Commission fines bitumen cartel € 267 million

In september the european commission found eight road bitumen suppliers and six users guilty of operating a cartel in the Netherlands’ market between 1994 and 2002. The suppliers were BP, Esha, Klöckner Bitumen, Kuwait Petroleum, Nynäs, Shell, Total and Wintershall. The purchasers - road building contractors - were Ballast Nedam, Dura Vermeer, Heijmans, HBG, BAM and Volker Wessels Stevin. They were fined a total of € 266,7 million.

According to the Commission, the 14 companies conspired to fix the price of all road bitumen sold in the Netherlands between 1994 and 2002. The illegal agreement is said to have included rebates for the six construction companies that were cartel members, and smaller rebates for road building companies outside the group.

Shell and Volker Wessels Stevin are said by the Commission to have founded the cartel, and their fines were increased by +50% as a result. A further +50% was added to Shell’s fine because it is a repeat offender of anti-trust laws, having previously been found guilty of being involved in cartels in the PVC and polypropylene industries. Volker Wessels Stevin’s fine was also increased - by +10% - because the Commission says it tried to obstruct the investigation by twice refusing officials access to its premises.

In contrast, BP was granted full immunity from its € 30,8 million fine under leniency rules, because it informed the Commission of the existence of the cartel in 2002. Kuwait Petroleum’s fine was also reduced by -30% for co-operating with the investigation. Nynäs, Shell and Total also claimed for a reduction in their fines, but did not qualify. None of the construction companies applied for leniency.

Fines

Shell received the largest fine - € 108 million. The sanctions against the other bitumen suppliers were: € 11,5 million for Esha, € 10 million for Klöckner Bitumen, € 16,3 million for Kuwait Petroleum, € 13,5 million for Nynäs, € 20,3 million for Total and € 11,7 million for Wintershall. Fines against the construction companies were € 4,65 for Ballast Nedam, € 5,4 million for Dura Vermeer, € 17,1 million for Heijmans, € 7,2 million for HBG, € 13,5 million for BAM and € 27,4 billion for Volker Wessels Stevin. Since the investigation began, HBG has been acquired by BAM, making the total fine for the company € 20,7 million.

The Commission said it set the fines based on the “very serious nature of the infringement, the limited size of the market, the long duration of the cartel and the size of the firms involved.” It estimates the market for road bitumen in the Netherlands was worth € 62 million in 2002.

Several of the companies involved have expressed surprise at the size of the fines. A statement from Heijmans described its € 17,1 million fine as being “disproportional”, while Ballast Nedam was more scathing, challenging both the size of its fine, and the Commission’s grounds for imposing it.

A statement from the company said “In Ballast Nedam’s view, there is no justification for fining Ballast Nedam concerning the purchasing of bitumen, and certainly not with a fine of this size. Not only has the Commission based its position on inaccurate and incomplete information in the case of Ballast Nedam, it has misjudged and grossly exaggerated Ballast Nedam’s role.”

Ballast Nedam said it would appeal against the Commission’s decision, and Heijmans and BAM said they were considering similar action.