European Court annuls cartel fine on Dutch packaging company

By Rory Harrington

- Last updated on GMT

Related tags European union

Dutch packager Royal Stempher is celebrating after the European General Court quashed a €2.37m fine against the firm made as part of a price fixing cartel investigation six years ago.

Arjen van de Werve, Royal Stempher managing director, told he was delighted justice had finally been done and that it had never been involved in the illegal activity of which it was accused. He added that once its legal fees and interest on the fine had been added, the final sum it would receive from Brussels would likely top €3m.

The Rijssen-based outfit produces industrial paper and plastic sacks for a number of markets including the milk powder for the food sector.

Price fixing ring

The reversal by the court followed action by the European Commission in November 2005 which saw it impose financial penalties in excess of €290m on nine companies – including Stempher - for their part in a price fixing ring for the industrial plastic bag market across half a dozen countries.

Brussels imposed the fines after declaring its probe had revealed evidence of collusion on the establishment of common price calculation models, the sharing of markets, the allocation of sales quotas, the assignment of customers, deals and orders and lastly the exchange of individualised information in Belgium, Germany, Spain, France, Luxembourg and the Netherlands.

The Commission said that a cartel had existed between 13 September 1991 and 28 November 1997.

The court quashed the fine because it said the Commission had failed to prove Stempher – and that of its partnership company​Koninklijke Verpakkingsindustrie Stempher CV – of involvement in the cartel within five years of the investigation being launched in 2002. Under European law, price fixing fines must be levied within five years of an alleged offence occurring.

“The Commission did not produce sufficiently precise and consistent evidence to establish that Stempher continued to participate in the cartel after 20 June 1997,”​ said the General Court yesterday.

It added: “The rule concerning the five-year limitation period thus precludes the Commission from fining Stempher. As the Commission has failed to show, either in its 2005 decision or in the course of proceedings before the Court, a legitimate interest in a finding being made that Stempher committed an infringement before 20 June 1997,​the Court decides to annul the Commission’s decision in so far as it imposes a fine of €2.37 million on Stempher BV and Koninklijke Verpakkingsindustrie Stempher CV.”

The Stempher chief said that the money, once returned by the European Commission, would be reinvested into the company.

Other fines

The European General Court ruled the fine on one company involved in the cartel should be cut by €3m.

Consequently, the penalty on Low & Bonar and its subsidiary Bonar Technical Fabrics was reduced from €12.24m to €9.18m.

But the judges dismissed the appeals of seven other firms and said the original fines should stand:

  • Fardem Packaging BV (Netherlands) - A joint fine of €34m with Kendrion NV (Netherlands): €2.20 million of the €34 million imposed on Kendrion.
  • RKW SE (Germany) and JM Gesellschaft für industielle Beteiligungen mbH & Co. KGaA (Germany) –joint fine of €39m.
  • Groupe Gascogne SA (France) - Jointly and severally with Sachsa Verpackung GmbH (Germany): €9.9m of the €13.2m imposed on Sachsa.
  • Plasticos Españoles SA (ASPLA) (Spain) – joint fine of €42m with Armando Álvarez SA (Spain).