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

Europe recycled equivalent of 65 billion PET bottles in 2013

September 2, 2014 10:38 am ET

New figures from Petcore Europe said the equivalent of around 65 billion bottles — 1.64 million metric tons — was recycled in the region...    More

Image

EcoCortec develops marine degradeable film to help reduce debris

September 2, 2014 9:55 am ET

Croatian specialist packaging producer EcoCortec has developed marine biodegradable film products designed to combat the scourge of plastics...    More

Image

Optical disc molder OEM getting into micromolding with acquisition of CDA

August 29, 2014 11:24 am ET

Optical disc replicator and molder Optical Experts Manufacturing Inc. of Charlotte, N.C., has expanded its core business and entered new high...    More

Polish injection molder Teknorubber up for sale

August 29, 2014 9:14 am ET

Polish plastic parts maker Teknorubber has been put up for sale following its insolvency filing in March 2014. The company is to be auctioned through ...    More

Image

Concours adding equipment as mold making business booms in Mexico

August 28, 2014 2:05 pm ET

Concours Mold Inc. is heading for a 50 percent increase in sales in Mexico this year after a $4 million upgrade of its plant in Huejotzingo, in the st...    More

Market Reports

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

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

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

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

More Events