European news in brief – January 2008

Fixed price rubber meets an adhesive end, while the milk price hike affects supermarket retailers.

Moral Elasticity

Dow chemical, Dupont and Eni have been fined a total of $358 million, by the European Commission, for fixing the price of transmission belts, shoe soles and condoms. Allegedly, the companies are said to have met regularly, discussing prices and sensitive market information, which in return acted against the interests of customers, to devalue competition and extract higher returns, since 1993-2003.

Eni’s penalty was raised 60 per cent, for being a repeat offender, whereas Dow and Dupont received 25 per cent less, due to cooperating with enquiries.
Bayer, a German chemical firm, was identified as member of the international syndicate; however, the European commission granted immunity to the firm, due to rules that suspend fines for the first company to blow the whistle on such activity.

Several facilities have been raided, since the EU investigation began in 2003. The EU competition commission can levy fines as high as 10 per cent of a company’s annual turnover, according to European law.

Pension Probe

Investments can cause social, environmental and governance concerns, according to the FairPensions Campaign group, who showed staff pension funds from UK firms such as Barclays, BAE Systems and National grid, coming last in their study. The rating investigated the fund manager’s knowledge as far as ethical issues are concerned, and how much information is disclosed regarding where the funds are invested.

Cheese Cheaters

UK Supermarkets Sainsbury and Asda fell short of achieving their goal of maneuvering dairy prices, to an increase, by being fined a multi-million pound total. The UK price fix, 2001-2002 added approximately three pence to a pint of milk, and a staggering 15 pence to each pack of butter.
Sainsbury chief executive Simon King, Suggested the £270 million extracted from the unaware shoppers was aimed to help farmers, although there can be no evidence found in the OFT investigation.

Swedish Statement

Swedish based firms, fully or partly state homes will now adopt a mandatory sustainability report, based on the Global Reporting Initiatives G3 Guidelines. The report, starting from 2009, is to include details of human rights, environment and gender equality.
Swedish based firms, Vattenfall and OMX will be included, who employ a total of 190,000 employees.

Agency Underclass

A threat to UK and German labour markets has caused the failure of the European Unions plans to give temporary workers benefits such as pay, holiday and pension rights, the same as full time employees.

The UK confederation of British industry warned that the measure would have 250,000 jobs at stake; however the trade unions accused the government of allowing the temporary workers to become the “underclass”.

Google, Vodaphone and 18 other top firms to be enlisted by UK Prime Minister Gordon brown, by 2015, to meet the millennium development goals.

German targets of reducing carbon emissions of 40% by 2020, may become realistic after passing 14 new laws.

Drug maker Pfizer and chemist Allianceboots are under investigation by the UK competition authorities to establish whether exclusive distribution deals are affecting the prices for the NHS.

British gas raise prices, causing ‘fuel poverty’ throughout the UK