Cartel Busters Raid PVC Makers

EU Commissioner Monti collected 923m euros in cartel fines last year

BBC 14feb03

[Also see: PVC: A Health Hazard From Production through Disposal Paul Goettlich 25oct01]

Anti-trust investigators have raided at least 14 companies in nine or more countries on Wednesday over suspected price fixing of PVC.

The visits were coordinated between competition bodies in the US, Europe, Japan and Canada to provide the maximum element of surprise.

Dutch chemicals giant Akzo Nobel and US chemicals producer Rohm and Haas admitted on Friday their offices had been subject to the raids.

Both companies said they were cooperating fully with officials.

PVC, or polyvinyl chloride, is a widely used plastic with global sales worth billions of euros.

It is used in products ranging from children's toys to construction materials and auto parts.

Firms found guilty of price fixing in the EU can expect hefty fines, with maximum penalties running as high as 10% of a company's worldwide annual sales.

Price fixing The European Commission said it had raided firms in France, the Netherlands, Germany, Belgium, Italy and the UK.

"The purpose of these inspections is to ascertain whether there is evidence of a cartel agreement and related illegal practices concerning price fixing and market sharing for these products," the Commission said.

Brussels said the raids did not necessarily mean any of the firms were actually indulging in anti-competitive behaviour.

Officials were investigating claims that the companies were running two separate cartels in making plastic coverings.

European cartel busters have become increasingly active in recent years as the EU tries to protect its internal market from anti-competitive behaviour.

EU Competition Commissioner Mario Monti has doubled his anti-cartel teams over the last three years and collected 923m euros (£617m) in anti-cartel fines last year alone.

Evidence gathered by EU officials is allowed to be used in court cases in America, where litigants can win enormous civil damages from offenders.

Japan antitrust body investigates plastics firms

REUTERS 14feb03

TOKYO - Japan's antitrust watchdog said on Friday that it was investigating the offices and other premises of three big Japanese plastic additive makers as part of a global probe into suspected price-fixing.

The three companies -- Mitsubishi Rayon Co <3404.T>, Kureha Chemical Industry Co Ltd <4023.T> and Kaneka Corp <4118.T> -- are Japan's top producers of impact modifier, a chemical used in the manufacture of the widely used plastic polyvinyl chloride (PVC).

"We began an investigation to search for evidence on February 12," a spokesman at the Fair Trade Commission told Reuters.

He declined to give further details, but confirmed local newspaper reports that the probe was related to suspected price-fixing.

Japan's plastic additive makers are suffering from an economic downturn and growing consumer demand for environmentally friendly products, which has hit demand for some plastics.

The raid was a part of a global probe into two suspected price-fixing cartels on PVC-related chemicals.

Anti-trust investigators in the United States, European Union, Japan and Canada mounted dawn raids on at least 14 companies in nine or more countries on Wednesday, coordinating the visits to provide the maximum element of surprise.

The competition watchdog agencies declined to give names of other companies involved, although U.S. chemicals maker Rohm and Haas (nyse: ROH - news - people) admitted on Thursday it was cooperating with the inquiry. The European Commission, the EU's executive body, said the raids targeted firms making heat stabilisers, as well as others producing impact modifiers and processing aids, all of which are used in PVC manufacture.

PVC is one of the most widely used plastics, used for everything from construction and auto parts to toys and blood bags.

The European Commission said on Thursday it had raided firms in France, the Netherlands, Germany, Belgium, Italy and Britain, and that the nature of the suspected cartels called for global cooperation.

Shares in the three Japanese firms were unscathed by the news.

Mitsubishi Rayon rose 2.36 percent to 304 yen on Friday, while Kureha Chemical lost 1.01 percent to 391 yen. Kaneka's stock dipped 0.93 percent to 641 yen.

The benchmark Nikkei 225 average rose 1.19 percent.