The General Court of the European Union on Friday rejected the appeal of Deltafina, S.p.A, an Italian subsidiary of Universal Corporation, against a penalty payment that was issued for its role in a cartel.

The penalty of EUR 30 million (USD 41 million) was imposed on Deltafina and US-based parent Universal Corporation in 2005 for collusion and price-fixing in the Italian raw tobacco market from 1995-2002.
In 2002 Deltafina had alerted regulators about the cartel, which also involved Romana Tabacchi, Mindo, Alliance One International and Transcatab, and was therefore initially granted immunity from the payment by the European Commission.
However, the Commission later revocated Deltafina's immunity arguing that the firm had tipped off its partners in the syndicate without telling the authorities that it had done so. The court said this meant Deltafina had not demonstrated the required "genuine spirit of cooperation" to escape a fine.
This was the first time a firm exposing a cartel was not exempted from an EU fine.
Universal and Deltafina say they review the decision and will evaluate whether to file an appeal.  
Universal further states that it will accrue a charge for the fine and related interest – estimates at approximately USD 49 million – in the quarter ending on 30 September 2011, but that it will have no impact on the company's tobacco operations in Europe or elsewhere.
George C. Freeman, III, the Company's Chairman, President, and CEO, said: "We are surprised and disappointed by the Court's decision. We continue to assert that Deltafina kept the Commission fully informed of its actions and fulfilled the Commission's requirements for maintaining its immunity. The Commission benefited from Deltafina's continued cooperation for two years, before notifying us in December 2004 of its intent to revoke Deltafina's immunity." (pi)