Royal Dutch Shell Plc  .com Rotating Header Image

Financial Times: EU fines synthetic rubber cartel €519m

By Tobias Buck in Brussels: Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Chemical and energy groups including Shell, Dow, Eni and Bayer were yesterday punished for operating a price-fixing cartel in the market for synthetic rubber, a ruling that triggered the second highest fine yet imposed by the European Commission.

The six members of the cartel were fined a total of €519.1m ($682.4m), a sum bettered only by the €790.5m fine imposed on a vitamins cartel more than five years ago. Yesterday’s decision means 2006 will be a record year for cartel fines imposed by the Brussels regulator, taking the total to €1.84bn.

Fines in cartel cases have risen dramatically in recent years, especially for repeat offenders and companies that fail to co-operate fully with investigators.

Neelie Kroes, the European Union competition commissioner, has been keen to deter future offenders by ramping up the financial pain for cartel members.

“The Commission has imposed high fines in this case but if companies continue to indulge in cartel activities, then they can expect their fines to be even higher still,” she said.

Eni, the Italian energy group, was hit hardest, receiving a fine of €272.3m, followed by Shell with €160.9m and Dow, the US group, with €64.6m. Czech group Unipetrol was ordered to pay €17.6m, and Trade-Stomil of Poland €3.8m.

Bayer received immunity from punishment for blowing the whistle on the agreement, escaping what the Commission said would have been a fine worth €204.2m.

The Commission said the cartel lasted at least from 1996 to 2002 and covered two types of synthetic rubber – butadine rubber and emulsion styrene butadiene rubber. The materials are used for producing tyres and a range of consumer goods.

The regulator added that the cartel agreements were struck before or after meetings of an industry association in cities across the EU. “During these meetings the participants agreed prices and exchanged information about key customers and the amounts of synthetic rubber supplied to them,” the Commission said.

Eni said it rejected the Commission’s allegations, and reserved its right to appeal. The Italian group said the fines were “entirely disproportionate and unjustified” since the cartel had not harmed consumers.

Company officials at Unipetrol and Trade Stomil also rejected the ruling, according to Reuters news agency.

Copyright The Financial Times Limited 2006

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Financial Times: EU fines synthetic rubber cartel €519m”

Leave a Comment

%d bloggers like this: