Italy Fines Novamont €30.4 Million for Market Abuse in Bioplastics

Italy's Competition and Market Authority (AGCM) has imposed a €30.4 million fine on bioplastics manufacturer Novamont, citing abuse of market dominance in raw materials for lightweight and ultra-lightweight fruit and vegetable bags. The investigation revealed that these anti-competitive practices lasted from January 1, 2018, to December 31, 2023. Additionally, Novamont's parent company, ENI S.p.A., faces a €1.7 million fine for its role.

Since July 2021, Italian law mandates that all shopping and ultra-lightweight bags must meet biodegradability and compostability standards, with at least 60% renewable material content for ultra-light bags. Novamont's product, Mater-Bi, made primarily from PBAT and starch blends, dominates the market, holding over 50% market share in shopping bag materials and 70% in ultra-light bag materials.

The AGCM investigation revealed a dual-layer exclusivity system controlled by Novamont:

1. Processors were prohibited from using materials other than Mater-Bi.
2. Large retailers were required to purchase finished bags exclusively from Novamont-affiliated processors.

This structure created a self-reinforcing cycle of exclusivity. As retailers sourced Mater-Bi bags, processors were incentivized to accept Novamont's restrictive agreements. Consequently, competitors faced significant barriers to market entry, and alternative products were stifled.

The AGCM emphasized that such practices not only harm competition but also hinder environmental progress. A spokesperson noted, "A competitive bioplastics market is essential for achieving EU and national sustainability goals. Restricting alternatives to Mater-Bi has significant negative environmental impacts."

In response, Novamont expressed shock and regret, claiming the ruling penalizes "systemic innovation." The company announced plans to challenge the decision in court, highlighting its pioneering efforts in the bioplastics industry. Novamont argued that the ruling could harm Italy’s ecological transition by favoring lower-quality imports over sustainable domestic production.