The three Bharat Forge companies stand among several aluminium forging companies in Germany that will have to pay an accumulated value of € 175 million for "engaging in illegal competitive agreements.”
In connection with two separate proceedings, Bundeskartellamt (Federal Cartel Office), Germany's national competition regulator declared the penalty on Bharat Forge Aluminiumtechnik GmbH, Bharat Forge CDP GmbH, and Bharat Forge Global Holding GmbH.
Bharat Forge commented on the issue by saying: “The investigation in the above two matters pertained to the period between 2004 and 2018 and were initiated by FCO against several companies in Germany. Our German subsidiaries were among many such companies.”
Andreas Mundt, President of the Bundeskartellamt, said: “For many years the companies had worked towards the mutual aim of passing on rising costs to their customers to avoid disadvantages caused by increased costs. For this purpose, senior staff members of the forging companies met regularly and exchanged information on cost factors which are very substantial price components. They encouraged one another to pass on possible increases to their customers.”
“The companies were in general agreement that their respective procurement costs and cost increases would be passed on to their customers. At their meetings senior staff members regularly exchanged information on individual costs incurred in their procurement processes and on increased costs for aluminium, energy, and the processing of aluminium into an input material suitable for forging”, Bundeskartellamt said in a statement.
Bundeskartellamt added: “The companies’ representatives also discussed how these costs could be passed on to customers and informed each other on the progress they had made in this respect. They also agreed to calculate lifetime reductions only based on their value creation process and not to apply such reductions to procurement costs as well. Lifetime reductions, referred to as “ratio” by the parties involved, are usually agreed once a supply relationship is started and are meant to take account of future productivity gains.”
Popular automotive suppliers and manufacturers are among the vital customers of the forging companies as well as companies active in many other business segments, especially motorcycle production.
“While setting the penalty, the Bundeskartellamt took into account in favour of Bharat Forge Aluminiumtechnik GmbH and Presswerk Krefeld GmbH & Co. KG that the leniency applications filed by these companies, later on, had substantially helped to prove the alleged offence, and that they had cooperated with the authority in uncovering the infringements. These two companies have acknowledged the alleged offence and agreed to a settlement”, Bundeskartellamt further added.
Bharat Forge added: “The German subsidiaries of Bharat Forge have settled for an aggregate amount of €32 million to be paid over the next five years. The final settlement for Bharat Forge Aluminiumtechnik GmbH was signed earlier today; the settlement for Bharat Forge CDP GmbH and Bharat Forge Global Holding GmbH is in the final stage and expected to be signed early next year.”
The fining decisions are yet to be finalized and can be appealed to the Düsseldorf Higher Regional Court.
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