Crown and Silgan hit with €31.5M collective fine in EU antitrust case over metal BPA packaging
15 Jul 2022 --- The European Commission (EC) has imposed a fine collectively totaling €31.5 million (US$31.5 million) on metal packaging giants Crown and Silgan for participating in a cartel that broke EU antitrust laws through sales of metal cans and closures in Germany.
The breaches occurred over three years, from March 2011 until March 2014, when the EC claims an individual employed by a German subsidiary of Silgan, who retired in 2017, exchanged historic annual overall unit volumes for the previous year for metal closures and supplied them to certain customers in Germany with Crown.
“Metal food cans and closures are part of every household’s pantry. We fine today Crown and Silgan for illegally exchanging sensitive business information and coordinating their commercial strategies at a time when the industry has been transitioning toward less harmful metal cans and closures,” says executive vice-president Margrethe Vestager, in charge of competition policy.
The total fine amount is divided by €7.67 million (US$7.67 million) for Crown and €23.85 million (US$23.85 million) for Silgan. Crown benefited from a 50% reduction in its fine for fully cooperating with the investigation, says the EC, and both companies received a further 10% reduction for settling the case.
BPA manipulation
The products concerned by the cartel were metal closures and cans coated with Bisphenol A (BPA)-free lacquers or BPA-containing lacquers that are predominantly used to close glass jars containing foods such as marmalade, vegetables, fruit, meat or fish.
The companies are not the first to be accused of antitrust breaches following the phase out of BPA.The EC investigation revealed the existence of one infringement consisting of two parts:
First: Regular exchanges between Crown and Silgan of detailed data on their most recent past annual sales volumes of metal closures to their individualized customers in Germany. This high level of transparency gave each company a solid basis for its future commercial strategy regarding a large number of German customers.
Second: Coordination between Crown and Silgan to impose a surcharge and apply shorter minimum durability recommendations concerning metal cans and closures coated with BPA-free lacquers. According to the EC, the parties kept each other informed of their commercial strategies, which allowed them to adapt their market behavior and competitive efforts.
BPA has been largely banned in the EU since 2020, having been noted for its danger to human and environmental health for some time.
Silgan’s defense
Silgan, which was fined a far higher price, has said it does not concur fully with the investigation’s findings.
The company stated that the EC did not find any price fixing, customer allocations, market sharing or other collusion from such exchange of historic annual overall unit volumes.
“After seven long years of working with and supporting this investigation, we felt it was in the best interests of Silgan to enter into this settlement to end the investigation. Silgan has cooperated with the European Commission throughout this investigation, and the time has come to stop incurring costs and expending valuable management time on this matter that dates back to 2015,” said Adam Greenlee, president and CEO.
Antitrust allegations
The case joins a host of accusations levied against major corporations for abusing the phase-out of BPA in Europe to their advantage. Last year, the French competition authority issued objections to 101 companies, along with 14 trade associations, over allegedly agreeing not to communicate over the removal of BPA in their metal food packaging.
Nestlé confirmed it was involved in the case and said it “vigorously denies” any wrongdoing.
By Louis Gore-Langton
