Spain's competition commission fines Ilpa, Veripack total of €3.8M for fixing prices of plastic packaging for produce; Infia, parent company Linpac escape €8M in fines for blowing whistle on cartel

MADRID , December 13, 2011 (press release) – The National Competition Commission has issued a resolution in which it has ruled that the companies I.L.P.A, S.r.l.-Divisione ILIP, INFIA, S.r.l. and VERIPACK EMBALAJES, S.L. participated in a practice prohibited by Spanish Competition Act 15/2007. These companies are present in the market for the manufacture and marketing of plastic containers for packaging, protecting and adding value to fruit and vegetable products.

The formal proceedings arose out of a request for exemption from payment of the fine pursuant to the National Competition Commission’s Leniency Programme which was made by LINPAC GROUP LTD (“LINPAC”), the parent company of INFIA, S.r.l. (“INFIA”). In its statement LINPAC described certain meetings that were systematically held at the start of the campaigns by some of the companies in the sector (INFIA, AUTOBAR - now known as VERIPACK EMBALAJES, S.L., NESPAK, S.p.A., I.L.P.A, S.r.l.-Divisione ILIP, PLASTIC COMPANY, S.r.l. and ISAP PACKAGING, S.p.A., PLÁSTICOS ALZIRA, the distributor in Spain of ISAP PACKAGING, S.p.A. and the distributors of I.L.P.A., S.r.L.-Divisione ILIP in Spain, AGROENVAS, S.L. and EUROPLASTIC DEL PENEDÉS, S.L.) in which agreements were reached to fix prices and share out clients. Subsequently the implementation and control of the agreements adopted was monitored by means of bilateral contacts. The aim of all of these actions, according to the applicant for leniency, was to limit competition in the market for the manufacture and marketing of plastic baskets for packaging fruit and vegetables.

Following the analysis of the statement from the applicant for leniency and the documentation produced, the Investigations Division carried out inspections at the head offices of certain companies, including the ones located in other countries – Italy – through Autorità Garante Della Concorrenza e del Mercado (the Italian competition authority) and sent separate requests for information to others. On 10 May 2010 it decided to open formal proceedings S/0251/10, Envases Hortofrutícolas [Fruit and Vegetable Containers], in relation to restrictive practices of the kind prohibited by article 1 of Spanish Competition Acts 16/1989 and 15/2007 and by article 101 of the Treaty on the Functioning of the European Union against the companies INFIA, I.L.P.A. S.r.l.- Divisione ILIP (“ILPA”), AGROENVAS, S.L. (“AGROENVAS”) and VERIPACK EMBALAJES, S.L. (“VERIPACK”).

In its Resolution of 2 December 2011 the CNC Council ruled that there was proof of the participation of the accused companies INFIA; ILPA - and jointly and severally its parent company LINPAC; and VERIPACK - and jointly and severally its parent company GROUPE GUILLIN, in a cartel in the market for plastic containers for packing and protecting fruit and vegetable products from 1999 until the 2006/2007 campaign. The aim of the cartel was to limit or distort competition in this market, and more specifically in the market for disposable plastic polymer containers for the packaging of fruits (basically baskets and tubs for red fruit) in the southern part of Spain (more specifically in Huelva).

Participation in a cartel constitutes a very serious breach of article 1 of the Spanish Competition Act and article 101 of the Treaty on the Functioning of the European Union and, in accordance with the criteria laid down in article 62 of the Competition Act and in the Guidelines on the quantification of sanctions imposed by the CNC, the Council decided to impose the following fines on the parties guilty of the offending conduct:

  • On INFIA, a fine of €8,371,740, for which its parent company LINPAC would also be jointly and severally liable in the sum of €7,709,070.
  • ON ILPA, a fine of €1,003,583.
  • On VERIPACK, a fine of €2,850,790, for which its parent company GRUPO GUILLIN S.A. would also be jointly and severally liable in the sum of €2,250,515.
However, as a result of the application of the leniency programme, INFIA and its parent company LINPAC are exempt from the payment of the fine that would otherwise correspond to them.

Furthermore, the Council decided not to rule that there was proof that the company AGROENVAS had committed a breach of the Competition Act because it took the view that the company acted in the cartel for and on behalf of the subsidiary of ILPA in Spain, forming an economic unit with ILPA in the market under ILPA’s control.

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