The Bundeskartellamt has imposed fines totalling close to 208 million euros against 7 liquefied gas suppliers and their directors on grounds of customer protection agreements. The companies involved are:

Drachen-Propangas GmbH, Frankfurt
Friedrich Scharr KG, Stuttgart
Progas GmbH & Co KG, Dortmund
Primagas GmbH, Krefeld
Sano-Propan GmbH, Nuremberg
Tyczka Energie KGaA und Tyczka Totalgaz GmbH, Geretsried

Proceedings are still pending against four other companies. The companies are active in the supply of private and commercial customers with liquefied gas in small tanks (up to 5.6 t) or bottled gas. Among the companies involved are the German subsidiaries of suppliers of liquefied gas and mineral oil active in many European countries.

The President of the Bundeskartellamt, Dr Heitzer, stated: “After the Bundeskartellamt’s search we have no doubts about the intent of the accused liquefied gas suppliers. Here we have a customer protection agreement with a similar effect to that of a territorial agreement, with even individual elements of price agreements.”

An evaluation of the documents and files seized during the search of the companies in May 2005 (cf. Bundeskartellamt press release of 4 may 2005) has revealed that the leading liquefied gas suppliers, especially the members of the German Liquefied Gas Association (DVFG), had agreed, at least since 1997, not to poach customers from one another. Customers of rival companies were not allowed to be poached by the staff of other suppliers. Customers wishing to switch supplier were either not quoted a price at all or if so, an excessive “deterrent price”. The cartel agreement in the tank gas business was secured by a system of “notification of competition”: Information was exchanged about enquiries from customers and compensation was mutually offered in the event of a successful change of supplier. The report centre was the transport company, Transgas, which was jointly operated by several cartel participants. In the case of bottled gas so-called bottle pools formed the basis of the customer protection agreement. As a consequence the prices of the companies participating in the agreement, i.e. around half of the German market, reached levels well above those of smaller, so-called independent suppliers. Although liquefied gas as a product is equally homogeneous as, e.g. heating oil, there were price differences of up to 100 per cent as a result of the cartel.

The President of the Bundeskartellamt, Dr Heitzer, stated: “For many years consumers have been considerably harmed by the customer protection agreements. This is particularly true for customers who use rented tanks from the incumbent liquefied gas suppliers and were at the mercy of the suppliers’ excessive prices.”

As the violations occurred before the new guidelines on the setting of fines came into effect, the Bundeskartellamt has calculated the fines based on the old system of determining the additional proceeds. In doing so it took the prices of the independent suppliers as a standard for calculating the considerable additional proceeds generated by the cartel. In a hearing in accordance with the due process of law the companies argued that such high fines would jeopardize their existence. The Bundeskartellamt has taken account of the economic efficiency of the companies concerned but also points out that without exception the parent companies behind the companies involved are financially strong and in a position to secure their market positions in Germany even after paying the fines.

The orders imposing the fines are not yet final. The persons and companies concerned can appeal against the decisions at the Düsseldorf Higher Regional Court.