EU hits packaging firms with €115m antitrust fine

Huhtamäki, Nespak, Vitembal, Silver Plastics, Coopbox, Magic Pack, Sirap-Gema and Linpac and distributors Ovarpack and Propack participated in at least one of five separate cartels.

The companies fixed prices and allocated customers of polystyrene foam or polypropylene rigid trays, in breach of EU antitrust rules.

FoodProductionDaily has contacted the packaging firms involved.

Silver Plastics declined our request for a statement and Coopbox Group said it had no comment at the moment but was looking at the issue. Linpac, Sirap-Gema and Huhtamaki have issued statements (below).

Linpac given immunity others hit with fines ​

Linpac avoided a fine of just over €145m and received full immunity as it was the first company to reveal the cartel to the Commission.

Sirap-Gema (€35.9m), Coopbox (€33.7m) Silver Plastics (€21.2m) and Huhtamäki (€15.6m) were hit were the highest amounts.

Nespak (€5m), Magic Pack (€3.3m), Vitembal (€1.1m) were fined more than €1m.

The two distributors Ovarpack (€67,000) and Propack (€65,000) were hit with smaller fines.

Three of the firms said they were unable to pay so the Commission granted reductions to two and rejected one. It would not reveal which companies this was applicable to. Reductions on the fines can be seen in the below table.

Huhtamäki, Sirap-Gema and Linpac respond​

Huhtamäki said it will examine the European Commission's decision and decide on potential further actions.

The firm said concerned operations are no longer part of the group as they were in the rigid consumer goods business in Europe that was closed down or divested between 2006 and 2010.

It added the fine and related legal costs of €2m will be recognized as a non-recurring expense in the Q2 2015 results.

Sirap-Gema and its subsidiaries said it considered the amount of the fine to be ‘manifestly disproportionate’ compared to the economical results of the Sirap Group and the industry and, after examining the decision, it will assess any possible defensive action.

The firm said the facts complained of by the European Commission are 10 years old and the company and its subsidiaries have renewed top management and been properly carrying out drawing up internal procedures and training of personnel on appropriate market policies.

Linpac Group said it ‘fully accepts’ the findings of the European Commission following its investigation.

“We apologise for any wrongdoing by Linpac employees in the past. As soon as Linpac became aware of the anti-competitive behaviour, which took place before 2008 and before our current management team was in place, the company alerted the European Commission,” ​it said.   

The firm said its approach has been recognized as it was not subjected to any penalties.

“We have, since 2008, significantly strengthened our compliance training to ensure that Linpac employees are fully aware of our legal obligations, including in respect of EU competition law, and we seek to uphold the highest ethical standards. ​​

“Linpac’s priority continues to be to build the most trusted brand in the market for fresh food packaging and food service solutions. Our new leadership team is determined to ensure that we live up to this commitment by working hard for our packer, distributor and retailer customers.”​

Contacts referred to as "the Club" or "Mafia"​

From the early 2000s and for just over a year to almost eight years, the ten companies fixed prices, allocated customers and markets, engaged in bid-rigging and exchanged commercially-sensitive information, said the Commission.

Each of the cartels operated with multilateral and bilateral contacts usually held at legitimate industry gatherings.

Physical meetings were complemented by emails and phone exchanges and in some of the cartels, participants would refer to illegal contacts as "the Club" or "Mafia", according to the Commission’s investigation.

Margrethe Vestager, commissioner, in charge of competition policy, said millions of consumers buying food have potentially been hit by the cartels.

“The companies concerned carved up the retail food packaging market and agreed on prices rather than competing on their merits,” ​she said.

“Cartels harm our entire economy when companies set prices instead of the market. This removes the incentive to innovate and will not be tolerated."​

Who was involved and where?​

The Commission's investigation revealed five separate cartels, only one involving rigid trays, for retail food packaging in the European Economic Area (EEA).

One affected market was polystyrene foam and polypropylene rigid trays in North-West Europe (Belgium, Denmark, Finland, Germany, Luxembourg, the Netherlands, Norway and Sweden) between June 2002 and October 2007.

Linpac, Vitembal and Silver Plastics (June 2002-October 2007) and Huhtamäki (June 2002-June 2006) were involved in this cartel.

Polystyrene foam trays in Central and Eastern Europe (Czech Republic, Hungary, Poland and Slovakia) between November 2004 and September 2007 and in South-West Europe (Portugal and Spain) between March 2000 and February 2008 were also affected. 

In the Central and Eastern Europe investigation, Linpac, Sirap-Gema, Coopbox (November 2004-September 2007) and Propack (December 2004-September 2006) were implicated. 

Affected in the South-West Europe investigation were Linpac and Coopbox (March 2000-February 2008), Huhtamäki (December 2000-January 2005), Vitembal (October 2004-July 2007) and Ovarpack (December 2000-January 2005 and October 2007-February 2008).

The Commission investigation revealed another cartel in France from September 2004 and November 2005 and Italy between June 2002 and December 2007. 

In France, Linpac, Vitembal, Huhtamäki and Sirap-Gema (September 2004-November 2005) and Silver Plastics (June 2005-October 2005) participated. 

In Italy, Linpac, Sirap-Gema, Coopbox (June 2002-December 2007), Vitembal (July 2002-December 2007), Nespak October 2003-September 2006) and Magic Pack (September 2004-March 2006) were involved.

The Commission took into account the companies' sales of products concerned in the EEA, the serious nature of the infringement, geographic scope and duration.

Investigations started with unannounced inspections in June 2008, a statement of objections came in September 2012 and there was an oral hearing in June 2013.