‘Paraffin mafia’ busted

Companies that participated in a cartel for paraffin wax in the European Union have been fined a total of more than €676m by the European Commission.


Companies that participated in a cartel for paraffin wax in the European Union have been fined a total of over €676m (£529m) by the European Commission.


The nine companies concerned – ENI, ExxonMobil, Hansen & Rosenthal, Tudapetrol, MOL, Repsol, Sasol, RWE and Total – all took part in the cartel between 1992 and 2005.


Shell also participated but was not fined because it revealed the existence of the cartel to the Commission.


Paraffin waxes are used in a variety of products such as candles, waxed paper, paper cups and plates, the wax coating on cheese, chemicals, tyres and car components as well as in the rubber, packaging, adhesive and chewing gum industries. The market is worth almost €500m.


The infringement committed by ExxonMobil, Sasol, Shell, RWE and Total also related to slack wax sold to end users on the German market. Slack wax, the raw material required for the manufacture of paraffin waxes, is produced in refineries as a by-product in the manufacture of base oils from crude oil.


In the Shell group, the cartel was called ‘paraffin mafia’ and in the Sasol group, ‘Blauer Salon’ (‘blue saloon’), after a hotel bar in Germany where the first meetings of the cartel took place.


Neelie Kroes, competition commissioner, said: ‘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.’


The Commission investigation started with surprise inspections in April 2005, prompted by an application for immunity lodged by Shell.