Weapons maker from Nuremberg
EU punishes Diehl for hand grenade cartel
September 21, 2023, 5:44 p.m
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For years, the defense companies Diehl and RUAG have divided the European market for hand grenades between themselves. Because of this illegal agreement, the EU is imposing a fine worth millions. But only the German manufacturer has to pay.
The Nuremberg-based arms manufacturer Diehl has to pay a fine of 1.2 million euros for an unlawful market agreement with a competitor. The EU Commission imposed the fine after a settlement procedure, as the EU authority announced. “Today we are fining Diehl because the company formed a cartel with its Swiss competitor RUAG over the sale of hand grenades,” said EU Competition Commissioner Didier Reynders.
A spokesman for Diehl’s defense division Diehl Defense confirmed the information. It is the first antitrust decision in the defense sector. “At a time when geopolitical realities are changing, it demonstrates that we will not tolerate cartels in any sector of the economy, not even in strategic sectors,” said Commissioner Reynders. Both companies admitted participation in the cartel and agreed to the settlement.
RUAG does not have to pay a fine because the company informed the EU Commission as part of a leniency program. The fine for Diehl was reduced by 50 percent because the company cooperated with the commission. A further reduction occurred because Diehl admitted the allegations.
The investigations revealed that the two companies had divided the markets for military hand grenades in the European Economic Area for almost 14 years. Only the manufacturer assigned to a specific area was allowed to sell military hand grenades there, unless there was express consent from the other. In recent months, Diehl has become known as a supplier of the IRIS-T air defense system, which Germany is supplying to Ukraine to support the war against Russia.