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EU fines Aventis for price-fixing

09-Oct-2003

Aventis has had its knuckles rapped by the European Union for its alleged involvement in a cartel to control the price of sorbates, used as preservatives in the pharmaceutical, cosmetics and food industries. The European Commission has fined the company €99 million in the case and accused it of operating the cartel alongside four Japanese companies.

The EC action comes at a time when Aventis and nine other companies, including Eastman Chemical, are being pursued in the US courts over their role in the sorbate price-fixing affair between 1979 and 1997. Five of the companies, including Eastman, Daicel Chemical Industries, and Nippon Synthetic Chemical Industry, have already pleaded guilty to criminal charges brought by the US Justice Department and have paid fines of $132 million (€112m).

EU Competition Commissar Mario Monti has accused Hoechst, which is now part of Strasbourg-based Aventis, of having operated the cartel between 1979 and 1996. He claims that the five companies controlled up to 85 per cent of the European sorbates market, and met twice a year to set prices and production quotas.

In addition to Aventis'penalty, the Commission has levied fines of €39.4 million against Daicel, Nippon Synthetic Chemical and Uneo. No penalty was imposed on Chisso, which was also a member of the cartel but brought the agreement to the attention of the authorities in 1998. It escaped any punitive measures under the Commission's key witness programme.

The size of the fine likely also reflects Hoechst's earlier run-in with the Commission over its role in the broad-ranging vitamins price-fixing scandal.

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