Five recyclers implicated in possible lead scrap cartel

Europe – In its attempt to fight price-fixing, the European Commission has sent statements of objection to five lead recyclers suspected of having operated a cartel in the market for recycling lead from used car batteries. Among the companies being investigated are Recylex and Eco-Bat.

Between 2009 and 2012, it is alleged that the five companies agreed prices for scrap lead-acid car batteries in Germany, France, the Netherlands and Belgium. ‘Unlike in most cartels where companies usually conspire to increase their sales prices, the companies in this case appear to have colluded to reduce their purchase prices,’ states the European Commission.

According to the Commission, the main goal of the cartel members was to maintain higher profit margins. ‘The cartel members may have lowered the prices paid to scrap dealers, many of which are small and medium-sized companies,’ it states. ‘This would then feed through in lower prices for used batteries sold for scrap, ultimately to the detriment of sellers.’ The result, the Commission alleges, was the same as in any price-fixing cartel – that is, ‘disrupting the normal functioning of the market and preventing competition on price’.

The Commission underlines that artificially fixing the price of lead from batteries is ‘a very serious matter because it interferes with the effective functioning of the recycling market’. And it adds: ‘Car battery recycling essentially functions in a closed-loop cycle but the behaviour of these companies would interfere with this loop and affect the circular economy.’

The European Commission puts a very high priority on its work in this area ‘because of the serious harm cartels cause to consumers and businesses, and the huge damage cartels inflict on the economy as a whole in terms of removing incentives to compete on prices or to innovate’, stresses EU commissioner for competition Margrethe Vestager.

The parties involved have been given the opportunity to respond to the Commission’s allegations. Recylex confirms to Recycling International that it has ‘fully co-operated with the European Commission in connection with this inquiry’. The company is studying the content of this confidential document with its lawyers to determine the implications. ‘This statement of objections is a preliminary stage, which does not prejudge the outcome of the procedure,’ stresses Recylex. ‘A response will be provided to the European Commission during the second half of 2015.’

If the allegations are proved, the recyclers could risk multi-million Euro fines. Last week, the European Commission imposed fines totalling over Euro 115 million on 10 companies for running cartels in retail food packaging; eight manufacturers and two distributors ran five separate cartels relating to trays used for retail packaging of foodstuffs such as cheese, meat, fish and cakes.