EU to investigate major ethanol producers for alleged price fixing
Jonathan Lopez
07-Dec-2015
(adds commentary from paragraph 11)
LONDON (ICIS)–EU ethanol producers Abengoa, Alcogroup and Lantmannen will be formally investigated for alleged manipulation of ethanol benchmarks, the European Commission said on Monday.
After unannounced raids at the companies’ sites were
carried out in 2013, October 2014 and March 2015, the Commission – the EU’s
executive body – said it had “concerns” the cited companies
“may have colluded” to manipulate ethanol benchmarks
published by price reporting agency Platts.
“For example, by agreeing between them to
submit or support bids with a view to influencing benchmarks
upwards and thus driving up ethanol prices. Such practices,
if confirmed, harm competition and undermine EU energy
objectives by increasing prices for renewable energy, namely
biofuels used for transport,” said the Commission.
“This could lead to a reduction of the use of biofuels as an alternative to fossil fuels, with negative consequences both for consumers and the environment.”
A spokesperson for Abengoa said the company “continues actively cooperating” with the Commission in its investigations into the ethanol markets, and stressed the current enquiries would not “prejudge the outcome of the investigation,” as the EU executive body also said in its statement.
“Abengoa considers all its subsidiaries have at all times complied with the [EU] antitrust regulations,” said the spokesperson.
Lantmannen said in a statement: “Lantmannen cooperates fully with the authority.”
Alcogroup was not immediately available for comment.
Abengoa, which is embroiled in a financial crisis likely
to cause its filing for insolvency in the first quarter of
2016, is a Spain-headquartered large ethanol producer.
Alcogroup is a Belgium-based producer while Lantmannen is
based in Sweden.
“The Commission will now conduct an
in-depth investigation as a matter of priority. The opening
of formal proceedings does not prejudge the outcome of the
investigation,” said the Commission.
Price reporting agency (PRA) Platts said its benchmarks had adhered to the PRA principles outlined by the International Organisation of Securities Commissions (IOSCO) at all times and stressed it “was not an addressee” of the Commission’s statement on Monday.
“While we do not impute buyer’s and seller’s motivation for trading, we investigate reports of price distortions and our governance processes enable us to exclude data that does not adhere to our published methodology. Platts will continue to cooperate fully with the EC’s [European Commission] review,” said a spokesperson at Platts.
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