COMPETITION : COURT REDUCES DELTAFINA'S FINE IN TOBACCO CARTEL CASE.

The European Commission has failed to establish that Deltafina, fined for its involvement in a cartel on the Spanish tobacco market in 2004, acted as leader of that cartel, ruled the EU General Court, on 8 September(1). The fine imposed on the firm was therefore reduced from 11.88 million to 6.12 million.

The EU executive imposed fines totalling 20 million on five companies - Compania espanola de tabaco en rama (Cetarsa), Agroexpansion, World Wide Tobacco Espana (WWTE), Tabacos Espanoles and Deltafina - for their practices of fixing prices paid to tobacco producers and sharing out quantities purchased from the producers between 1996 and 2001.

GUILTY BUT NOT LEADER

The main activities of Deltafina, an Italian firm wholly owned by the American company Universal Corp, are the processing of raw tobacco and the marketing of processed tobacco. It was fined the highest amount (11.88 million) owing to its role as leader of the cartel. The company applied to the EU General Court for annulment of the Commission's decision or a reduction of its fine.

The Luxembourg-based court rejected Deltafina's arguments concerning annulment of the decision, but held that it had infringed the prohibition on anti-competitive agreements. The court noted that, although Deltafina was not present on the Spanish market for raw tobacco, as the main customer of the tobacco processors it was active on the market immediately downstream, on...