The European Commission today announced that it had decided to fine BPB €138.6 million (£88.8 million) out of a total European gypsum industry fine of €478.3 million (£306.6 million) for alleged breaches of competition law under Article 81 of the Treaty of Rome.

BPB has not participated in any cartel and intends to appeal against the level of its fine, which is wholly inappropriate and disproportionately high. None of the Commission’s findings relate to any of the group’s on-going activities or business practices, nor do the facts support any finding of BPB’s participation in any cartel in the past. In short, BPB believes that the Commission’s case lacks the evidence necessary to substantiate its claims.

The group has been actively co-operating with the Commission throughout its four-year investigation and is disappointed that it has rejected, without justification, much of what BPB has said to it. The Commission’s general allegation that BPB participated in a long-running cartel in the principal EU plasterboard markets are based upon supposition and contrived explanations unsupported by the facts. It has not taken into account the wealth of economic evidence of vigorous price competition for market share which is inconsistent with the Commission’s findings, nor the lack of any tangible effect of the supposed infringements on the markets concerned. Throughout the 1990’s European plasterboard prices to customers in fact fell substantially in real terms.

While there was within the industry, on an irregular basis, a general exchange of straightforward, highly aggregated and historical sales volume data for certain markets, this was against the background of the absence of any statistics on market size for the industry as a whole. The industry objective was simply to have some data on the overall size and rate of growth in the markets concerned.

BPB is also disappointed that the Commission has seen fit to take into account as an aggravating factor the imposition of a fine on one of its former Dutch subsidiaries, BPB De Eendracht, for a previous infringement in the cartonboard sector in 1994. The subsidiary concerned played no role in the infringing activities other than being a member of the trade association concerned. Moreover, the fine of €1.75 million was reduced on appeal to €0.75 million (£0.5 million).

The total amount of the group’s fine will be charged as an exceptional item in the accounts for the six months to 30 September 2002, pending the outcome of any appeal.

Commenting on the decision, Allan Gormly, BPB Chairman, said:

“None of the findings affect BPB’s on-going business practices. The group has not participated in any cartel and the evidence is simply not consistent with any agreement to collude over prices or market share, however vaguely the Commission expresses its case. In fact, the European plasterboard industry has always been and continues to be characterised by vigorous price competition for market share.”

Notes to editors

• BPB will tomorrow announce its interim results and dividend for the six months to 30 September 2002.
  
  
• BPB is the world leader in the supply of plasterboard and gypsum plasters, and a major supplier of insulation, ceiling tiles and related products for internal linings, serving growing markets for building systems in over 50 countries.
  
  
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  Contacts:
  
  

  Allan Gormly, Chairman (01753 898911)
  Bob Heard, Director and Group Secretary (01753 898813)
  James Murgatroyd, Finsbury (020 7251 3801)
  Available on BPB’s website: www.bpb.com