British Polythene Industries, the largest polythene film, sacks and bags manufacturer in Europe, yesterday admitted it may have broken competition laws that could lead to the company being fined.
Last year BPI along with other producers of plastic film was visited by European Commission officials looking for evidence of suspected price fixing in the industry.
The commission raided producers in the UK, Austria, Denmark, the Netherlands and Sweden as part of the inquiry last August. BPI said it could incur financial penalties the amount of which it cannot assess yet as it had become clear some of its previous practices had "not been compliant" with legislation.
The group, which said the commission was unlikely to reach a decision until 2003, said it had spent around £500,000 on legal and professional fees in the matter.
The company, run by the chairman and chief executive Cameron McLatchie, said: "We continue to co-operate with the European Commission in its investigations and are also in the process of finalising the implementation of a group-wide compliance programme in both EU and UK competition law."
The news sent its shares tumbling 11 per cent to 295p, valuing the company at £76.2m.
BPI, which warned of challenging market conditions in September, also confirmed that trading had progressed as it expected over the past four months. "Overall demand is reasonable, and margins, continually under pressure, are similar to those achieved in the first half," the company said in a trading statement ahead of its full-year results.
BPI, which fought off a £114m hostile bid from Macfarlane Group in 2000 and saw another bid approachin November, said raw material costs had eased in recent weeks, although strong competitive pressure remained in the eurozone.
The company, based in Greenock, Scotland, said it expected its year-end borrowing to be below the bottom of the £70-75m range it had anticipated in September due to the careful management of working capital and the sale of assets and businesses.Reuse content