Bundeskartellamt imposes fines on aluminum forges

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The German Federal Cartel Office (Bundeskartellamt) has imposed fines on aluminum forging companies on account of anti-competitive agreements.

The Bundeskartellamt has imposed fines totalling approximately 175 m EUR on five aluminium forging companies and ten employees responsible for engaging in illegal anti-competitive agreements.

Fines of 175 m EUR against aluminum forges

The fines were imposed on Otto Fuchs Beteiligungen KG, based in Meinerzhagen, Leiber Group GmbH & Co KG, Emmingen-Liptingen, Strojmetal Aluminium Forging GmbH, Singen (Hohentwiel), Presswerk Krefeld GmbH & Co. KG, Krefeld, and Bharat Forge Aluminiumtechnik GmbH, Brand-Erbisdorf. The Bundeskartellamt’s investigations were triggered by a leniency application filed by the aluminium forging company Hirschvogel Aluminium GmbH based in Gerstungen. In accordance with the authority’s leniency programme no fine was imposed on this company.

Bundeskartellamt penalizes unlawful price fixing among manufacturers

Andreas Mundt, President of the Bundeskartellamt: “For many years the companies had worked towards the mutual aim of passing on rising costs to their customers in an effort to avoid disadvantages caused by increased costs. For this purpose, senior staff members of the forging companies met regularly and exchanged information on cost factors which are very substantial price components. They encouraged one another to pass on possible increases to their customers.”

In the period between April 2006 and April 2018, representatives of the companies attended a total of 23 meetings of what they referred to as the “Aluminium Forging Group”. Not all of the companies fined participated in the meetings throughout this whole period. Leiber Group GmbH & Co. KG had participated in such meetings since 2007, Otto Fuchs Beteiligungen KG since 2010 and Strojmetal Aluminium Forging GmbH since 2011.

Joint meetings with exchange of information about costs

The companies were in general agreement that their respective procurement costs and cost increases would be passed on to their customers. At their meetings senior staff members regularly exchanged information on individual costs incurred in their procurement processes and on increased costs for aluminium, energy and the processing of aluminium into an input material suitable for forging. The companies’ representatives also discussed how these costs could be passed on to customers and informed each other on the progress they had made in this respect. They also agreed to calculate lifetime reductions only based on their own value creation process and not to apply such reductions to procurement costs as well. Lifetime reductions, referred to as “ratio” by the parties involved, are usually agreed once a supply relationship is started and are meant to take account of future productivity gains.

Customers come from the automotive industry

Well-known automotive suppliers and manufacturers are among the key customers of the forging companies as well as companies active in many other business areas, in particular the motorcycle sector.

In setting the fine the Bundeskartellamt took into account in favour of Bharat Forge Aluminiumtechnik GmbH and Presswerk Krefeld GmbH & Co. KG that the leniency applications filed by these companies later on had substantially helped to prove the alleged offence and that they had cooperated with the authority in uncovering the infringements. Just as Strojmetal Aluminium Forging GmbH, these two companies have acknowledged the alleged offence and agreed to a settlement.

The fining decisions are not yet final and can be appealed to the Düsseldorf Higher Regional Court.

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