The European Commission has announced fines totalling € 184 million to a group of five bitumen suppliers accused of operating a cartel in the Spanish bitumen market between 1991 and 2002. The companies named in the cartel were BP of the UK, Spain¡¯s Repsol and Cepsa, Nynäs of Sweden and Portugal¡¯s Galp. Repsol, Cepsa and Galp say they will appeal against the fines.

The commission says that the five companies established market quotas and allocated sales volumes in the Spanish bitumen market for 12 years between 1991 and 2002. It estimates that in the market was worth € 286 million in 2001.

Its investigation was launched in October 2002, following an application for immunity from BP under the Commission¡¯s leniency rules. By reporting the cartel BP was excused any financial penalty for its participation in the cartel.

According to the Commission Repsol and Cepsa were the leaders of the cartel, and their fines were increased by +30%. Confusingly though, both these companies later qualified for a reduction in their penalties under leniency rules for co-operating with the investigation.

Cepsa received the heaviest fine - € 83,9 million, similar to Repsol¡¯s € 80,5 million fine. Nynäs and Galp were penalised less heavily at € 10,6 million and € 8,7 million respectively. In total the fines come to € 183,7 million. The Commission has waived a further € 148 million of fines under its leniency programme including all of the € 66,4 million penalty that could have been imposed on BP.

Appeals

Cepsa, Galp and Repsol all say they will appeal against the fines. A statement from Cepsa said it was not responsible for the cartel and described its fine as ¡°unjustified and disproportionate.¡± Galp took a similar stance, while Repsol cites its co-operation with the investigation as a mitigating factor.

However, a statement from Nynäs was conciliatory. ¡°Unfortunately our own investigation also shows that some mistakes were made in Spain, which we have admitted to the Commission. I regret that our systems then in place had deficiencies that allowed us to get involved in the business culture that then prevailed in the Spanish bitumen market,¡± said company president Staffan Lennström. Nynäs said it is awaiting the full text of the Commission¡¯s judgement before considering its next step.

Repeat offenders

A year ago the Commission fined a cartel of 14 companies active in the Dutch bitumen market a total of € 267 million. BP and Nynäs were also included in that group, although once again BP¡¯s fines were waived under leniency rules because it informed the Commission of the cartel¡¯s existence. Nynäs was fined € 20,3 million for its part in the Dutch cartel.