India Opens Second Antitrust Front Against Global Fragrance Makers

The Competition Commission of India is examining Givaudan, Firmenich and International Flavors & Fragrances over suspected price coordination dating from 2024, according to reporting by Reuters, which cited a confidential regulatory document and a person familiar with the matter. The probe is separate from an existing Indian investigation into allegations that the companies agreed not to recruit employees from one another.

The new scrutiny broadens the regulatory risks confronting major fragrance suppliers, whose ingredients are used across perfumes, cosmetics and consumer products. Competition authorities in several overseas jurisdictions have also investigated the sector over possible anticompetitive conduct. The companies have previously said they are cooperating with international cartel investigations, Reuters reported.

An internal CCI document dated July 22 characterized the Indian inquiry as involving alleged cartel activity in the country’s fragrance business, according to Reuters. Indian authorities generally don’t disclose details of price-fixing investigations while they remain underway.

The regulator had progressed far enough to prepare a report containing its findings and provide it to the companies in February, Reuters reported, citing the CCI document. That process was subsequently disrupted by a dispute over confidential corporate information.

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Givaudan and IFF complained that commercially sensitive material hadn’t been adequately removed from the document, prompting the regulator to withdraw the report in July, according to Reuters. The CCI is expected to produce a revised version with the confidential material properly redacted, a step that could extend a case that has already been underway for about two years.

The handling of proprietary information could itself raise competition concerns because disclosure of sensitive business data can affect how companies behave in a market, Gautam Shahi, an antitrust lawyer at Dua Associates, told Reuters.

Givaudan, IFF, DSM-Firmenich and the CCI didn’t respond to Reuters’ requests for comment Tuesday. Firmenich became part of DSM-Firmenich following its 2023 combination with Dutch specialty-chemicals producer DSM.

The Indian cases come amid wider regulatory scrutiny of the fragrance industry. Swiss and UK competition authorities disclosed investigations involving the companies in 2023, while the European Commission has investigated possible coordination in the supply of fragrances and fragrance ingredients, Reuters reported.

In a separate U.S. development, IFF agreed last year to pay $26 million to settle a substantial portion of civil antitrust litigation alleging price fixing in the fragrance-ingredients market, while denying liability as part of the settlement process. Germany’s Symrise said in February that the U.S. Justice Department had ended an antitrust investigation involving the company and that no unlawful conduct by Symrise had been established, according to Reuters.

The stakes in India are rising alongside the market itself. The country’s flavors and fragrances industry is projected to reach about $5 billion in 2033, double its estimated $2.5 billion size in 2024, Reuters reported, citing Grand View Research.

The latest investigation leaves the three fragrance groups facing scrutiny in India on two distinct fronts: how they allegedly competed for customers and how they allegedly competed for workers. Neither inquiry, as reported by Reuters, amounts to a final finding that the companies violated Indian competition law.

Source: Reuters