EU, UK and Swiss authorities launch antitrust probe on fragrance industry

08 Mar 2023 --- Anti-competition authorities carried out “unannounced inspections” at dawn on the premises of Symrise, Givaudan, Firmenich and International Flavours & Fragrances (IFF). The European Commission (EC) alongside the UK’s Competition and Markets Authority (CMA) and the Swiss Competition Commission (COMCO) led the inspections, which were based on suspected anti-competitive activities surrounding the supply of fragrances and fragrance ingredients.

PersonalCareInsights speaks to Symrise, Givaudan, Firmenich and IFF.

Importantly, the investigation does not imply that the companies are guilty of transgressing antitrust laws.

“Unannounced inspections are a preliminary investigatory step into suspected anti-competitive practices. The fact that the Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behavior nor does it prejudge the outcome of the investigation itself,” says the EC.

The investigation does not imply that the companies are guilty of transgressing antitrust laws.“The Commission respects the rights of defense, in particular the right of companies to be heard in antitrust proceedings.”

CMA stresses: “At this stage, no assumptions should be made about whether competition law has been broken.”

COMCO explains that through the investigation, the authorities will examine whether there are indeed restrictions of competition prohibited by cartel law. “The presumption of innocence applies to the undertakings,” it maintains.

“COMCO has indications that several undertakings active in the production of fragrances have violated cartel law. There are suspicions that these undertakings have coordinated their pricing policy, prohibited their competitors from supplying certain customers and limited the production of certain fragrances.”

The companies react
Germany-headquartered Symrise confirms it has been contacted by the EU authorities in “connection with the investigation into possible price fixing in the fragrance and aroma molecules sectors.”

“Symrise is fully cooperating with the authorities,” a company spokesperson tells PersonalCareInsights. “We do not have any further details on which we could comment at this time. As soon as any investigation results are available, we assume that the EU authorities will communicate this in a timely manner.”

Similarly, Switzerland-based Givuadan confirms it is part of an industry-wide investigation by the European and Swiss authorities. “As a good corporate citizen, Givaudan is fully cooperating with the authorities. As the investigation is ongoing, we cannot disclose any further details,” says a spokesperson.

“Givaudan is committed to and adheres to the highest ethical standards in business conduct as set out in our Principles of Conduct.”Symrise, Firmenich and Givuadan confirm that investigations are ongoing.

Switzerland’s Firmenich confirms it is liasing with the competition authorities. “As part thereof, unannounced inspections were carried out at its offices in France, Switzerland and the UK,” it shares.

“Unannounced inspections are a preliminary step in antitrust investigations into suspected infringements of competition rules. This does not mean that the company has engaged in anti-competitive behavior nor does it prejudge the outcome of the investigation itself,” reads Firmenich’s statement.

While it cannot comment further at this stage, the company is “fully cooperating” with investigators and monitoring the situation. IFF has also confirmed its cooperation with the investigation.

EU authority has sent out formal requests for information concerning the possibility of a “collusion” between companies.Concerns over possible collusion
The EC is concerned that companies and associations in the fragrance industry worldwide may be “violating EU antitrust rules that prohibit cartels and restrictive business practices.”

The EU authority has also sent out formal requests for information concerning the possibility of a “collusion” between companies.

The EC shares it has been in contact with CMA and COMCO as the inspections were conducted in consultation with them. CMA shares it has also been in touch with the Antitrust Division of the US Department of Justice.

“There is no legal deadline to complete inquiries into anti-competitive conduct. Their duration depends on several factors, including the complexity of each case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence,” explains EC.

“Under EC’s leniency program, companies that have been involved in a secret cartel may be granted immunity from fines or significant reductions in fines in return for reporting the conduct and cooperating with the Commission throughout its investigation.”

By Venya Patel