US buyers accuse PU foam producers of price fixing

31 August 2010 20:00  [Source: ICIS news]

Buyers sue PU foam makers(Recast with timing of the lawsuits)

HOUSTON (ICIS)--US polyurethane (PU) foam buyers have accused several producers in court of fixing prices for at least 11 years.

The buyers filed several lawsuits this month accusing producers of charging too much.

PU foam producers were not immediately available for comment on Tuesday.

The buyers sued The Carpenter Co, who they said was the world's largest producer of polyurethane foam cushioning, along with other producers.

Another producer, Hickory Springs Manufacturing, is one of the largest PU foam makers in the US, with more than 160 flexible foam formulations, according to at least one of the lawsuits.

In all, the producers are most of the major foam companies in North America, representing a significant portion of the US market, which is expected to report $12bn (€9bn) in sales this year, the lawsuit said.

The producers began fixing prices at least 11 years ago, typically to pass through rising feedstock costs in polyols and toluene diisocyanate (TDI), according to the litigation.

The producers would discuss the timing and magnitude of their price increases for polyurethane foam, the buyers alleged. The producers would also divide up customers, agreeing not to encroach on each others' markets, according to the buyers.

Since at least 1999, virtually every known price increase came after the producers met to plan their initiatives, the buyers charged.

The buyers alleged that they paid inflated prices for PU foam, prices that would have been lower in a competitive market free from price fixing.

The buyers have asked the US District Court for the Western District of North Carolina to grant them class-action status, which would allow others to participate in the lawsuit.

The PU foam producers and subsidiaries being sued include Hickory Springs Manufacturing; Valle Foam Industries; Carpenter; The Woodbridge Group; Flexible Foam Products; Scottdel; Foamex Innovations; Future Foam; and Vitafoam.

Hickory Springs said it had no comment.

Calls to Valle Foam, Carpenter, Scottdel, Foamex Innovations, Future Foam, Vitafoam and Woodbridge were not immediately returned.

Email messages sent to Flexible Foam Products and Vitafoam were not immediately returned.

The buyers suing the producers include Piazza's Carpet & Tile Shop, Shore-Line Carpet Supplies, Thompson Trading and V&M, which does business as Costa International.

Steven Lackey, Sharyn Lackey and Keith Stokes also sued the producers. They were the sole shareholders of CFC Hiddenite, which was known as Craftmaster Furniture before being liquidated.

($1 = €0.79)

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By: Al Greenwood
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