Consumer giants fined over soap powder cartel

EU forces Unilever and Procter & Gamble to clean up act over European washing powder price-fixing cartel.

    Almunia said the firms established the cartel while working to make more environmentally friendly products [Reuters]

    European Union regulators have fined consumer products firms Unilever and Procter & Gamble €315.2m ($456m) for fixing washing powder prices in eight EU countries.

    The fines, confirmed on Wednesday, conclude a three year investigation by the European Commission into a price-fixing cartel begun after a tip off from Henkel, a German competitor.

    Unilever, which sells the Omo and Surf brands, was fined €104m and Procter & Gamble, which owns the Tide, Gain and Era brands, was fined €211.2m.

    Henkel, which owns the Persil brand name in certain but not all EU countries, was not fined because it had alerted the commission to the cartel.

    Joaquin Almunia, the EU competition commissioner, said the price fixing had begun when the companies, through a trade association, were working to make their detergents more environmentally friendly.

    "The three companies took the opportunity of these discussions on environmental agreements promoted by their trade organisation to organise a cartel," Almunia said.

    He said that the three had agreed not to decrease prices when making their packages smaller and even agreed later to raise prices.

    Cartel companies

    The cartel operated in Belgium, France, Germany, Greece, Italy, Portugal, Spain and the Netherlands between 2002 and 2005.

    As part of the commission's settlement procedure, the EU watchdog cut the fines by 10 per cent in return for the firms' admission that they participated in the cartel.

    "By acknowledging their participation in the cartel, the companies enabled the Commission to swiftly conclude its investigation," Almunia said in a statement.

    Unilever said it had used the investigation findings to tighten up its internal procedures, adding that the fine was covered by provisions made in its 2010 results.

    "All key managers in Europe have been retrained on the European competition rules and are well placed to participate fully in industry-wide environmental initiatives," the company said in a statement.

    Procter & Gamble said it has made the appropriate financial reserves for the case.

    "Perhaps more importantly, we have already taken the appropriate internal action, including strengthening our global compliance program, which includes extensive training, reinforcement of key policies and regular auditing," Paul Fox, a spokesman for the company, said in a statement.

    The Commission called its investigation into the cartel "Purity".

    SOURCE: Agencies


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