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UPM-Kymmene Wins $7.6 Million Reduction of Bag-Cartel Fine

UPM-Kymmene Oyj (UPM1V), Europe’s second- biggest papermaker, won a 5.8 million-euro ($7.6 million) reduction of a European Union antitrust fine for unlawfully fixing prices with competitors in an industrial bags cartel.

The EU’s General Court cut to 50.7 million euros a penalty imposed in 2005, the biggest fine among 16 companies punished for colluding on prices of plastic bags used for industrial products.

The UPM-Kymmene fine was reduced because it couldn’t be held liable for the cartel prior to October 1995, according to the ruling by the Luxembourg-based EU court today.

Fines on FLSmidth & Co. A/S and its FLS Plast unit were also reduced to 14.45 million euros from 15.3 million euros. The court rejected arguments that they weren’t liable to pay part of the penalty imposed on their subsidiary Trioplast Wittenheim SA.

“The fine decreased as the court estimated the duration of the infraction shorter than in the original decision,” Petri Meurman, senior group legal counsel for Helsinki-based UPM- Kymmene, said today by phone. He declined to comment on a possible appeal.

Decisions by the EU General Court can be appealed to the EU Court of Justice, the region’s highest tribunal. FLSmidth, based in Copenhagen, said it will study the decision in detail before deciding whether to challenge decisions concerning its liability.

Kendrion NV (KENDR) and its former unit Fardem Packaging BV last year lost court appeals against fines in the same cartel. Low & Bonar Plc (LWB) and its Bonar Technical Fabrics unit won a reduction of its fine to 9.2 million euros from 12.2 million euros.

British Polythene Industries (BPI) Plc, based in Greenock, Scotland, escaped a fine because it was the first to provide the commission with “decisive evidence” about the cartel, the EU said at the time.

UPM-Kymmene exited the business when it sold a unit to Rheinische Kunststoffwerke GmbH of Germany in December 2000. The company made industrial sacks in Finland and France.

The cases are T-53/06, T-64/06 and T-65/06.

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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