European Union levies $129 million antitrust fine on food packaging firms
The European Commission fined eight manufacturers and two distributors of retail food packaging trays for their participation in cartels.
The European Commission has fined eight manufacturers and two distributors of retail food packaging trays €115 million, roughly US $129 million, for participating in at least one of five separate cartels, the European Union announced Tuesday.
Manufacturers Huhtamäki, Nespak, Vitembal, Silver Plastics, Coopbox, Magic Pack, Sirap-Gema and Linpac as well as distributors Ovarpack and Propack, were fined for fixing prices and allocating customers of polystyrene foam or polypropylene rigid trays. The trays and foams are used for packaging products such as meat, fish, cake and cheese sold in shops or grocery stores.
“Millions of consumers buying food for themselves and their families have potentially been hit by these cartels,” says Margrethe Vestager, commissioner in charge of competition policy. “The companies concerned carved up the retail food packaging market and agreed on prices rather than competing on their merits. Cartels harm our entire economy when companies set prices instead of the market. This removes the incentive to innovate and will not be tolerated.”
Linpac received full immunity from any fines for being the first company to come forward and reveal the cartel to the commission. Other companies received fine reductions based on their cooperation with the investigation.
According to the commission, its investigation, which began with unannounced inspections in June 2008, revealed the existence of five separate cartels for retail food packaging that operated between 2000 and 2008. These included:
- In the markets for polystyrene foam trays and polypropylene rigid trays in North-West Europe (NWE). This refers to Belgium, Denmark, Finland, Germany, Luxembourg, the Netherlands, Norway and Sweden. The conduct occurred between June 2002 and October 2007.
- In the market for polystyrene foam trays in Central and Eastern Europe (CEE), i.e., the Czech Republic, Hungary, Poland and Slovakia, between November 2004 and September 2007.
- In the market for polystyrene foam trays in South-West Europe (SWE), which includes Portugal and Spain. The conduct occurred between March 2000 and February 2008.
- In the market for polystyrene foam trays in France between September 2004 and November 2005.
- In the market for polystyrene foam trays in Italy from June 2002 to December 2007.
Earlier in June, Vestager stated fighting cartels is a high priority for the commission. “These polystyrene foam and rigid trays only cost a few euro cents each, but retailers use many billions of them every year in the countries affected by these cartels,” she said. “So you can get some idea of the potential damage done to retailers, and in turn to consumers, when companies get together to agree on prices and to share markets between themselves … The fines imposed reflect the seriousness of the infringements.”
A full list of the fines and a table detailing each company’s participation and its duration in each cartel can be found on the European Commission website.