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2008 Issues Archive
26 November 2008
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Spending cuts could follow Pilkington fine
Glassmaker Pilkington has refused to rule out investment cutbacks at its UK plants in the wake of a massive anti-trust fine imposed by the European Union.
Pilkington and three other glassmakers – Asahi, Saint-Gobain and Soliver – were fined a total of €1.3 billion for conspiring to fix the prices of windscreens and other automotive products.
The EU said that between early 1998 and early 2003 the companies discussed target prices and market sharing information in a series of meetings and other illicit contacts.
The EU said the four companies controlled about 90% of the European automotive glass market, which was worth around €2 billion in the last full year of the infringement.
Pilkington, which has its headquarters in St Helens in Merseyside and a European technical centre near Ormskirk in Lancashire, received an individual fine amounting to €370 million.
It said: “We will certainly look very carefully at investment decisions. Market conditions are already very tough and this makes things more difficult.”
Pilkington was bought in 2006 by the Japanese company Nippon Sheet Glass, which said that it might appeal against the EU fine.
The €1.3 billion punishment represents the largest cartel fines ever imposed by the EU. Competition commissioner Neelie Kroes said: “These companies cheated the car industry and car buyers for five years in a market worth €2 billion in the last year of the cartel. The commission has imposed such high fines because it will not tolerate such illegal behaviour.”
She said that management and shareholders of companies that damage consumers and European industry by running cartels must learn their lessons the hard way, adding: “If you cheat, you will get a heavy fine.”
The main customers of the car glass suppliers are car manufacturers.
© PE Publishing, 26 November 2008
