October 2, 2008

‘Paraffin Mafia’ Fined EUR 676m for Fixing Prices

Business News In Brief

PETROCHEMICALS The European Commission fined nine petrochemicals companies a total of 676m (534m) yesterday for forming a "paraffin mafia" to fix prices and carve up markets for paraffin wax, although Shell escaped a 96m fine because it blew the whistle. "There is probably not a household or company in Europe that has not bought products affected by this 'paraffin mafia' cartel, with all that implies in terms of paying over the odds, higher costs and economic damage," the EU Competition Commissioner, Neelie Kroes, said. Paraffin waxes are used in products from candles to paper cups and plates, the wax coating of cheese, chemicals, tyres and chewing gum. Ms Kroes said the cartel was known inside Shell as the "paraffin mafia" and in Sasol as "Blauer Salon" (Blue Saloon) after the hotel bar in Hamburg, Germany, where the first meetings of executives from the companies were held. It was the fourth-highest fine imposed by EU regulators on a sector. The firms fined were Exxon Mobil, Repsol, ENI, Tudapetrol, Hansen & Rosenthal, RWE, Total and MOL.

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