In connection with the founding of the corona mask manufacturer Hygiene Austria by the textile manufacturer Palmers and Lenzing, the cartel court increased the fine against Palmers to 100,000 euros. Previously, only a fine of 5,000 euros had been imposed.
AUSTRIA. “Merger control serves an important purpose for the functioning of the markets; violating the implementation ban is not a trivial offense in Austria. The Supreme Court has now made this more than clear by increasing the fine twenty-fold,” emphasized the head of the Federal Competition Authority (BWB). , Natalie Harsdorf, in a broadcast. Lenzing paid a fine of 75,000 euros in June at the request of the BWB.
As Palmers explained to the APA, the company “takes note” of the ruling by the Higher Cartel Court. The textile manufacturer spoke of a “formal issue from the past” that was now closed. Now they want to concentrate on the future and in particular on the repositioning of their own brand.
Founding of Hygiene Austria before registering with BWB
As the BWB announced, the penalties were imposed against Palmers and Lenzing because they founded their joint venture Hygiene Austria, based in Wiener Neudorf (Lower Austria), before registering with the Federal Competition Authority. According to the BWB, Palmers and Lenzing registered the founding of Hygiene Austria with the authorities on May 11, 2020. The merger was approved with effect from May 26, 2020.
However, a parliamentary question drew the BWB’s attention to the fact that the merger had probably already been completed before registration and the examination had been completed. The authority pointed to a press release from the two companies in which Palmers and Lenzinger had informed the public about the founding of Hygiene Austria. This is from April 24, 2020, meaning that “the parties violated the implementation ban even before it was released,” according to the BWB.
Scandal-hit mask manufacturer
Hygiene Austria was originally founded at the beginning of the Covid-19 pandemic as a joint venture between Lenzing and Palmers to ensure security of supply for personal protective equipment in Austria. However, the company soon caused a stir when it became publicly known that Hygiene Austria had purchased protective masks from China, relabeled them and sold them as “made in Austria”.
However, this was not the only scandal at Hygiene Austria. The Chamber of Labor (AK) identified wage dumping, as only eleven of the 200 employees were permanently employed by the company. A temporary worker also criticized the company for treating employees like “slaves or animals”.
In August 2022, the company was rocked by a financial scandal due to suspected tax evasion. There were allegations that Palmers evaded at least 693,000 euros in customs and import sales tax when importing protective masks from China via Palmers Germany. Both Palmers and Hygiene Austria rejected the allegations at the time. In January 2024, Hygiene Austria finally filed for bankruptcy.
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