EU fines "paraffin mafia" wax makers' cartel

By Paul Taylor

BRUSSELS (Reuters) - The European Commission fined nine petrochemicals companies a total of 676 million euros (536.2 million pounds) on Wednesday for forming a "paraffin mafia" to fix prices and carve up markets for paraffin wax.

"There is probably not a household or company in Europe that has not bought products affected by this 'paraffin mafia' cartel, with all that implies in terms of paying over the odds, higher costs and economic damage," EU Competition Commissioner Neelie Kroes said.

Paraffin waxes are used in a wide range of products from candles to paper cups and plates, the wax coating of cheese, chemicals, tyres and chewing gum.

The biggest individual fine of 318.2 million euros was imposed on Sasol of South Africa and Germany, which the European Union executive described as the leader of the illegal cartel, an official statement said.

Anglo-Dutch oil major Shell escaped a potential fine of 96 million euros because it blew the whistle first to the EU competition authorities.

Kroes said the cartel was known inside Shell as the "paraffin mafia" and in Sasol as "Blauer Saloon" (Blue Saloon) after the hotel bar in Hamburg, Germany, where the first meetings of executives from the companies were held.

It was a very serious infringement of EU treaty antitrust rules, compounded by the duration of the cartel, she said.

It was the fourth-highest fine ever imposed by EU regulators on a sector, topped only by the record 992.3 million euros on elevator companies last year, 790.5 million on makers of vitamins in 2001 and 750.5 million on manufacturers of gas insulated switchgear in 2007.