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Smurfit Kappa declines to comment on price-fixing inquiry

DUBLIN, Ireland (From the Irish Times) -- Smurfit Kappa, Europe's largest cardboard box maker, has declined to comment on a move by Italian competition authorities to raid the local offices of the company as part of an investigation into alleged price-fixing.

Smurfit Kappa, Europe's largest cardboard box maker, has declined to comment on a move by Italian competition authorities to raid the local offices of the company and a number of other paper packaging groups on Friday as part of an investigation into alleged price-fixing.

The Italian Market Competitiveness Protection Authority claims in a 14-page document that it has evidence a number of vertically integrated corrugated cardboard manufacturers - including Smurfit Kappa, DS Smith, Pro-Gest, Laveggia, International Paper and others - co-ordinated sales policies of products in a series of at least eight meetings between 2015 and 2016.

The antitrust authority also alleges that companies under investigation used an informal price list, going back to at least 2012, to apply the same sales prices on products offered to independent box makers. The simultaneous movement by companies to their prices often occurred without any direct connection to rising raw material costs, according to the document.

The companies and trade association, the Italian Group of Corrugated Board Manufacturers, were also involved in "recurring and systematic" exchange of sensitive information on corrugated sheets and boxes on a regular basis, the authority said, citing evidence.

The €4.5 billion annual Italian corrugated containerboard market is continental Europe's second-biggest, after Germany. Smurfit Kappa's consolidated Italian sales amounted to almost €650 million in 2015, the largest player in the market, according to data contained in the authority documents, which a spokeswoman sent to The Irish Times.

"Despite these negative headlines, our initial reaction is not to be overly concerned by this news," said Gerard Moore, an analyst with Investec in Dublin, noting that Italy accounts for an estimated 8 per cent of Smurfit Kappa's sales.

A spokesman for DS Smith confirmed Italian competition officials "conducted an unannounced inspection" at two of its Italian premises and it is "fully co-operating" with the investigation. Pro-Gest declined to comment while Laveggia didn't respond to an e-mail from The Irish Times. The four companies account for 70 per cent of the market. The trade association also didn't respond to a request for comment.


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