Some of Europe’s largest companies – including fuel majors – have been fined heavily for participating in a paraffin wax cartel, raising the cost of this key input for tyre and car component manufacturers.
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Sasol, Total, ExxonMobil and six others were penalised a total of EUR676m for participating in what has been branded the ‘paraffin wax mafia’.
Members, the European Commission (EC) concluded, exchanged sensitive commercial information, fixing European Union (EU) paraffin wax prices between 1992 and 2005, with executives meeting in luxury hotels across Europe in cities such as Milan, Vienna, Budapest, Paris, Munich and Strasbourg.
“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,” said EU competition commissioner Neelie Kroes, announcing the fines.
She valued the EU paraffin wax market at EUR500m a year; it is also a key input of most rubber goods, adhesives and chemicals also used by the auto industry.
The companies involved – and their fines – were: Sasol (Germany) – EUR318m; Total (France) – EUR128m; ExxonMobil – EUR83m; RWE (Germany) – EUR37m; ENI (Italy) – EUR29m; Hansen & Rosenthal (Germany) – EUR24m; MOL (Hungary) – EUR23m; Repsol (Spain) – EUR19m; and Tudapetrol (Germany) – EUR12m.
Shell was also involved in the cartel, but its EUR96m fine was cancelled by the commission because it tipped off anti-trust officials about the cartel, leading to a series of raids on company premises in 2005.
As well as price fixing, ExxonMobil, MOL, Repsol, Sasol, Shell and Total also agreed market allocations for the product, while ExxonMobil, Sasol, Shell, RWE and Total also fixed prices for slack wax (paraffin wax’s raw material) to end users in Germany.
