Commission penalises sorbate cartel

Related tags European union European commission

The European Commission yesterday slammed a €138.4 million fine on
four sorbate companies that supply the dairy industry after being
accused of operating a cartel in the 1990s.

The European Commission yesterday slammed a €138.4 million fine on four sorbate suppliers accused of operating a cartel in the 1990s.

Following investigations the Commission concluded this week that Hoechst , Chisso Corporation, Daicel Chemical Industries , The Nippon Synthetic Chemical Industry and Ueno Fine Chemicals Industry operated a cartel in the sorbates market between 1979 and 1996.

Sorbates are one of the most widely used chemical preservatives in Europe to prevent the development of moulds, bacteria and other micro-organisms in foods, including dairy products. They are also used for the coating of cheese wrapping paper.

"Because of this conspiracy, European consumers paid more for many everyday product than if the companies had competed against each other. I am determined that participation in a cartel should not pay,"​ said Competition Commissioner Mario Monti.

In order to prove his point the Commissioner fined Hoechst €99m, Daicel Chemical Industries €16.6m, Ueno Fine Chemicals Industry €12.3m and finally the Nippon Synthetic Chemical Industry Co €10.5m. Chisso avoided a fine, obtaining full immunity because the company approached the Commission first in 1998 to provide information on the cartel.

According to the Commission's investigations, in 1995 the five companies controlled about 85 per cent of the sorbates market in the European Economic Area - EU member states plus Norway, Liechtenstein and Iceland.

Until it transferred its sorbates business to Nutrinova in 1997, Hoechst was the largest producer of sorbic acid - the main type of sorbates - followed by Daicel. Hoechst is based in Germany. The other four companies are all headquartered in Japan.

"The only way for companies to avoid high fines is to come clean and stop participating in cartels whose only purpose is to extort from unknowing consumers, be they intermediate or final, illicit profits,"​ concluded Monti.

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