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Plastic additive companies facing multi-million Euro fines

Plastic additive firms face €173m price fixing fine

Dozens of companies that produce plastic additives for food, beverage and cosmetic packaging have been fined more than €173m for their part in price fixing and market sharing cartels over a 13-year period.

The European Commission (EC) announced 24 four firms from 10 different undertakings that make heat stabilisers and plasticisers for packaging for the food, drinks and cosmetics industries have been hit with fines totalling €173.86m for rigging the European market for these plastic additives between 1987-2000.

The companies involved in the criminal activity were Akzo, Baerlocher, Ciba, Elementis, Elf Aquitaine (Arkema France), GEA, Chemson, Faci, Reagens and AC Treuhand.

During this period, the companies “fixed prices, shared customers, allocated markets and exchanged sensitive commercial information for tin stabilisers (1987-2000) and ESBO/esters (1991-2000) heat stabilisers in the European Economic Area (EEA)”, said a statement from the EC. Heat stabilisers are added to PVC products in order to improve their thermal resistance and are used in packaging, food packaging, credit cards, bottles, coatings, flooring, artificial leather, plastic wallpaper and other everyday plastic products. The combined markets for tin stabilisers and ESBO/esters in the EEA were worth around €121 million at the time of the infringement. Fines Swiss-based Ciba, owned by BASF, was hit hardest with financial penalties totalling €68.4m, while Dutch giant Akzo faces fines of €40.6m. Elf Aquitaine, of France, was ordered to pay €28.6m and the joint GB-US group Elementis €32.5m.

US-based Chemtura Corporation, which took part in the price rigging, escaped any punishment after turning whistleblower to the EC. But Arkema France’s fine was increased by 90 per cent as it had previously taken part in similar cartels. Competition Commissioner Neelie Kroes said: “These companies must learn the hard way that breaking the law does not pay and that repeat offenders will face stiffer penalties. The companies’ elaborate precautions to cover their tracks did not prevent the Commission from revealing the full extent of their determined efforts to rip-off their customers”.

BASF declared it would appeal against the Ciba fine, based on a statute of limitations clause. It said Ciba had sold the company involved in price fixing a decade ago. Elementis also said it would appeal, while Akzo said it would review its position. Cartels Between 1987 and 2000, Akzo, Baerlocher, Ciba, Elementis, Elf Aquitaine, Chemtura, Reagens and AC Treuhand (for various periods) participated in an EEA-wide tin stabiliser cartel. Between 1991 and 2000, Akzo, Ciba, Elementis, Elf Aquitaine, GEA, Chemson Chemtura, Faci and AC Treuhand (for various periods) operated an EEA-wide ESBO/ester cartel. For both products, the companies fixed prices, shared customers, allocated markets and exchanged commercially sensitive information.

The EC, which launched its probe in 2003 with a series of raids, said the main decisions for both cartels were taken at summits organised by AC Treuhard. The company allowed the groups to use its Zurich headquarters to map out the illegal scheme at monthly meetings for tin stabilisers and quarterly ones for ESBO/esters. Other meetings to fill in details of the scam on prices, customer allocation and markets were held throughout Europe, said the EC. Damages Anybody affected by the anti-competitive behaviour could bring legal action before national courts of the EEA to seek damages, said the EC.

It added: “The case law of the European Courts and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision is binding proof that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without these being reduced on account of the Commission fine.”

Source: Food Quality News

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