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Brussels, 14 September 2005

Competition: Commission fines producers of industrial thread a total of €43.497 million for cartels

The European Commission has fined thread producers from Germany, Belgium, The Netherlands, France, Switzerland and the United Kingdom a total of €43.497 million for operating cartels in the market for industrial thread in violation of EC Treaty rules on restrictive business practices (Article 81). Industrial thread is used in a variety of industries to sew or embroider various products such as clothes, home furnishings, automotive seats and seatbelts, leather goods, mattresses, footwear, and ropes.

“Cartel behaviour is illegal, unjustified and unjustifiable, and will be punished severely no matter how large or small the companies involved” declared Competition Commissioner Neelie Kroes. “I will not allow consumers to be denied the benefits of the Single Market by companies carving up markets between themselves”.

The decision is based inter alia on information obtained during unannounced inspections carried out by the Commission in November 2001 at the premises of several Community producers of textile/haberdashery products. During these inspections and the subsequent investigation, the Commission discovered evidence that undertakings had taken part in three cartel agreements:

  • a cartel on the market in thread for industrial customers in Benelux and the Nordic countries from January 1990 until September 2001
  • a cartel on the market in thread for industrial customers in the United Kingdom from October 1990 until September 1996
  • a cartel on the market in thread for automotive customers in the European Economic Area (EEA) from May/June 1998 until 15 May 2000.

For these three markets, the thread producers took part in regular meetings and had bilateral contacts to agree on price increases and/or on target prices, to exchange sensitive information on price lists and/or prices charged to individual customers, and to avoid undercutting the incumbent supplier’s prices with a view to allocating customers.

The companies involved were the following: Ackermann Nähgarne GmbH & Co (D), Amann und Söhne GmbH (D), Barbour Threads Ltd (UK), Belgian Sewing Thread N.V.(B), Bieze Stork B.V. (NL), Bisto Holding B.V. (NL), Coats Ltd (UK), Coats UK Ltd (UK), Cousin Filterie SA (France), Dollfus Mieg et Cie SA (France), Donisthorpe & Company Ltd (UK), Gütermann AG (D), Hicking Pentecost plc (UK), Oxley Threads Ltd (UK), Perivale Gütermann Ltd (UK), Zwicky & Co AG (CH).

The Commission considers the infringements to be very serious. By its very nature, the implementation of cartel agreements of the type described above leads to a major distortion of competition, which is of exclusive benefit to producers participating in the cartel and is detrimental to customers and, ultimately, to final consumers.

In fixing the amount of the fine the Commission took account of the gravity, the duration of the infringements, the existence of any aggravating or mitigating circumstances and the individual weight of the companies in the infringements in the different markets. The Commission also had regard to cooperation given under the Commission’s Leniency Notice by some of the companies involved.

Individual amounts of the fines (in € million):

For the cartel of industrial thread in the Benelux and Nordic countries, the Commission imposed the following fines:

Coats Ltd €15.05 million

Amann und Söhne GmbH €13.09 million

Gütermann AG €4.021 million

Barbour Thread Ltd €2.145 million

Belgian sewing thread N.V. €0.979 million

Bieze Stork B.V. €0.514 million

Zwicky €0.174 million

For the cartel of automotive thread in the EEA, the Commission imposed the following fines:

Cousin/Amann €4.888 million

Coats €0.65 million

Oxley €1.271 million

Barbour €0.715 million

No fine was imposed for the cartel of industrial thread in the UK as the Commission has no proof that the undertakings participated in a continuous cartel within the five years preceding the Commission’s inspections in November 2001.

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