PAINT PRICE-FIXING PROBE UNDER WAY

Corporate Greed

PAINT PRICE-FIXING PROBE UNDER WAY
Anticompetitive practices are subject of Justice Department inquiry

MARC REISCH

In one broad brush stroke, the Department of Justice has subpoenaed five major automobile refinish paint makers for documents that could show evidence of anticompetitive practices.

	COLLISION WITH JUSTICE Price-fixing among auto paint makers might have made it more expensive to get cars repainted.

Details of the grand jury investigation under way are sketchy. A Justice spokeswoman would say only that "the Antitrust Division is looking at possible anticompetitive practices in the auto-refinish industry."

But BASF, PPG, DuPont, Akzo Nobel, and Sherwin-Williams acknowledge that they have received requests for information on their auto paint refinish businesses. Together, they supply $1.2 billion in coatings annually to 1,300 U.S. auto-body repair shops, says Pinehurst, N.C.-based industry consultant Phil Phillips.

All the paint makers say they are cooperating with the Justice Department. However, publicly available documents suggest that Akzo is key to the inquiry.

The Dutch company's annual report states that last year it incurred $26 million in legal and settlement costs because of paint-refinish antitrust violations. And it reveals that the company has set aside $145 million to pay, over the next few years, "probable costs, fines, and civil damages" resulting from its behavior.

Akzo also discloses that this investigation has legs. Canadian and European Union investigators are looking into allegations of price-fixing among auto paint refinish suppliers.

On the U.S. investigation, an Akzo spokesman says the company is cooperating, but "it is company policy not to comment further on pending government investigations."

A PPG spokesman says his company received a subpoena for documents in January. As it complied with the Justice request, PPG did its own internal investigation and found that "no one did anything improper."

A BASF spokesman also says, "We have no reason to believe we violated any laws." DuPont says pretty much the same and adds in its statement, "We are not at liberty to comment further ... but we do not expect that it will affect our normal business activities."

A Sherwin-Williams spokesman says the company is cooperating with authorities and "is unaware of any improprieties."

 

Editors Note: This is old news. ALL of the paint companies that first denied this report, paid a total of over $150 Million in fines and probably over a BILLION in undeserved profits. I make paint. That is what I do for a living. That $200.00 gallon of paint that you pay these companies, cost them less than $20.00 to make! Is that not greed?

On another note, MOST of these same companies have since been fined and paid MILLIONS in price fixing again for the other products that they sold, not just paint. Fertilizer, Glass, chemicals, etc. If the government was honest, these people should not be paying small fines, they should be in jail and the company taken away from the largest stock holders that are in control!