Seoul Gazette - Fragrance firms hit by price cartel probe

The Swiss Competition Commission COMCO said dawn raids took place "at various locations" in consultation with European Union, US and British antitrust authorities.

The commission said Swiss firms Firmenich International and Givaudan, US peer International Flavors & Fragrances and Germany's Symrise -- among the biggest companies in the sector -- were being investigated over suspicions of violating cartel laws.

Fragrances and flavours are used in a long line of products, from fine perfumery and cosmetics to shampoos and detergents and food products, in a multi-billion dollar market.

The announcement came after Brussels antitrust investigators said Tuesday they had raided several fragrance companies across Europe over cartel suspicions, without divulging the company names.

Firmenich, one of the world's biggest flavour and perfume manufacturers, confirmed Wednesday that its offices in France, Switzerland and Britain had been subjected to "unannounced inspections ... as part of an industry wide investigation."

"Firmenich is closely monitoring the situation and is fully cooperating with the investigators. We are unable to comment further at this stage," a company spokesman told AFP.

Industry giant Givaudan also acknowledged it was part of the investigation, and said it was "fully cooperating with the authorities".

"Givaudan is committed to and adheres to the highest ethical standards in business conduct," a spokeswoman said.

- Coordinated pricing? -

In its statement, COMCO said that there were suspicions that the companies targeted "have coordinated their pricing policy, prohibited their competitors from supplying certain customers and limited the production of certain fragrances."

"In the course of the investigation, it will be examined whether there are indeed restrictions of competition prohibited by cartel law," COMCO said, adding that "the presumption of innocence applies to the undertakings."

The European Commission, the EU's powerful antitrust authority, said Tuesday that its teams carried out unannounced inspections "at the premises of companies and an association active in the fragrance industry in various member states" after consulting US, UK and Swiss competition regulators.

It did not say which companies investigators -- joined by competition authorities of each member state affected -- had raided or which countries were involved.

"The Commission has concerns that companies and an association in the fragrance industry worldwide may have violated EU antitrust rules that prohibit cartels and restrictive business practices," it said in a statement.

- Billions in sales -

If the companies raided are guilty of running a secret cartel they face large fines but can be granted immunity if they cooperate with the commission, it said.

Founded in 1895, Firmenich is a family business behind famous perfumes including Angel by Thierry Mugler, Armani's Acqua di Gio and Kenzo's Flower, and is also in the process of merging with Dutch firm DSM to create a major fragrance company.

The company last month announced that its revenues for the first six months of its 2022-2023 fiscal year had swelled 10.5 percent to 2.4 billion Swiss francs ($2.5 billion), despite inflation pressures on its food stuffs business.

Givaudan reported more mixed results in 2022, as it was pulled between a surging luxury perfume market and drooping flavour sales as US consumption dwindled, but its annual sales grew 6.5 percent to over seven billion francs.

In the US, International Flavors & Fragrances raked in revenues of $12.4 billion in 2022, while Symrise posted sales of 4.6 billion euros last year.

L. Pchartschoy--BTZ