The four main glass suppliers to the automotive industry have been fined 1.38bn euros (£1.14bn) by the European Commission.
Asahi Glass, Pilkington, Saint-Gobain and Soliver have been hit with the biggest cartel fine in EU history after being found guilty of ‘cheating’ car buyers. Saint Gobain thought the 896m euros fine it received, the largest cartel fine imposed on a single company was ‘excessive and disproportionate’.
The four companies were penalised for illegal market-sharing and exchanging commercially sensitive information.
The Commission found that they held regular discussions between 1998 and 2003 to allocate glass supplies to car manufacturers and keep their individual market shares as stable as possible.
This news follows the decision last year to fine Guardian, Pilkington, Saint-Gobain and Glaverbel for operating a similar cartel in the European flat glass market. At the time EU Competition Commissioner, Neelie Kroes, stated, “the companies will have done very well out of this cartel until today.”
Interestingly, as the energy surcharge on glass has reduced due to falling oil prices, the main flat glass suppliers in the UK have recently increased their prices by between 18-25% at a time when the window and door industry is struggling with falling demand, intense competition, business failures and decreasing margins.
4 responses so far ↓
1 El Tel // Nov 13, 2008 at 7:58 am
The price increase of 18 - 25% is only the start. The price is due to go up again next month according to a letter that I have seen. Whilst I am all for free enterprise, these cartels are pure greed and the bigger the fine, the better. But the costs of these fines are always passed onto us, the customer. Any ideas on how this can be stopped? It’s not as though we can go to the competition, is it?
2 Terry Jones // Nov 13, 2008 at 8:48 am
You can actually, there is nothing to stop you buying glass in from the states and sacking off Pilkington & SGG!!!!
3 Neil Donaldson // Nov 18, 2008 at 8:43 am
Albeit I am no admirer of how the glass companies have fixed prices (and it has been on going for 30-40 years I am told), they have a strangle hold on the business in the UK. Glass is still cheaper than it was 5 years ago, and most companies who make glass units have benefited from the energy surcharge because they charge the rate the majors did for units (say £4.80m2 for 4mm units) yet in essence the actual sheet glass cost was only £1.82 ! I didn’t see anyone complaining then.
Buying from the states or china is cheaper, but it is in dollars which is now 25% dearer, you pay up front, take a risk on quality and they don’t do soft coats. And wait 8-10 weeks.
The daft thing is that the 20% rises (verses lower e/s) cancel each other out, but when further increases come the glass unit manufacturers will pass on but the window companies will try to absorb fearing losing clients. We are the only industry that fears more losing clients than concentrating on the bottom line. Window companies will take a job on at a loss rather than lose it ! And then wonder why the bank will not lend them cash or creditors are knocking at the door.
Our industry will see a major decline this and next year with no doubt many casualties and we all share concerns about people losing their jobs. But it was coming to the industry, recession or not, and those that differentiate themselves and manage it will come out the other side.
Be different, embrace the increases and the change and manage the process; or go out of business. It will be tough and if your business is debt laden and you haven’t got Anglians bankers then you’re in trouble. Good luck.
4 Terry Jones // Nov 18, 2008 at 8:08 pm
This guy doesn’t know what he is talking about!
They invented softcoat in the states!
Cardinal Glass Corp for instance has soft coated glass that leaves UK products standing!!
the risk is far less dealing with an american company who wont:
A: Rip you off with a surcharge
B: Hike the prices in colusion with other suppliers
C: Give you quality issues like the european manufacturers, US quality is much higher!
Neil, look further than your local Pilkington outlet and you will make some proper money!
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