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International Flavors & Fragrances Inc. (IFF) has agreed to pay $26 million to resolve claims from direct purchasers accusing it and three other major fragrance ingredient makers of orchestrating a global price-fixing conspiracy, marking the first settlement in sprawling multidistrict antitrust litigation.

In a 44-page motion filed Friday, plaintiffs’ counsel asked U.S. District Judge William J. Martini of the District of New Jersey to preliminarily approve the deal and provisionally certify a settlement class of direct purchasers who bought IFF products between January 1, 2018, and December 31, 2023. The settlement — described by plaintiffs as an “icebreaker” deal — could help pave the way for additional agreements with the remaining defendants: Givaudan SA, Firmenich SA, and Symrise AG.

Key Terms of the Proposed Settlement

The proposed settlement allows class members to opt out or receive a pro rata share of the recovery. Although the filing did not specify the number of eligible claimants or the expected average payout, it said there are likely “hundreds, if not thousands” of potential class members.

The agreement also includes a confidential “blow provision”, giving IFF the right to withdraw from the settlement if too many class members opt out — a standard safeguard in large antitrust class deals.

Class counsel plans to seek up to one-third of the settlement amount (about $8.67 million) in attorney fees and as much as $3 million for litigation costs.

IFF Denies Wrongdoing but Seeks Closure

IFF, based in New York City, emphasized in a statement Friday that the settlement includes no admission of liability or wrongdoing. The company said it aims to resolve related claims brought by indirect purchasers and end users “in the near future” and continues to cooperate with authorities investigating the global fragrance industry.

“The settlement allows the company to put these matters and the burden of litigation behind and focus its attention on innovation and serving its customers,” IFF said. “It avoids the costs, distraction, and uncertainty of prolonged litigation.”

IFF added that it “will continue to seek resolution of these matters with expediency” and remains in contact with global competition regulators.

Background: A Global Investigation Spurs U.S. Litigation

The Fragrance Antitrust Litigation, filed in 2023, followed coordinated international investigations by antitrust authorities in the U.S., Europe, Switzerland, and the U.K. into alleged collusion among the world’s largest fragrance ingredient suppliers.

The first complaint was filed in April 2023 by Our Own Candle Co. Inc., a New York-based manufacturer of candles, soaps, and fragrance oils, which accused the companies of fixing prices, dividing markets, and limiting supply. Separate groups of indirect purchasers and end users soon filed similar suits.

In February 2024, Judge Martini largely denied the defendants’ motion to dismiss, allowing the core conspiracy claims to proceed while trimming some state law counts from the indirect purchaser and end-user cases.

The litigation gained further momentum after the European Commission fined IFF €15.9 million ($17 million) for obstructing its probe by deleting a senior employee’s WhatsApp messages, which plaintiffs cited as evidence of collusion.

Meanwhile, the U.S. Department of Justice intervened in June 2024 to protect the integrity of its ongoing criminal investigation into the fragrance sector.

Counsel and Case Information

Direct purchasers are represented by:

• James E. Cecchi of Carella Byrne Cecchi Brody & Agnello PC

• Hilary K. Scherrer of Hausfeld LLP

• Christopher M. Burke of Burke LLP

• Linda P. Nussbaum of Nussbaum Law Group PC

IFF is represented by:

• Boris Bershteyn, Matthew M. Martino, Tansy Woan, Andrew Muscato, and Evan H. Levicoff of Skadden, Arps, Slate, Meagher & Flom LLP

If approved, the settlement will be the first resolution in the consolidated antitrust cases:

• In re Fragrance Direct Antitrust Litigation, Case No. 2:23-cv-02174

• In re Fragrance Indirect Antitrust Litigation, Case No. 2:23-cv-03249

• In re Fragrance End-User Antitrust Litigation, Case No. 2:23-cv-16127
  All pending in the U.S. District Court for the District of New Jersey.