Investigators for the European Commission raided the offices of 20 European chemical producers Nov. 14, probing alleged cartel activities and price fixing on plastics-related chemicals. A spokesman for the commission, the governing body of the 15-member nation European Union, confirmed that investigators were assessing data collected in the raids.
Published reports quoted one senior commission official as saying the probe involved possible ``restrictive practices'' on the European market for chemicals used in ``lightweight plastics,'' such as polyethylene and polypropylene in nine of the EU's 15-member states.
The investigation involves a number of large multinational chemical producers, including BASF AG, Hoechst AG, and Royal Dutch/Shell Group, and Borealis NV. The four companies confirmed raids on their offices. The raids were made on companies in Austria, Belgium, Britain, Denmark, France, Germany, Italy, the Netherlands and Spain.
A source at Borealis, the chemical giant headquartered in Lyngby, Denmark, said the commission investigators indicated indirectly that they were examining data on olefin and polyolefin production and pricing in the European market. It was unclear whether the probe extended to worldwide or U.S. sales or production.
``The information we have obtained indirectly is that the investigation focuses on the European market, but that is not confirmed,'' the spokesman said.
Nancy Russotto, director general of the Association of Plastics Manufacturers in Europe, declined comment, because the organization focuses more on policy with regard to the EU, than on specific pricing or production issues. APME, based in Brussels, Belgium, is a trade association representing European chemical and plastics firms.
``The commission has the right to investigate any complaints about companies within the Union-member states,'' said the commission spokeswoman, who spoke on condition of anonymity.
BASF officials called the suspicions unfounded. Hoechst officials said they had not been given reasons for the investigations, and Shell spokesmen said the company was cooperating but declined further comment. A spokesman for Montell North America, a division of Montell Polyolefins, based in Hoofddorp, the Netherlands, said that the firm also was cooperating but that it was not known whether any actions outside of Europe were involved.
The commission has aimed probes at the continent's chemical producers before. In 1989, the EC levied $47.9 million in fines against 17 firms, including BASF and Hoechst, for allegedly acting as a PE cartel. In 1988, the commission fined makers of PVC 23.5 million European currency units (US$30.3 million), but the fines were later dropped by EU courts on procedural grounds.