Bundeskartellamt prohibits joint venture in chemicals trading

The Bundeskartellamt has prohibited Brenntag Germany Holding GmbH, Mülheim/Ruhr and CG Chemikalien GmbH & Co. Holding KG, Laatzen from continuing with their joint venture, CVH Chemie-Vertrieb GmbH & Co. KG. All three companies are active in the trade with chemicals. They are also active on the same regional markets, achieving joint market shares of up to 70 %.

Andreas Mundt, President of the Bundeskartellamt: "If competitors cooperate with one another via a joint venture which is also active on the same market as its parent companies, which should really be competing with one another, this can raise competition concerns. In this particular case our investigations have shown that the joint activity in CVH results in an extensive exchange of information between Brenntag and CG. Economic consideration and coordination are advantageous for the companies and make sense from a commercial point of view. We have found that the joint venture places an inadmissible restraint on competition and have prohibited the further implementation of the CVH partnership agreement."

The companies have been given a suitable period of time to bring their activities in the chemical trading markets in line with competition law. With its decision the Bundeskartellamt is continuing its practice of critically examining joint ventures comprising companies which are in competition with one another.
According to the case-law of the Federal Court of Justice (BGH, decision of 4.3.2008, KVZ 55/07 - Nord-KS), it is generally presumed that business considerations practised among partners and a joint venture are anticompetitive if at least two of the partners and the joint venture are active on the same product and geographic markets. This general presumption has to be reviewed on a case by case basis.

Examination proceedings were initiated against the joint venture CVH in 2008 after a cartel proceeding against twelve companies involved in the chemicals trade had revealed extensive corporate links between the companies. Among the companies participating in the cartel were Brenntag, CG and CVH (cf. Bundeskartellamt press release of 7 December 2010). This proceeding has since been concluded with fines imposed against the companies.

The decision is not yet final. The companies have a month to appeal the decision to the Düsseldorf Higher Regional Court.