EU fines urethane foam makers for price fixing

RUBBER & PLASTICS NEWS
URETHANES TECHNOLOGY INTERNATIONAL

Published: January 30, 2014 10:04 am ET
Updated: January 30, 2014 10:09 am ET

Related to this story

Topics Europe, Automotive, Furniture, Polyurethane

BRUSSELS—The European Union Commission has fined Recticel SA, Carpenter Co., Greiner Holding AG and Eurofoam Group around $155 million for their part in a foam cartel.

Grand Cayman-based Vita Group, which alerted the commission, escaped a fine.

Carpenter of Richmond, Va., was fined $102 million for its part in the cartel. The commission said it was Carpenter's Europeans subsidiaries that were involved in the cartel, and that the U.S. firm was held liable only on the basis of being the parent company.

According to the 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 United Kingdom, between 2005 and 2010.

"Cartels harm our entire economy and cannot be tolerated," said Joaquin Almunia, the commission's vice president in charge of competition policy. "This case illustrates how essential it is to keep fighting and sanctioning such illegal behavior."

Vita escaped a fine on the basis that the company revealed the existence of the cartel to EU officials. Brussels-based Recticel, Greiner of Kremsmünster, Austria, and Vienna-based Eurofoam—a joint venture between Recticel and Greiner—each received a 50 percent reduction on the fine under the commission's lenience program after cooperating during the investigation.

Recticel was fined $10.1 million for its own its involvement. In addition, the Eurofoam joint venture between Recticel and Greiner was fined more than $43 million.

Recticel has yet to 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.

Austria's Greiner was fined $33 million.

In December, Recticel's external communications and investor relations manager, Michel De Smedt, said the company already was bracing itself for 2014 to be a "tough trading year."

Between 2011 and 2012, year-on-year sales fell 4.3 percent to $1.8 billion.

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 cartel members also shared their contacts, the commission said in a news release.

"Recticel and Eurofoam decided to cooperate with the commission under its leniency program and have continued that through to the present day," Recital said in a statement. "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."

The firms manufacture flexible polyurethane foam, the majority of which is used in mattresses or sofas. Car seats account for about 25 percent of the total flexible foam market.

The companies have the right to appeal the decision.


Comments

EU fines urethane foam makers for price fixing

RUBBER & PLASTICS NEWS
URETHANES TECHNOLOGY INTERNATIONAL

Published: January 30, 2014 10:04 am ET
Updated: January 30, 2014 10:09 am ET

Post Your Comments


Back to story


More stories

Image

Smartphone work adds 52 percent to sales for China's Eva Precision

September 18, 2014 4:37 pm ET

Growth in supplying the smartphone and automotive industries helped Chinese processor Eva Precision Holdings Ltd. push injection molding sales up 52...    More

Image

PET to PET boosts recycling capacity

September 18, 2014 11:14 am ET

PET to PET Recycling Austria GmbH, a bottle-to-bottle PET recycling operation backed by Coca-Cola Hellenic Bottling and several beverage...    More

Image

Cascade Engineering founder Keller to step down as CEO

September 16, 2014 8:33 pm ET

Cascade Engineering Inc. is undergoing a transition as President Mark Miller will also add the role of CEO, replacing founder Fred Keller, who has...    More

Image

Canadian, Mexican injection molders form auto supply joint venture

September 16, 2014 2:26 pm ET

A new automotive parts manufacturer will open in Querétaro, Mexico, through a joint venture between Canadian automotive supplier Papp Plastics and...    More

Image

Latvian plastics recycler Nordic Plast boosts capacity

September 16, 2014 10:15 am ET

Latvian plastics waste recycler Nordic Plast Ltd. has invested more than 2.5 million euros ($3.2 million) to expand capacity and modernize production ...    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events