(Adds ENI reaction, para 12)
By Paul Taylor
BRUSSELS Oct 1 The European Commission fined
nine petrochemicals companies a total of 676 million euros ($955
million) on Wednesday for forming a "paraffin mafia" to fix
prices and carve up markets for paraffin wax.
"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," EU Competition Commissioner
Neelie Kroes 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 biggest individual fine of 318.2 million euros was
imposed on Sasol (SOLJ.J) of South Africa and Germany, which the
European Union executive described as the leader of the illegal
cartel, an official statement said.
Anglo-Dutch oil major Shell (RDSa.L) escaped a potential
fine of 96 million euros because it blew the whistle first to
the EU competition authorities.
Kroes said the cartel was known inside Shell as the
"paraffin mafia" and in Sasol as "Blauer Saloon" (Blue Saloon)
after the hotel bar in Hamburg, Germany, where the first
meetings of executives from the companies were held.
It was a very serious infringement of EU treaty antitrust
rules, compounded by the duration of the cartel, she said.
It was the fourth-highest fine ever imposed by EU regulators
on a sector, topped only by the record 992.3 million euros on
elevator companies last year, 790.5 million on makers of
vitamins in 2001 and 750.5 million on manufacturers of gas
insulated switchgear in 2007.
Sasol, the world's biggest maker of motor fuel from coal,
said it would likely appeal the ruling.
"Sasol is 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
company said in a statement.
The other companies fined were Total (TOTF.PA) (128.1
million), Exxon Mobil (XOM.N) (83.6 million euros), RWE
(RWEG.DE) (37.4 million), ENI (ENI.MI) (29 million), Hansen &
Rosenthal <24 million), MOL MOLB.BU (23.7 million), Repsol
(REP.MC) (19.8 million), and Tudapetrol (12 million).
Eni said it would appeal, adding it noted "the Commission
has estimated the company's involvement ... as marginal and
limited in time (2002-2005)."
The Commission said the cartel activity took place between
1992 and 2005, when it began investigating with raids on
petrochemicals companies prompted by an application from Shell
for leniency in return for information provided.
The companies were well aware their activity was illegal,
"I sincerely hope... that these high fines will encourage
the management of these companies and others to look very
carefully at what their staff are doing, and I hope that in turn
the shareholders... will look very carefully at the management,"
THe Commission said individuals or companies that were
victims of the cartel were entitled to seek damages in national
courts of EU member states. See related factbox [nL1211812]
(Additional reporting by Jeremy Smith, Ingrid Melander and
James Macharia in Johannesburg, Svetlana Kovalyova in Milan;
Editing by Dale Hudson, Richard Hubbard and Jon Loades-Carter)