Bundeskartellamt imposes fines totalling approx. 28 million euros on manufacturers of industrial batteries

The Bundeskartellamt has imposed fines totalling around 28 million euros on two manufacturers of industrial batteries and their representatives for agreeing between them to levy the so-called "lead surcharge" as a key price component of lead batteries. The companies involved are Hawker GmbH, Hagen, and Hoppecke Batterien GmbH & Co. KG, Brilon. The proceeding was initiated with a sector-wide dawn raid in April 2014 following an application for leniency by Exide Technologies GmbH, Büdingen, upon which no fine was imposed in accordance with the Bundeskartellamt's leniency programme.

Andreas Mundt, President of the Bundeskartellamt: "The so-called "lead surcharge" is in principle a permissible instrument to automatically calculate changes in the commodity price into the selling price of products without any new price negotiations. In this way the supplier can pass on its commodity price risk to its customers. Suppliers and customers are naturally free to agree on this kind of automatic price adjustment. However it is clearly not admissible for suppliers to agree among themselves to introduce or maintain such a surcharge as a sector-wide standard and thus to eliminate competition for other pricing models."

In the light of rising lead prices representatives of the above companies had already agreed in early 2004 to generally re-apply the lead surcharge introduced in the 1970s in the domestic sale of network power batteries, (e.g. used for emergency power supply). The level of the lead surcharge is linked to the lead prices quoted on the London Metal Exchange. Changes in the price of lead which is the commodity for electrodes can thus be passed on directly and consistently to customers.

Until the Bundeskartellamt's dawn raid this agreement to pass on lead costs in the form of a lead surcharge had regularly been confirmed by the companies in question at association meetings.  No agreements were made on how this was to be done (method of calculation) and the level of the lead surcharge. 

From 11 September 2012 to 18 March 2014 an agreement also existed between the companies Exide, Hawker and Hoppecke in the sale of so-called motive power batteries (for use in industrial vehicles such as e.g. fork lift trucks). In this case the companies had agreed to pass on to customers in Germany the increased costs for lead and in particular for lead alloys via the lead surcharge which had been applied for some years. Again this agreement was only about whether to pass on the costs and not how and was reached and renewed both in confidential talks and also at association meetings.

The proceedings against three other manufacturers of industrial batteries participating in the agreements were terminated because of the considerably lower level of participation in the violation and lower market importance. The proceeding against the association was also not continued, in particular because the main share of the agreements were reached outside association meetings. 

In setting the fine the Bundeskartellamt took into account that Hoppecke had cooperated extensively with the authority in uncovering the agreements and that a settlement could be reached. The proceeding against Hawker concerning its infringement in the sale of motive power batteries was also concluded with a settlement. The fines against Hoppecke are already final. Hawker could still appeal the decisions to the Düsseldorf Higher Regional Court.

A case summary (in German) will be published shortly on the Bundeskartellamt’s website.