The European Commission fined Lantmännen ek för and its subsidiary Lantmännen Biorefineries AB (formerly named Lantmännen Agroetanol AB) around €47.7 million for participating in a cartel concerning the wholesale price formation mechanism for ethanol in Europe.
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This decision follows the adoption of a settlement decision against Abengoa in 2021 and the closure of proceedings against Alcogroup in 2023.
Ethanol is an alcohol made from biomass (such as wheat, maize or sugar beet) that, when added to gasoline, can be used as biofuel for motor vehicles.
The port of Rotterdam and the Amsterdam-Rotterdam-Antwerp barge market were the most important trading locations for ethanol in the European Economic Area (‘EEA') at the time of the infringement.
S&P Global Platts, a company that provides price assessments for different commodity markets, used a price assessment process called ‘Market on Close' (‘MOC') to establish its ethanol benchmarks, which were widely used as reference prices in the industry.
The key period for Platts' price assessment process was the time between 16:00 and 16:30 London time (called ‘the MOC Window).
Lantmännen is the largest ethanol producer in the Nordic region and referenced most of its ethanol sales contracts to the monthly average of Platts' ethanol benchmarks during the infringement period.
Therefore, the level of Platts' ethanol benchmarks could directly influence the revenues that Lantmännen received from its ethanol sales during that period.
The Commission's investigation revealed that Lantmännen, together with two other companies:
• Coordinated its trading conduct on a regular basis before, during and after the MOC Window.
• Agreed to limit the supply of physical ethanol in the Rotterdam area that could end up in the MOC Window.
• Exchanged commercially sensitive information in order to implement the coordinated behaviour.
This conduct was based on a common plan aimed at artificially increasing, maintaining and/or preventing from decreasing the level of Platts' ethanol benchmarks.
Lantmännen expected that this would lead to higher prices for its ethanol sales under the ethanol supply contracts that were referenced to those benchmarks. Illegal contacts took place between traders typically in the form of chats.
The Commission's investigation showed that Lantmännen participated in a single and continuous infringement of Article 101(1) of the Treaty on the Functioning of the European Union (‘TFEU') and Article 53(1) of the Agreement on the ‘EEA, which covered the entire EEA. Lantmännen's involvement lasted from 14 November 2012 to 25 March 2014.
In setting the level of the fine, the Commission took into account, in particular, the sales value achieved by Lantmännen in the EEA based on certain sales of physical fuel-grade ethanol referenced to Platts' ethanol benchmarks, the serious nature of the infringement, its geographic scope and its duration.
The fine imposed on Lantmännen totals around €47.7 million.