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Can companies found engaging in anticompetitive actions

Moscow. OREANDA-NEWS . February 27, 2010. The Federal Antimonopoly Service (FAS Russia) found that "Rexam Beverage Can Naro-Fominsk" Ltd., "Rexam Beverage Can Dmitrov" Ltd. and "Rexam Beverage Can Vsevolozhsk" Ltd. violated Clauses 3 and 8 Part 1 Article 10 of the Federal Law "On Protection of Competition" (abusing market dominance), reported the press-centre of FAS Russia.

The case was initiated upon the findings of an inspection of compliance of "Rexam Beverage Can Naro-Fominsk" Ltd., "Rexam Beverage Can Dmitrov" Ltd. and "Rexam Beverage Can Vsevolozhsk" Ltd. with the antimonopoly law in 2009; in particular, whether the companies - members of the group of persons of "Rexam Beverage Can Holdings B.V." observed the determination issued by the antimonopoly authority in December 2007.

"Rexam Beverage Can Naro-Fominsk" Ltd., "Rexam Beverage Can Dmitrov" Ltd. and "Rexam Beverage Can Vsevolozhsk" Ltd., that are in the same Rexam Group, dominate the aluminum can market with their share exceeding 90% of the market.

FAS Russia analyzed contracts for supplies of aluminum cans between the companies of the Rexma Group and producers of beer, low-alcoholic and non-alcoholic beverages and discovered that the contracts specified different pricing conditions for the same types of products and different minimum sales requirements. This created discriminatory conditions for consumers of aluminum cans.

Also in course of the investigation FAS Russia discovered that in some incidents "Rexam Beverage Can Naro-Fominsk" Ltd., "Rexam Beverage Can Dmitrov" Ltd. and "Rexam Beverage Can Vsevolozhsk" Ltd. forbade deliveries of aluminum can by the buyer's transport.

At the same time some consumers of aluminum can were given a possibility for self-delivery of the products they bought.

Therefore, "Rexam Beverage Can Naro-Fominsk" Ltd., "Rexam Beverage Can Dmitrov" Ltd. and "Rexam Beverage Can Vsevolozhsk" Ltd. were imposing upon their counteragents such conditions of the products supply contracts that were disadvantageous and irrelevant to the subject of the contracts (aluminum can).

Reference: Part 1 Article 10 of the Federal Law "On Protection of Competition" prohibits actions (omissions) of dominant economic entities that have resulted or can result in preventing, restricting, eliminating competition and (or) infringing the interests of other persons, including imposing disadvantageous contract conditions upon counteragents or irrelevant to the contract subject (Clause 3 Part 1 Article 10 of the Federal Law "On Protection of Competition"), as well as creating discriminatory conditions (Clause 8 Part 1 Article 10 of the Federal Law "On Protection of Competition").

According to the determination issued earlier by the Antimonopoly Service, the largest global manufacturer of aluminum packaging products must satisfy the needs of all buyers of aluminum cans and lids to them in the market of the Russian Federation, provided it has appropriate production capacity and consumers are prepared to pay for the aluminum cans and lids. Also the prices for aluminum cans and lids must not increase by more than 15% per year for ten years after the date the transactions was completed.
"Materials possessed by FAS Russia contain some signs that actions of the single producer of aluminum cans in the Russian Federation breached the determination issued earlier by FAS Russia. FAS Russia will look into a possibility to initiate administrative proceedings against "Rexam Beverage Can Holdings B.V." due to the company's failure to execute a legitimate determination issued by the body responsible for state control", concluded Deputy Head of FAS Russia Andrey Tsyganov.

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