The European Commission has informed Alcogroup S.A. and its subsidiary Alcodis S.A. (together ‘Alcogroup’) as well as Lantmännen ek för and its subsidiary Lantmännen Agroetanol AB (together ‘Agroetanol’) of its preliminary view that, together with Abengoa S.A. (‘Abengoa’), which settled the case in December 2021, they have breached EU antitrust rules. The Commission considers that the companies colluded to influence the wholesale price formation mechanism for ethanol in Europe.
Alcogroup and Agroetanol decided not to settle this cartel case with the Commission. As a result, the Commission’s investigation against the two companies is being carried out under the standard cartel procedure.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said:
Today’s Statement of Objections sets out our preliminary concerns that Alcogroup and Agroetanol, together with Abengoa, may have colluded in the past to influence price benchmarks for ethanol. This is illegal under our competition rules. We are concerned that the companies’ conduct harmed competition in the market for the supply of biofuels, which contribute to the reduction of greenhouse gas emissions. With artificially inflated biofuel prices, Green Deal objectives are also undermined.
Statement of Objections on the companies’ alleged cartel in relation to ethanol benchmarks
Ethanol is an alcohol made from biomass (e.g. wheat, maize or sugar beet) that, when added to gasoline, can be used as a biofuel for motor vehicles. The port of Rotterdam and the Amsterdam-Rotterdam-Antwerp barge market are the most important trading locations for ethanol in Europe.
Alcogroup, Agroetanol and Abengoa are all ethanol producers. S&P Global Platts (‘Platts’), a price reporting agency that provides assessments for different commodity markets, including ethanol, takes the trading activity in this area into account for establishing its ethanol benchmarks, which are used as reference prices in the industry. To set its ethanol benchmarks, Platts uses a price assessment process called ‘Market on Close’ (‘MOC’). This process is based primarily on information (e.g. bids, offers and trades) collected from market participants during the day and, in particular, during the time interval between 16:00 and 16:30 London time, which is known as the ‘MOC Window’.
The Commission preliminarily found that Alcogroup and Agroetanol, together with Abengoa: (i) coordinated their trading conduct in the MOC Window and (ii) agreed to limit the volumes of ethanol in the Rotterdam area so that they would not be sold in the MOC Window, in line with their common plan to artificially increase, maintain and/or prevent from decreasing the level of Platts’ ethanol benchmarks. The companies expected that this would lead to higher prices for their ethanol sales under the ethanol supply contracts with their customers referenced to those benchmarks.
The Commission preliminarily found that traders from Alcogroup and Agroetanol, together with Abengoa, had illegal contacts with each other in the form of instant messaging communications or by email.
If the Commission’s preliminary view is confirmed, the conduct of Alcogroup and Agroetanol would infringe Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the European Economic Area (‘EEA’) Agreement.
Sending a Statement of Objections does not prejudge the outcome of the investigation.
Background
Article 101 TFEU and Article 53 of the EEA Agreement prohibit cartels and other restrictive business practices.
The Commission’s investigation started with inspections in May 2013, October 2014, and March 2015. In December 2015, the Commission opened a formal investigation against Alcogroup, Agroetanol and Abengoa, together with their relevant subsidiaries. The Commission adopted a settlement decision against Abengoa in December 2021, which does not prejudge the outcome of the ongoing procedure against Alcogroup and Agroetanol. Abengoa is therefore not an addressee of this Statement of Objections.
A Statement of Objections is a formal step in the Commission’s investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The parties can then examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their views on the case before representatives of the Commission and national competition authorities.
If the Commission concludes, after the parties have exercised their rights of defence, that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of a company’s annual worldwide turnover.
There is no legal deadline for the Commission to complete antitrust inquiries into anticompetitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence.
For More Information
More information will be made available under the case number AT.40054 in the public case register on the Commission’s competition website. For more information on the Commission’s actions against cartels, see its cartels website. A periodic compilation of antitrust and cartel news is available in the Competition Weekly News Summary.
Source – EU Commission