Via C&EN, this fascinating story of companies colluding to lower the prices of their raw material (article by Alex Scott):
In a typical price-fixing scheme, companies collude to raise the price of a product they sell. In Europe, four chemical companies apparently spent several years doing the opposite: colluding to lower the price of a product they buy.
The companies—Celanese, Clariant, Orbia, and Westlake—were found guilty in 2020 by the European Commission (EC) of fixing the purchasing price of ethylene in parts of Europe between 2011 and 2017. Now they are being sued by six ethylene producers for a total of more than $6 billion.
And things could get worse: even companies not selling ethylene directly to the four firms can claim a loss of earnings. Consequently, the already-huge sums being claimed could rise to a level that bankrupts some of the defendants, industry experts say.
The claims against the buyers, which deny that their behavior hurt the ethylene sellers, have mounted since the start of this year. In the latest development, on July 16 LyondellBasell Industries became the sixth producer to initiate legal action with a claim that the cartel’s behavior cost it $1.86 billion. The other claimants are BASF, Dow, OMV, Shell, and TotalEnergies.
I found this to be very amusing:
Clariant has made clear that it has no intention of accepting the financial claims. The Swiss company maintained during its defense in the 2020 EC case that its participation in the buyers’ group involved only exchange of general views on European price developments and not specific terms or prices.
Read the whole thing. Good luck to Clariant, lol.
I've noticed that older industry colleagues are nervous about the appearance of collusion. I heard there was a big chemical industry collusion scandal about 20 years ago. I was too early in my career to be aware of it at the time.
ReplyDeleteI've also observed that the oil industry is still like this. I tried to set up a lunch meeting between a salesman from my company and a friend at one of the big oil companies a while back, and my friend went ballistic about the possibility of getting in trouble for accepting a free lunch from a prospective supplier. Apparently, the big oil companies been accused of collusion so many times that they're extremely paranoid. I was surprised because in my area of the chemical industry, it's really common to receive meals, sports tickets, boxes of candy, etc from suppliers.