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France fines 13 consumer goods firms €951m for price-fixing France fines 13 consumer goods firms €951m for price-fixing
(about 3 hours later)
Some of the world’s biggest consumer products companies, including Unilever, Reckitt Benckiser, Procter & Gamble and Gillette, have been fined a combined total of €951m (£748m) by the French competition watchdog for price fixing in supermarkets. Some of the world’s biggest consumer products companies, including Unilever, Reckitt Benckiser, Procter & Gamble and Gillette, have been fined a combined €951m (£748m) by the French competition watchdog for price fixing in supermarkets.
The regulator said the 13 companies, which also include Colgate-Palmolive, Henkel, L’Oréal, Beiersdorf and Johnson & Johnson’s Laboratoires Vendôme, had colluded on price increases between 2003 and 2006. “These two sanctions are among the most significant imposed to date by the competition authority,” it said. The regulator said the 13 companies, which also include Colgate-Palmolive, Henkel, L’Oréal, Beiersdorf and Johnson & Johnson’s Laboratoires Vendôme, had colluded on price increases between 2003 and 2006. “These two sanctions are among the most significant imposed to date by the competition authority,” it said. The regulator added that the price-fixing had kept prices “artificially high” affecting consumers and “caused harm to the economy”.
France’s Autorité de la concurrence imposed sanctions totalling €345.2m related to cleaning products and a further €605.9m related to personal hygiene products, with most companies receiving two fines. France’s Autorité de la concurrence imposed sanctions totalling €345.2m related to cleaning products and a further €605.9m related to personal hygiene products. Most companies received two fines. The price-fixing affected a large number of popular brands, such as Vanish stain remover, Palmolive washing-up liquid, Sun and Calgonit dishwasher tablets, Sanex and Petit Marseillais shower gel, shampoos including Head & Shoulders, Fructis and Elsève, and Colgate and Signal toothpaste. Mouthwashes, deodorants, shaving creams and razors, female hygiene products, body lotion, facial and sun creams and insect sprays were also affected.
L’Oréal, the world’s largest cosmetics company, which faces the biggest share of the fines at €189.5m, said it was “surprised by this decision and the amount of the fine which are totally out of proportion”. It denied anti-competitive activities and vowed to appeal. Unilever, the Anglo-Dutch maker of Dove soap, Cif cleaner and Domestos disinfectant, was handed the second biggest fine of €172.5m. It will also appeal. The agency said commercial directors and other sales officials from the companies involved met “regularly and in secret” to co-ordinate price hikes at restaurants or via correspondence to private homes, as well as through telephone calls. The groups in which they met were called “Team” or “Friends”. One 2006 raid by investigators at a Parisian brasserie called “Le Royal Villiers” caught colluding executives from Colgate-Palmolive, SC Johnson, Henkel, Bolton Solitaire and Sara Lee “in the act” as they were lunching, the regulator said.
Dettol maker Reckitt said its French subsidiaries had been co-operating with the authorities in the investigation and a provision it made in 2013 would cover the €121m in fines it faces. L’Oréal, the world’s largest cosmetics company, which faces the biggest share of the fines at €189.5m, said it was “surprised by this decision and the amount of the fine which are totally out of proportion”. It denied anti-competitive activities and vowed to appeal. Unilever, the Anglo-Dutch maker of Dove soap, Cif cleaner and Domestos disinfectant, was handed the second biggest penalty of €172.5m. It will also appeal.
Unilever said it “considers the fine imposed to be totally unjustified, given Unilever’s comparatively limited level of involvement in any exchanges and the absence of effects for the consumer.”
Some of the other companies accepted the penalties; several had set money aside to cover them. Dettol maker Reckitt said its French subsidiaries had been co-operating with the authorities in the investigation and a provision it made in 2013 would cover the €121m in fines it faces.
The company said it “takes its obligations to comply with the law very seriously and we have instituted a robust compliance programme throughout our global operations, including France”.The company said it “takes its obligations to comply with the law very seriously and we have instituted a robust compliance programme throughout our global operations, including France”.
Germany’s Henkel, which faces fines of €109m, said it would examine the decision before deciding on further steps. It has made provisions of €39m. German rival Beiersdorf, the maker of Nivea, was fined €72m. Germany’s Henkel, the maker of Persil, faces penalties of €109m, far above the provisions it made of €39m. It said it would examine the decision before deciding on further steps. German rival Beiersdorf, the company behind Nivea, was fined €72m.
SC Johnson, Colgate and Henkel, which alerted the competiton watchdog, will benefit from varying degrees of clemency, with Mr Muscle maker SC Johnson receiving total immunity. Johnson & Johnson, Henkel, Reckitt Benckiser, Colgate-Palmolive, Procter & Gamble and Beiersdorf saw their fines reduced by 16-18% because they did not contest the watchdog’s findings and pledged to conform to the rules in the future. SC Johnson, Colgate and Henkel, which alerted the competiton watchdog, will benefit from varying degrees of leniency, with Mr Muscle maker SC Johnson receiving total immunity. Johnson & Johnson, Henkel, Reckitt Benckiser, Colgate-Palmolive, Procter & Gamble and Beiersdorf saw their fines reduced by 16-18% because they did not contest the watchdog’s findings and pledged to comply with the rules in future.
The regulator said the extent of the penalties reflected the size of the French cleaning products market, at €4.7bn a year, and the personal hygiene market, which is worth €7bn. The French spent on average €190 each a year on cosmetics and personal hygiene products at the time of the investigation. Both markets are dominated by eight companies with the biggest three accounting for 43% of the personal hygiene market, led by L’Oréal which alone has 28%.