A federal judge in New Jersey has rejected attempts by the world's leading fragrance companies - International Flavors & Fragrances (IFF), Givaudan, DSM-Firmenich and Symrise - to dismiss a class action lawsuit accusing them of conspiring to inflate the prices of ingredients used in cosmetics, perfumes, cleaning products and other industries. The court decision means the companies will face legal proceedings in the US, a case that could shake the foundations of the global fragrance sector.
The accusation: a manipulated market
The lawsuit was filed in 2023 by buyers and consumers, who allege that these companies formed a cartel to coordinate price increases and reduce competition in a market worth more than $9 billion annually. The charges allege that the companies, which together control about 60% of the global fragrance market, allegedly exchanged confidential business information and illegally agreed on pricing strategies.
The case builds on previous investigations by regulators in the United States, the European Union and the United Kingdom, which since March 2023 have been examining possible antitrust violations. At that time, the European Commission conducted surprise raids on the offices of these companies in different countries in an effort to collect evidence to support the allegations.
Reactions and defence of the companies
The defendant companies have denied the allegations and said they are cooperating with the investigations. However, the New Jersey judge's ruling allows the class action lawsuit to move forward, opening the door to potential fines in the millions of dollars and reputational damage.
For its part, the European Commission has stated that, if collusion is confirmed, the companies involved could face fines of up to 10% of their global annual revenues, a figure that would amount to billions of dollars.
Impact in the industry and the consumers
This case has raised concerns in the cosmetics and consumer goods industry, as the alleged price manipulation may have directly affected manufacturers and consumers around the world. Companies that rely on these ingredients to produce perfumes, detergents and other items may have paid unjustifiably inflated prices, passing that cost on to end consumers.
The court case is still at a preliminary stage, but with the judge's rejection of the motion to dismiss, the legal battle could drag on for years and set an important precedent in policing anti-competitive practices in the sector.
The case brings under scrutiny an industry traditionally opaque and dominated by a few companies, and could trigger stricter regulatory changes in the global fragrance market.