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European Commission Investigates Cartel-Like Practices in the Fragrance Industry

Published March 14, 2023
Published March 14, 2023

The European Commission has confirmed it carried out unannounced inspections of the premises of suppliers and one association active in the fragrance industry in numerous member states. Concurrently the Commission sent out formal requests for information to several companies. The intent of both actions is related to possible collusion in the supply of fragrances and fragrance ingredients related to potential overcharging and other anti-competitive practices.

The Commission is concerned about companies violating EU antitrust rules prohibiting cartels and restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union). Commission officials have also consulted their counterparts in the Antitrust Division of the US Department of Justice, the UK Competition and Markets Authority, and the Swiss Competition Commission.

Those involved include Swiss companies Firmenich International SA, Givaudan SA, Symrise AG, and the US group International Flavors & Fragrances Inc. Collectively, they possess an estimated 60% market share with combined annual revenue of over $21 billion.

These types of raids can be a precursor for a fine for violating EU antitrust rules of as much as 10% of a firm's global turnover. While the firms are under suspicion, they have not yet been found of any wrongdoing, and all four have said they are cooperating with investigators.

This investigation comes amid a potential $42.5 billion merger between privately owned Firmenich and the Dutch ingredients and bioscience group DSM. The deal was approved by DSM shareholders in January and would form the largest maker of fragrances with revenue of more than $11.6 billion. When the merger was announced, executives from both companies said they didn’t expect any antitrust issues with regulators.


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