Antitrust: Commission sends Statement of Objections to Alcogroup and Agroetanol over alleged ethanol benchmarks cartel

The European Commission has informed Alcogroup S.A. and its subsidiary Alcodis S.A. (together ‘Alcogroup’) as well as Lantmännen ek för and its subsidiary Lantmännen Agroetanol AB (together ‘Agroetanol’) of its preliminary view that, together with Abengoa S.A. (‘Abengoa’), which settled the case in December 2021, they have breached EU antitrust rules. The Commission considers that the companies colluded to influence the wholesale price formation mechanism for ethanol in Europe.

Alcogroup and Agroetanol decided not to settle this cartel case with the Commission. As a result, the Commission’s investigation against the two companies is being carried out under the standard cartel procedure.

Statement of Objections on the companies’ alleged cartel in relation to ethanol benchmarks

Ethanol is an alcohol made from biomass (e.g. wheat, maize or sugar beet) that, when added to gasoline, can be used as a biofuel for motor vehicles. The port of Rotterdam and the Amsterdam-Rotterdam-Antwerp barge market are the most important trading locations for ethanol in Europe.

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Alcogroup, Agroetanol and Abengoa are all ethanol producers. S&P Global Platts (‘Platts’), a price reporting agency that provides assessments for different commodity markets, including ethanol, takes the trading activity in this area into account for establishing its ethanol benchmarks, which are used as reference prices in the industry. To set its ethanol benchmarks, Platts uses a price assessment process called ‘Market on Close’ (‘MOC’). This process is based primarily on information (e.g. bids, offers and trades) collected from market participants during the day and, in particular, during the time interval between 16:00 and 16:30 London time, which is known as the ‘MOC Window’.

The Commission preliminarily found that Alcogroup and Agroetanol, together with Abengoa: (i) coordinated their trading conduct in the MOC Window and (ii) agreed to limit the volumes of ethanol in the Rotterdam area so that they would not be sold in the MOC Window, in line with their common plan to artificially increase, maintain and/or prevent from decreasing the level of Platts’ ethanol benchmarks. The companies expected that this would lead to higher prices for their ethanol sales under the ethanol supply contracts with their customers referenced to those benchmarks.

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The Commission preliminarily found that traders from Alcogroup and Agroetanol, together with Abengoa, had illegal contacts with each other in the form of instant messaging communications or by email.

If the Commission’s preliminary view is confirmed, the conduct of Alcogroup and Agroetanol would infringe Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the European Economic Area (‘EEA’) Agreement.

Sending a Statement of Objections does not prejudge the outcome of the investigation.

More information: Press release – European Commission