Saudi flour giant First Mills fined SAR 10M for barring its distributor from rivals

First Mills was created in 2020, when Saudi Arabia split the state flour-milling monopoly of the Grain Silos and Flour Mills Organization into privatized operating companies; it produces flour, animal feed and bran and inherited a dominant position in its market. In June 2023 the General Authority for Competition announced that its board had opened an investigation on initial indicators that a dominant establishment was violating the Competition Law by requiring a distributor to refrain from dealing with competing mills.

After gathering evidence, the authority referred the case to its Committee for the Resolution of Competition Law Violations, which found First Mills had breached Article 6(6) of the Competition Law — Royal Decree M/75 of 1440H — which expressly prohibits a dominant establishment from requiring another undertaking to refrain from dealing with a competitor. The committee fined the company SAR 10 million and ordered it to publish the decision at its own expense.

First Mills challenged the decision, but the Riyadh Administrative Appeals Court rejected the challenge in case 5961 of 1444H, making the fine final. The authority announced the outcome on 14 June 2023; eight days later, on 22 June 2023, First Mills' shares began trading on the Saudi main market after its IPO, so the first weeks of its life as a listed company ran under a published competition conviction.

SAR 10 million fine plus publication of the decision at the company's own expense; its appeal was dismissed by the Riyadh Administrative Appeals Court

The company inherited dominance with its assets: the privatized successor to the state mill held market power from day one, without the compliance function a private incumbent builds.

Article 6(6) bans exactly what was done: a dominant firm conditioning distribution on not handling rivals' products. The exclusivity requirement was textbook abuse, not a gray area.

The conviction was already final when announced, because the administrative appeals court had dismissed the challenge, leaving no room to litigate the fine away before the IPO window.

The sanction paired money with mandatory self-funded publication, so the reputational cost reached investors and distributors just as the company courted public shareholders.

Privatization transfers assets, not habits: the successor to a state monopoly is dominant from day one, and exclusivity clauses that felt routine become abuse of dominance.

The SAR 10 million fine stands with the appeal dismissed in case 5961 of 1444H, and First Mills published the decision at its own expense as ordered. The listing proceeded on schedule, with trading on the Saudi main market starting 22 June 2023. The General Authority for Competition used the announcement to remind all establishments of the compliance guide on its website, framing the case as a warning about exclusivity impositions by dominant firms.