Price Fixing Charges Reveal Rubbery Figures

The European Commission has raided the premises of a number of rubber product manufacturers, including several also involved in tyre production, as part of a global investigation into price fixing practices. Amongst the companies investigated are Japan’s Bridgestone and Yokohama, along with Grimsby based rubber and plastic technology specialist Dunlop Oil & Marine, a division of Germany’s ContiTech AG and Trelleborg Industrie SAS, the French subsidiary of Sweden’s Trelleborg AB.

“I can confirm that yesterday and today Commission officials have undertaken unannounced inspections at premises of several marine hose producers in France, Italy and the United Kingdom,” Commission spokesman Jonathan Todd informed the media. “The Commission coordinated its investigative measures with the United States Department of Justice in the context of a suspected worldwide cartel concerning marine hoses.”

The European Commission’s action against the companies was undertaken in conjunction with the Office of Fair Trading, Japan’s Fair Trade Commission and the US Department of Justice. In a statement Trelleborg admitted that the Commission had investigated operations at its Clermont Ferrand subsidiary in France and two managers from Trelleborg Industrie SA were arrested in the United States on May 2, along with six other foreign executives, but were later released after being charged with bid rigging and price fixing in the marine hose market. “The operation targeted by the investigation accounts for a small part of the Groups (sic) sales in France,” the statement read, adding that “the investigation is being closely monitored at Group level.” Two senior employees of Dunlop Oil & Marine – managing director Bryan Allison and sales and marketing director David Brammar – were also arrested and charged for their role in the alleged conspiracy.

Marine hose is a flexible rubber hose used by large companies and military departments to transport oil between tankers and storage facilities. The US Justice Department claims that the eight executives in question have engaged in bid rigging and price fixing “at various times” since 1999. According to an affidavit, the alleged conspirators met in locations around the world and referred to the cartel as “the club” or the “Technical Committee — Marine Hose” in written communications. The Justice Department added that the cartel was still meeting as recently as the start of May 2007, and according to the Office of Fair Trading it is believed that their dealings may have affected contracts worth hundreds of millions of pounds. A UK based consulting company, thought to be PW Consulting, headed the cartel, and each manufacturer paid the consultancy US$50,000 a year for the services it rendered. Peter Wittle, Owner of PW Consulting, has been named as one of those arrested and charged by the Department of Justice.