Ardagh Glass, the firm controlled by Irish financier Paul Coulson, has become embroiled in an EU investigation into possible price-fixing in the glass bottle market, writes Jamie Smythin Brussels.
The European Commission said yesterday it would examine allegations by a wine and spirits group that a "virtual monopoly of suppliers" in the industry was causing a dramatic increase in prices. It will also examine complaints that industry concentration had led to a shortage of stock and the ending of some product lines.
A letter sent by the European Federation of Wine and Spirits Importers and Distributors (EFWSID) to competition commissioner Neelie Kroes says the situation has become extremely alarming for the industry.
It says that about 95 per cent of the European industry is controlled by just three companies: Ardagh Glass, US firm Owens-Illinois and the French company Saint-Gobain.
The letter alleges that prices of glass bottles have jumped by up to 30 per cent, which is seriously endangering the organisation of production tools in the EFWSID's member firms.
Jean-Jacques Delhaye, director of the EFWSID, told The Irish Times yesterday that consumers were suffering because the price hikes were being passed on to customers.
"There are only really three big companies producing bottles now and we have seen prices go up by 30 per cent. Some years ago there were 65 producers," he added.
A spokesman for Ms Kroes confirmed the commission had received the complaint and would "have a close look at the allegations which are made in the letter".
Ardagh Glass last night strongly rejected any accusation that there was a monopoly in the glass bottle sector that was causing an increase in the price of bottles.
"It is utter nonsense that just three companies control the glass bottle market and the increase in price reflects higher costs for labour, materials and environmental compliance," said a source close to the company.
Ardagh Glass operates 22 glass plants in seven countries. It also owns the engineering firm Heye-International and is one of the biggest players in Europe.
Paul Coulson bought out fellow shareholders in Ardagh Glass in 2005 in a complicated deal that boosted the stake of his private investment vehicle, Yeoman International, to 45 per cent. Mr Coulson also bought a 25 per cent stake in Ardagh Glass in his own right as part of this transaction. In May the credit ratings agency Moodys upgraded Ardagh Glass in light of an improvement in its trading position and its €660 million takeover of Rexam, the world's biggest drinks can manufacturer.
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