Car firm caught in EU oil slick

Date: 27/09/01

By Peter Chapman

GERMAN car giant Volkswagen could be on collision course with Competition Commissioner Mario Monti again after small-engine oil makers accused VW of siding with two big firms to squeeze them out of the market.

The Paris-based European Union of Independent Lubricant Manufacturers has fired off a complaint to Brussels after Europe's biggest carmaker insisted its dealerships could only use Castrol or Esso engine oil when they serviced VW models such as Golfs, Polos and Passats.

Catherine Bourrienne-Bautista, the lobby's secretary-general, said the deal between VW and the suppliers was a breach of EU competition rules which outlaw 'concerted practices' between firms. Castrol and Esso had agreed to pay over €1 million to become exclusive suppliers.

She said the deal - which ran from 1999 to the end of 2000 - had unfairly shut-out the lobby's 400 members from the market, even though their products were of equal quality to the Esso or Castrol-branded oil.

She added: "Other companies put the same product on the market with the same technology. We took this action to deter other companies from doing the same [as VW]."

Most carmakers currently endorse a particular brand of oil. However she insisted it was "completely different" to insist upon it. Monti's spokesman Michael Tscherny confirmed officials were investigating, however he said it was too early to predict a ruling.

VW officials refused to comment, adding that they only learned about the complaint late last week.

German car giant Volkswagen could be on a collision course with Competition Commissioner Mario Monti again after small-engine oil makers accused VW of siding with two big firms to squeeze them out of the market.