Glassmakers hit back after EU’s record fine

Record antitrust fines levied by European Union competition authorities on four glass groups last week could lead to higher glass prices by stifling capital investment, according to the head of one of the penalised glassmakers.

Stuart Chambers, chief executive of Nippon Sheet Glass, Pilkington’s Japanese parent, told the Financial Times that there was “no question” that Pilkington would reduce investment in plant and equipment because of the “astronomical” joint penalty of €1.38bn ($1.75bn).

He also claimed the penalty broke EU rules limiting antitrust fines to 10 per cent of a company’s turnover.

“They’re going so far that they’re in danger of doing the customer a disservice, and that needs to be questioned,” he said.

Brussels said on Wednesday that Pilkington, Saint-Gobain of France, Asahi Glass of Japan and Belgium’s Soliver had conspired to fix prices of windscreens and other automotive glass between 1998 and 2003. Neelie Kroes, EU competition commissioner, said the glassmakers – which controlled 90 per cent of the €2bn European autoglass market – had “cheated the car industry and car-buyers”.

Mr Chambers’ comments echoed criticism by France’s Saint-Gobain, the most heavily penalised of the four companies. It described its €896m share of the fine as “excessive and disproportionate” and said it would appeal to the European courts.

UK-based Pilkington, acquired by NSG in 2006, faces a €370m penalty; Asahi must pay €113.5m; and Soliver faces a relatively modest fine of €4.4m.

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600450 Glassmakers hit back after EU’s record fine
Date: 18 November 2008
Source: Financial

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