EU fines washing powder cartel
(BRUSSELS) - They claim whiter than white results but housewives got proof of price-fixing Wednesday as the makers of Ariel and Persil agreed to pay 315 million euros ($456 million) in fines for running a washing-powder cartel.
Global giants Procter & Gamble and Unilever will pay fines of 211.2 million euros and 104 million euros respectively after reaching settlements with the European Commission which polices business abuses across the European Union's market of half a billion consumers.
Germany's Henkel was also listed as a member of the cartel that operated for more than three years at the start of the last decade but it escaped any fine, having revealed the sharp practices initially in 2008.
"I will not name the brands but they all feature prominently on the shelves of supermarkets," EU competition commissioner Joaquin Almunia said.
"I'm sure you know all the brands that were involved."
The world's largest consumer products group, Procter & Gamble owns brands including Bonux and Tide while Anglo-Dutch group Unilever markets the likes of Surf and Omo.
Unilever is behind Persil in Britain and Ireland while Henkel controls it in much of the rest of Europe.
"Henkel, Procter & Gamble and Unilever engaged in anti-competitive practices ... on their own initiative and at their own risk ... to protect their own market share," Almunia said.
He would not put a figure on how much the companies gained from the secret deal to fix prices that arose out of a trade association plan to "improve the environmental performance" of detergents.
But the commissioner said he hoped the fine would prove "deterrent enough" and warned that companies in all business sectors "should be under no illusion that the commission will pursue its relentless fight against cartels, which extract higher prices from consumers than if companies compete fairly."
The Spaniard said the cartel came about so as "to ensure that none of them would use (the environmental) initiative to gain competitive advantage over the others by decreasing prices."
The companies fixed prices in Belgium, France, Germany, Greece, Italy, Portugal, Spain and the Netherlands.
P&G and Unilever obtained a 10 percent reduction in the fines, based on associated business turnover, for holding their hands up after raids by inspectors.
Unilever said it was now training all key European product managers to ensure strict adherence to EU competition rules while Henkel also insisted it had taken measures to ensure there would be no repeat.
It was the third time the commission has reached a settlement in a gamut of cartel cases, which often run for years, after similar outcomes last year in the computing and animal feed sectors.
Thirteen companies that ran an animal feed phosphates cartel for more than three decades until 2004 were fined 175 million euros in July.
The world's biggest memory chip makers, including Samsung, Infineon and Toshiba, were fined a total of 331 million euros in May.
Earlier this month, a cartel of 17 steelmakers led by global leader ArcelorMittal saw fines for fixing markets between 1984 and 2002 reduced from an initial 518 million euros to 269 million euros.