Brussels -- The European Commission has fined Recticel, Carpenter, Greiner and Eurofoam a total of EURO114m ($155m) for their part in a foam cartel. Vita, which alerted the Commission, escaped a fine.
US-based Carpenter was fined $75m for its part in the cartel.
According to the EU Commission, the companies – along with Vita – colluded to fix the price of various types of foam in 10 EU member states - Austria, Belgium, Estonia, France, Germany, Hungary, the Netherlands, Poland, Romania and the UK - between 2005 and 2010.
The Commission’s vice president in charge of competition policy Joaquin Almunia, said: "Cartels harm our entire economy and cannot be tolerated. This case illustrates how essential it is to keep fighting and sanctioning such illegal behaviour.”
Vita escaped a fine on the basis that the company revealed the existence of the cartel to EU officials. Recticel, Greiner and Eurofoam - a joint venture between the former two companies – each received reduced fine under the Commission’s lenience programme after cooperating during the investigation.
Recticel – which has a liability of almost EURO27m – has yet release its financial figures for 2013, in which the impact of the fine will be reflected. The companies have 90 days to pay, but the Commission said Recticel will request to pay the fine over several years.
In December, Recticel’s external communications and investor relations manager Michel De Smedt, said the company was already bracing itself for 2014 to be a “tough trading year.”
Between 2011 and 2012, year-on-year sales fell 4.3 percent to EURO1.32bn.
According to the Commission, the cartel passed on raw material price increases to customers in order to avoid aggressive price competition between the four producers. Price coordination meetings took place at all levels of European management and players in the cartel would meet on the margins of European and national associations. The cartelists also shared their contacts, said the Commission press release.
A press release posted to Recticel’s website stated: “Recticel and Eurofoam decided to cooperate with the Commission under its Leniency Program and have continued that through to the present day.
“When the Commission offered the option of settlement, Recticel and Eurofoam decided to pursue the settlement process in order to accelerate resolution of the matter.
“Recticel’s fine accordingly reflects discounts for cooperation,” it said.
|European Commission PU foam cartel settlement|
|Recticel (own participation)||50||10||7.4|
|Eurofoam, Recticel, Greiner||50||10||14.8|
|Greiner and Recticel||50||10||9.4|
Eurofoam said in a statement:
"The EU Commission issued a fine against all notable polyurethane foam manufacturers in Europe, including the Eurofoam Group, a joint venture company belonging to the Greiner Holding AG and Recticel SA.
"The EU Commission has imposed a fine of EURO 14.8 m on Eurofoam GmbH.
"The fine has been imposed as a result of contacts between foam manufacturers which were judged to be a violation of European competition law.
"For this reason, the EU Commission has imposed a total fine of EURO 114 m on the companies involved.
"During the settlement procedure, Eurofoam declared that it was prepared to acknowledge responsibility for the practices alleged by the EU Commission in return for a reduction of the fine.
"Eurofoam cooperated with the authorities from the beginning of the investigations and has assisted in clarifying the situation.
"Immediately after initiation of the proceedings the Eurofoam Group introduced a comprehensive Compliance System.