UpdateFined p-wax makers wait on appeals

01 October 2008 17:18  [Source: ICIS news]

(Adds details in the first four paragraphs)

The candle burns out for wax cartelLONDON (ICIS news)--Paraffin wax producers were waiting on Wednesday to hear from the European Commission (EC) in writing before considering appeals against fines totalling €676m ($952m) lodged against them for price-fixing.

Some of the producers - which comprised ENI, ExxonMobil, Hansen & Rosenthal, Tudapetrol, MOL, Repsol, Sasol, RWE and Total - said they were in the dark on the exact reasons why they had been singled out.

Nine producers had been fined a total of €676m ($952m) for operating a pricing cartel between 1992 and 2005, holding regular meetings to discuss prices and allocate markets and customers.

One paraffin wax buyer in the candle industry said it would seek compensation from the suppliers in question but also that it was too early to take specific action.

The Commission said it had fined the companies for taking part in an industry-wide paraffin wax trading cartel.

ENI, ExxonMobil, Hansen & Rosenthal, Tudapetrol, MOL, Repsol, Sasol, RWE and Total were all found guilty of price-fixing between 1992 and 2005, holding regular meetings to discuss prices and allocate markets and customers.

“There is probably not a household or company in Europe that has not bought products affected by this ‘paraffin mafia’ cartel, with all that implies in terms of paying over the odds, higher costs and economic damage,” said EC competition commissioner Neelie Kroes.

“Such illegal cartel behaviour cannot and will not be tolerated by the Commission, and companies' managers and shareholders should take note,” she added.

The fine for Sasol was increased by 50% for leading the cartel, while ENI was ordered to pay 60% more for its previous activities in similar cartels.

Sasol, which in 1995 became a co-shareholder in an existing wax business located in Hamburg, Germany owned by the Schumann group, said in a statement it was surprised by and “does not understand the reasons for the magnitude of this fine and will be studying the reasons for the finding with a view to lodge an appeal against it”.

The Commission investigation started with surprise raids on petrochemicals companies in April 2005, prompted by an application for leniency lodged by Shell.

Shell was not fined due to its cooperation with the Commission.

The EC said in the Shell group, the cartel was called “paraffin mafia”, and in the Sasol group, “Blauer Salon” (blue saloon”), after a hotel bar in Germany where the first meetings of the cartel took place.

Subsequent meetings were said to take place at top hotels all over Europe.

The infringement committed by ExxonMobil, Sasol, Shell, RWE and Total also related to slack wax sold to end-customers on the German market, the Commission said.

Paraffin waxes are used in a wide range of products from candles to paper cups and plates, the wax coating of cheese, chemicals, tyres and chewing gum.

The fines imposed and the leniency reductions granted by the Commission in this case are as follows:


Reduction under the leniency notice (%)

Reduction under the leniency notice (€)

Fine* (€)

Shell, UK/The Netherlands

100

96,000,000

0

Sasol, South Africa and Germany

50

318,200,000

318,200,000

Repsol, Spain

25

6,600,000

19,800,000

ExxonMobil, USA

7

6,291,600

83,588,400

ENI, Italy

0

0

29,120,000

Tudapetrol, Germany

0

0

12,000,000

Hansen & Rosenthal, Germany

0

0

24,000,000

MOL, Hungary

0

0

23,700,000

RWE, Germany

0

0

37,440,000

Total, France

0

0

128 163 000

Total



676,011,400

(*) Legal entities within the undertaking may be held jointly and severally liable for the whole or part of the fine imposed.

For more on p-wax visit ICIS chemical intelligence
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By: Mark Watts
+44 20 8652 3214



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