8 November 2004 â€” Pasadena (CA): Shares of Avery Dennison fell 11.3 per cent after the company disclosed it may face large fines from the European Commission for anticompetitive practices.
During an internal investigation, the company found evidence of misconduct among employees in its European paper and forest sector which, it said in a filing, "violated the company’s policies and in some cases constituted an infringement of European Community law".
Avery said it expected the Securities and Exchange Commission to levy a fine that is "material" after the enquiry is completed. The commission is able to levy fines of up to 10 per cent of a company’s revenue.
But Karen Gilsenan, a Merrill Lynch analyst who has a neutral rating on the stock said she believed Avery could "handle the fine given its strong financial position".
Avery Dennison shares dropped by $6.99 to $54.90 on Friday, their lowest point since late December 2003.