May 19, 2024

Unilever and P.&G. Fined for Fixing Price of Detergent

P.G., the maker of detergent brands like Tide and Ariel, was ordered to pay 211.2 million euros, or $306 million. Unilever, whose brands include Omo and Surf, was fined 104 million euros. A German company, Henkel, escaped a fine in exchange for blowing the whistle on the cartel.

The European competition commissioner, Joaquín Almunia, said that the companies had developed the cartel to make sure none gained a competitive advantage over the others while seeking to meet environmental goals.

“They agreed to protect their respective market shares, they agreed also not to decrease prices when decreasing the size of the packages, and afterwards they even agreed a price increase,” Mr. Almunia said.

The companies formed the cartel after working on methods to reduce the weight of detergent powders and to reduce waste from boxes and bags through the Association for Soaps, Detergents and Maintenance Products, a trade association that includes other major home products companies.

The cartel operated from January 2002 until March 2005, and it affected the price of laundry detergents in supermarkets in Belgium France, Germany, Greece, Italy, the Netherlands, Portugal and Spain, the European Commission said.

Mr. Almunia said there was no need to punish the trade association, which he praised for promoting environmental initiatives.

Henkel said it detected the cartel in 2008 during an internal audit. The company “had to acknowledge concrete evidence of misconduct by employees” in several West European countries, Dirk-Stephan Koedijk, the chief compliance officer at Henkel, said in a statement.

Henkel also said that it had taken measures to “avoid future misconduct.”

Marina Barker, a spokeswoman for P.G., said that the activity took place from six to nine years ago, and had been solely focused on some countries in Europe.

She said that P.G. had “previously taken an appropriate financial reserve,” and that the company had already strengthened its global compliance program.

Unilever said that the size of the fine was in the range it had prepared for.

Mr. Almunia said the companies admitted involvement in the cartel in exchange for a 10 percent reduction in their fines as part of a settlement procedure.

Mr. Almunia said that where possible he favored settlements, as in two recent cases involving computer chips and animal feed, to speed up cartel investigations, but that that did not mean Europe was going soft on cartels.

“The commission will pursue its relentless fight against cartels, which are the worst violation of competition rules by extracting higher prices from consumers than they would pay when companies compete fairly and on the merits,” Mr. Almunia said.

Article source:

Speak Your Mind