Investigation into a possible illegal agreement between the big players in the perfume and flavoring sector

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Four of the biggest names in the world's fragrances and flavors sector are under investigation by competition police in Europe and the United States who suspect illegal agreements on prices and maneuvers to stifle competition. 

The Swiss Competition Commission (COMCO) unveiled the first, on Wednesday morning, the names of the companies targeted by this international investigation and it is the Gotha of a sector worth billions: Firmenich International SA (Geneva), Givaudan SA (Geneva), International Flavors & Fragrances Inc. (USA) and Symrise AG (Germany).

The Swiss competition policeman “has indications that several companies active in the production of perfumes (“fragrances”) have violated cartel law”, writes COMCO, which is associated with the European Commission, but also with the police. from British and American competition.

Firmenich, the world's largest privately held fragrance and flavor company headquartered outside Geneva, Switzerland, confirmed raids on Wednesday in its offices in France, Switzerland and the United Kingdom, “as part of an industry-wide investigation,” a company spokesperson told AFP.

“Firmenich is closely monitoring the situation and is cooperating fully with investigators. We are unable to comment further at this stage,” he continued.

“As a good corporate citizen, Givaudan is cooperating fully with the authorities,” he said. spokesperson for the group.

“Givaudan is committed to and adheres to the highest ethical standards of business conduct, as set out in our Principles of Business Conduct,” she added .

Coordinated prices

“There are suspicions that these companies would have coordinated their pricing policy, prevented their competitors from supplying specific customers and restricted the production of certain perfumes”, further explains the COMCO.

Fragrances and flavorings are used in the manufacture of many products, including but not limited to cosmetics, personal care products, detergents and cleaning products.

“As part of the investigation, it will be examined whether there are indeed restrictions of competition prohibited by cartel law”, underlines the competition authority, adding that the presumption of innocence applies. companies.

The European Commission reported on this ongoing investigation on Tuesday evening without naming names.

She says she fears that “companies and an association in the fragrance sector around the world may have breached EU cartel rules”.

And above all she calls on those who allegedly participated in an agreement to collaborate to possibly benefit from immunity or a significant reduction in the fine incurred.

The giants of perfume and aroma

Founded in 1895, Firmenich is known for its noses. Its master perfumers are behind successful perfumes such as Angel (Thierry Mugler), Acqua di Gio (Armani) or Flower (Kenzo).

This family business is to merge with the Dutch DSM.

Firmenich posted a 10.5% increase in its half-yearly turnover over the first six months of its staggered 2022/2023 financial year to 2.4 billion Swiss francs (2.4 billion euros).

Givaudan for its part recorded a net profit for 2022 that exceeded expectations, up 4.2% year-on-year to 856 million francs, and a turnover up by 6.5% to 7.1 billion francs.

The Givaudan share lost 3.2% on Wednesday morning on the Swiss market at 2712 CHF around 10 h 15 GMT.

The American International Flavors and Fragrances, for its part, has a turnover of 12.44 billion dollars (11.80 billion euros) for 2022 and a loss before taxes of 1.63 billion dollars.

As for the German Symrise – which has more than 12,000 employees in 40 countries, it announced on Wednesday for 2022 a turnover of 4.6 billion dollars. euros for a net profit of 280 million dollars (265.55 million euros).