Four of the world’s biggest fragrance companies are under investigation by antitrust authorities in Switzerland, Europe, the UK and the US.
The quartet of Switzerland’s Firmenich and Givaudan, US-headquartered International Flavors & Fragrances (IFF) and Germany’s Symrise are suspected of collusion.
According to the Swiss Competition Commission (COMCO), there are indications that several undertakings active in the production of fragrances have violated cartel law.
These, it said, may have coordinated the four companies’ pricing policy, prohibited their competitors from supplying certain customers and limited the production of certain fragrances.
Dawn raids were conducted at various locations, with COMCO working in consultation with the European Commission, the US Department of Justice Antitrust Division and the UK Competition and Markets Authority (CMA).
“Dawn raids started on Tuesday 7 March 2023,” a spokesperson for COMCO told Cosmetics Business.
“At the sites of Firmenich and Givaudan in Geneva we were looking for evidence which might confirm our suspicions for collusion in the fragrance market.”
The European Commission confirmed that it had carried out 'unannounced inspections' in the fragrance sector in various member states.
Meanwhile, the UK’s CMA said in a statement that: “Following a period of investigation and information gathering, the CMA may issue a statement of objections if it comes to the provisional view that competition law has been infringed –at this stage, no assumptions should be made about whether competition law has been broken.”
Fragrance companies 'fully cooperating'
Firmenich, which is currently merging with Dutch chemicals group DSM, confirmed in a statement that, as part of COMCO’s investigation, unannounced inspections were carried out at its offices in France, Switzerland and the UK.
“Unannounced inspections are a preliminary step in antitrust investigations into suspected infringements of competition rules,” the statement read.
“This does not mean that the company has engaged in anti-competitive behaviour, nor does it prejudge the outcome of the investigation itself.
“Firmenich is closely monitoring the situation and is fully cooperating with the investigators.”
It added that the company will not be providing further comment at this stage.
Symrise similarly issued a statement, saying: “Symrise is cooperating fully with the authorities.
“At present, precise details and concrete content on this investigation are still pending.”
A representative of IFF, meanwhile, told Cosmetics Business that the comapny is working closely with the relevant authorities and cooperating with their industry investigation.
A Givaudan spokesperson said: “I can confirm that we are part of an industry-wide investigation by European and Swiss authorities.
“As a good corporate citizen, Givaudan is fully cooperating with the authorities.
“As the investigation is ongoing, we cannot disclose any further details.
“Givaudan is committed to and adheres to the highest ethical standards in business conduct as set out in our Principles of Conduct.”
How might the investigation unfold?
COMCO said the investigation will examine whether there have indeed been restrictions of competition prohibited by cartel law.
The COMCO spokesperson told Cosmetics Business that the fragrance investigation constitutes a large-scale one, given the international nature of the case.
They added that, given its complexity, the investigation would probably last for two or three years.
“If the suspicions are confirmed, the companies concerned may be fined; the sanction can amount to up to 10% of the turnover in Switzerland over the last three financial years.”
As for the potential impact on the wider industry, if COMCO’s suspicions are confirmed: “Clients may have paid excessive prices and competitors may have been limited in their sales opportunities,” the spokesperson said.