Pipe firms suspected of price fixing in Hungary

Richard Higgs

Published: January 16, 2012 6:00 am ET

Related to this story

Topics Public Policy, Construction, Pipe/Profile/Tubing

BUDAPEST, HUNGARY (Jan. 16, 12:50 p.m. ET) — Three plastic pipe system manufacturers, two of them leading European players, are suspected of being part of a price fixing cartel operating in Hungary.

The activities of Pipelife Hungaria and Wavin Hungary, along with those of the national pipe fittings producer BTH Fitting, recently acquired by Belgium’s Tessenderlo group, are being investigated by Hungary’s Competition Authority, Gazdasági Versenyhivatal (GVH).

GVH officials, who launched the investigation on Dec. 16, have already carried out raids on the companies’ premises to gather evidence of the alleged infringements.

According to available evidence, the firms are said to have reached agreement in 2006 in Hungary aimed at restricting competition and fixing plastic pipe system prices among themselves. The companies also agreed not to enter each other’s regional markets, claimed the GVH in a statement.

“In order to uphold or to increase the average price-level, the undertakings under investigation allegedly carried out several price increases with aligned timing and for an agreed extent,” the authority alleged.

GVH said it presumed the agreed restriction also involved “certain wholesalers and several projects related to public procurement procedures” where the producers “supposedly agreed on the prices of the products and the tender in advance”. It described the firms involved as the “most significant” producers and distributors in the Hungarian pipes market.

The authority stressed it still has to clarify the facts in the case to prove the companies being investigated did infringe Hungary’s Competition Act. Under the law, the GVH has six months to conclude a case against the companies but the proceedings can be extended by a further year, depending on the complexity of the case.

A Wavin group spokesman confirmed its Hungarian subsidiary received an inspection visit from officials of the GVH and that the company is cooperating with the agency. Wavin will refrain from further comment during the investigation, the spokesman stated.

Vienna, Austria-based Pipelife International, in a brief comment on the investigation, said its Hungarian subsidiary, located in Debrecen, “is fully committed to cooperate actively with the competition authorities”, providing all information required.

The group said anti-competition practices “clearly violate Pipelife’s policies and guidelines and are subject to internal sanctions. Adding that it had an antitrust compliance program in place for several years Pipelife said: “Free and fair competition is a key factor to guarantee long-term success.”

BTH Fitting, with a plant in Vadna, Hungary, is part of BT Bautechnik GmbH. of Oberschleissheim near Munich, which is in the process of being acquired by chemicals, pipe and profiles group Tessenderlo. Wavin group of Zwolle in the Netherlands is currently in the throes of negotiations after a takeover bid from the Mexican pipe systems producer Mexichem.


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Pipe firms suspected of price fixing in Hungary

Richard Higgs

Published: January 16, 2012 6:00 am ET

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