European Commission fines envelope cartel €19.5m

By Simon Nias, Tuesday 06 January 2015

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Five envelope manufacturers, including the owner of Blackburn-based Heritage Envelopes, have been fined a total of €19.5m by the European Commission (EC) for breaching EU antitrust rules.

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Vestager: "We have closed the envelope, sealed it and returned it to sender"

Spain-headquartered Tompla, French firms GPV and Hamelin, Germany's Mayer-Kuvert and Swedish manufacturer Bong were fined for coordinating prices and divvying up customers between October 2003 and April 2008.

The cartel members were said to have "coordinated their responses to tenders launched by major European customers, agreed on price increases and exchanged commercially sensitive information" through a series of meetings "at top management level".

According to the EC, which began its investigation in September 2010, the overall aim of the cartel was to allocate customers and coordinate prices for the sale of standard/catalogue and special printed envelopes.

These were typically bought by stationery distributors and large companies in Denmark, France, Germany, Norway, Sweden and the UK.

EC competition commissioner Margrethe Vestager said: "For over four years, instead of competing with each other these companies agreed to artificially increase prices for envelopes across a number of member states.

"Everybody uses envelopes. When cartelists raise the prices of everyday household objects they do so at the expense of millions of Europeans. The commission's fight against cartels penalises such behaviour and also acts as a deterrent, protecting consumers from harm.

"On this case we have closed the envelope, sealed it and returned it to the sender with a clear message: don't cheat your customers, don't cartelise."

Mayer-Kuvert was fined both for its involvement and for the involvement of the former GPV group subsidiaries it acquired out of administration in 2011. These included Heritage Envelopes, which was said to have been "a direct participant in the infringement".

All of the companies received a 10% reduction in their fines for acknowledging their involvement in the cartel and their liability in respect of the fines imposed, while all except Bong received additional reductions for cooperating with the EC in the investigation.

Despite the EC acknowledging Mayer-Kuvert's "lesser involvement" in the infringement, the German-headquartered group ended up with the second largest fine of €4,991,000 after deductions for cooperating with the investigation (10%) and agreeing liability (10%).

This was due to Tompla and Hamelin receiving much larger fine reductions under the "leniency notice" of 50% and 25% respectively. The EC said that two companies had invoked "their inability to pay under point 35 of the 2006 Guidelines on fines" resulting in a reduction in their fines, although it did not specify which two companies.

The ultimate fines for Hamelin and Tompla were €4,996,000 and €4,729,000 respectively.

GPV France, the company Mayer-Kuvert set up to acquire most of GPV's envelope production assets, was fined €1,651,000 (20% reduction in total) while Bong was fined €3,118,000 (10% reduction).

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