US authorities stop investigation into antitrust violations by labelstock manufacturers

Juha Niemelä

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Authorities in the United States have stopped their investigations into allegations of a price-fixing cartel by manufacturers of labelstock. The decision came after no sign of wrongdoing was found in the activities of the companies involved.
      The decision is a relief to Juha Niemelä, former CEO of the Finnish paper manufacturer UPM - even though he had been granted immunity in the case.
     
Suspicion of a cartel in the manufacture of labels sparked worldwide investigations in 2004 against a number of European and North American pulp and paper companies. They were suspected of having violated antitrust legislation by fixing prices in labelstock and other paper products in both Europe and North America.
      The affair began four years ago when UPM tried to buy MACtac, a manufacturer of labels and a subsidiary of the US company Bemis. The deal was set at EUR 428 million.
      US officials rejected the deal, which came as a complete surprise to UPM. In addition to denying permission for the deal, officials began to investigate ties between various label makers.
      The suspicions stemmed from the fact that UPM and its competitor, the US company Avery Dennison, were trading with each other.
     
UPM's Board of Directors was alarmed by the investigations, because courts in the United States are known to mete out heavy punishments for antitrust violations, including long prison terms. In Europe, companies, and not individuals, are punished in such cases.
      Other Finnish paper companies that were investigated included Stora Enso, Metsäliitto, and Myllykoski.
     
European competition authorities have concluded their investigations into allegations of improprieties in the sale of fine grades of paper, because there were no indications that any laws had been broken. Investigations concerning newspaper and magazine paper remain unfinished.
      The Finnish Competition Authority is investigating suspicions of illegal cooperation in the acquisition of wood by Finnish paper companies.
      Allegations of a wood acquisition cartel led to Niemelä's resignation from UPM in January 2004.


Previously in HS International Edition:
  No charges against Finnish pulp and paper company UPM in US cartel investigation (21.2.2006)
  Finnish forest companies face class-action suit in USA (11.6.2004)
  Competition Authority refuses to hand over documents in forest industry cartel case (7.6.2004)
  Police raid offices of numerous forest companies over cartel suspicions (26.5.2004)
  Minister Pekkarinen sees paper cartel allegations as blow to Finnish reputation (28.5.2004)
  Juha Niemelä unexpectedly resigns as CEO of UPM-Kymmene (30.1.2004)

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