UpdateFined p-wax makers wait on appeals

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

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LONDON (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.

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By: Mark Watts
+44 20 8652 3214

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