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News & Press: Industry

Italy’s Antitrust Authority Imposes Cartel Fines of €287m on Major Corrugated Companies

Monday, August 19, 2019   (0 Comments)
Posted by: Alyce Ryan
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The investigation into Italy's corrugated cartel is concluded. More than 30 companies were fined a total of €287m for illegal price-fixing. Smurfit Kappa was hit hardest while DS Smith escaped the fines.

Several Italian corrugated board and integrated corrugated packaging producers regularly engaged in anti-competitive practices over a period of 12 to 13 years. This was the finding of Italy's antitrust authority (AGCM), which released the results of its cartel investigation on 7 August.

The authority's ruling reveals how extensive the case was. According to AGCM, the largest producers in Italy and their subsidiaries - a total of more than 30 companies - as well as the industry association GIFCO were all involved in price fixing. Together, the firms have been fined a total of €287m.

The companies involved are accused of having coordinated their sales prices for corrugated board between February 2004 and March 2017 (when the investigation was launched) and colluding to schedule their production downtime in order to effect price increases. For these activities, the antitrust authority imposed fines totalling €110m.

On the market for corrugated board packaging, according to AGCM, the implicated integrated companies also fixed prices and conditions between September 2005 and March 2017 and divided up the market amongst themselves. The companies were fined a total of €178m in this sector.

Smurfit Kappa has to pay €124m

According to the official documents, Smurfit Kappa Group (SKG) will pay the largest penalty. The company, which operates nearly 20 corrugated board and packaging plants in Italy, will be required to pay fines totalling €124m. In a press release, SKG said it was "very disappointed with the decision" and would appeal it.

SKG's competitor DS Smith escaped the fines because it had filed a request for leniency before the investigation opened. As the first leniency applicant, DS Smith was granted full immunity. The company was thus spared having to pay more than €140m in fines, according to AGCM.

Once the antitrust proceedings started, the companies Ondulati Nordest, Idealkart and Pro-Gest as well as their implicated subsidiaries also applied for leniency. As a subsequent leniency applicant, Pro-Gest was able to reduce its fines by 40 per cent to €48m in total. The two other companies must only pay half of the original fines.

Find the entire article and more details on the case in EUWID Pulp and Paper 33/2019, which will be published on 14 August.