Fragrance makers under investigation

The European Commission has begun investigating fragrance ingredient manufacturers for possible anticompetitive practices that could hurt buyers of their products. The EC, along with authorities in Switzerland and the UK, carried out raids on March 7 to collect evidence at the premises of some of Europe’s biggest fragrance ingredient firms. The US Department of Justice’s Antitrust Division is also involved in the probe.

In addition to the raids, the EC says it has sent formal requests for information to several companies in the sector. International Flavors & Fragrances, Firmenich, Givaudan, and Symrise have confirmed to C&EN that they are part of the investigation, and all say they are cooperating fully with authorities.

The Swiss competition commission says it “has indications that several undertakings active in the production of fragrances have violated cartel law.” It adds that “there are suspicions that these undertakings have coordinated their pricing policy, prohibited their competitors from supplying certain customers and limited the production of certain fragrances.” Swiss authorities say they will examine whether competition in the fragrance sector has been restricted in ways prohibited by cartel law.

Similarly, the UK’s Competition and Markets Authority says it “has reason to suspect” fragrance ingredient makers of anticompetitive behavior. The investigation relates to ingredients used in consumer goods such as household and personal care products, it states.

Not everyone is convinced the investigation is necessary. “I sincerely believe there is no sign of any price-fixing behavior,” says Alain Frix, owner of Allchemix, a Belgian consulting firm focused on ingredients for fragrances, flavors, and cosmetics. “I am quite surprised about this antitrust inquiry since the fragrance houses are fighting a big battle for market share.”