguson dealers involved in the case were Agro-Marek, Lukpol Agro, Agrimar and Euromasz.

What those companies created, according to UOKiK, was a map. Dealers were assigned parts of Poland and were expected to leave customers in those territories to one another. Selling machinery to a farmer outside a dealer’s allotted area generally required permission from both the dealer responsible for the territory and AGCO.

That alone would have constrained competition. What happened when farmers tried to escape those boundaries made the arrangement more effective. A dealer receiving an inquiry from outside its territory could contact the competitor assigned to that customer and exchange pricing information. The outside dealer would then quote a price higher than the local dealer’s offer. Sometimes it simply refused to quote.

The correspondence UOKiK obtained during its searches is unusually plain about what was happening.

“I quoted the customer some prices just to get him off my back,” one dealer wrote, adding that it had not offered any new tractors.

Another informed a competitor that a customer from its territory had asked about a tractor with a front loader. “We did not provide the customer with an offer.”

Then there was the message that dispensed with even that much subtlety: “Please do send a message to neighbouring dealers that this person may call them and ask them not to provide him with an offer.” A market does not need an explicit refusal to sell to stop functioning competitively. It is enough for the alternatives to become expensive, inconvenient or strangely unavailable.

When Dealers Strayed, AGCO Stepped In

AGCO’s place in the arrangement is one of the more significant parts of UOKiK’s case. The company was not simply the wholesaler whose dealers had independently decided to carve up Poland among themselves. According to the authority, competing dealers reported departures from the arrangement to AGCO, which intervened when the territorial boundaries were breached.

At first, those interventions largely took the form of written warnings. Later, UOKiK said, AGCO used its discount policy to enforce the divisions, including withdrawing discounts from dealers that attempted to sell machinery to farmers outside their designated territories. AGCO also referred customers among dealers, monitored their conduct and acted as an arbiter when disagreements arose.

One email from an AGCO employee to dealers captured the expectation directly. Dealers were reminded not to submit offers outside their designated territories without first consulting AGCO or the dealer responsible for the area. Customers calling from elsewhere, the employee wrote, were likely already being served by another dealer.

The message ended with an instruction that leaves little room for interpretation: dealers were asked “not to compete with one another, whether knowingly or inadvertently.” That role is reflected in the penalties. AGCO’s approximately $22.2 million (PLN 82.71 million) fine represents more than 60% of the corporate penalties imposed in the case.

Agrotechnik ultimately cooperated with the investigation through UOKiK’s leniency program and supplied evidence concerning the market-sharing arrangement. The company came forward only after the preliminary investigation had begun, by which point the authority had already gathered initial evidence of the cartel, so complete immunity was unavailable. UOKiK instead cut Agrotechnik’s fine by 50%.

Eleven years is a long time for an arrangement like this to operate. It is long enough for territorial rules to become routine, for competitors to know whom to call when the wrong customer appears and for a distorted market to begin looking perfectly ordinary to the people working inside it.

For the farmers paying for the machinery, the consequences were less abstract. They were buying expensive equipment in what appeared to be a competitive market, contacting different businesses and asking each to earn the sale. UOKiK’s case is that, behind those conversations, the companies had already spent years deciding when they would not.

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