Unilever, P&G fined for fixing prices on detergent

By Reuters
Posted April 13 at 8:29 a.m.

Consumer goods giants Unilever and Procter & Gamble were fined $456 million by EU regulators on Wednesday for fixing washing powder prices in eight EU countries.

Germany’s Henkel, which alerted the European Commission to the cartel in laundry detergents, was not fined. The penalty for Unilever was 104 million euros while P&G was fined 211.2 million euros.

As part of the Commission’s settlement procedure, the EU watchdog had cut the fines by 10 percent in return for the firms’ admissions that they participated in the cartel, which the Commission had dubbed “purity” in its investigation.

“By acknowledging their participation in the cartel, the companies enabled the Commission to swiftly conclude its investigation,” EU Competition Commissioner Joaquin Almunia said in a statement.

The fines had also been reduced under the Commission’s leniency programme related to voluntary disclosure of information.

World No.1 household products producer P&G owns the Tide, Gain and Era brands of washing powder while Anglo-Dutch consumer goods group Unilever makes detergent products under the brand names Omo and Surf. Henkel owns the Persil brand in most of Europe, while Unilever owns it in Britain, Ireland and France.

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

Unilever said it had used the investigation findings to tighten up its internal procedures, while 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.

Unilever Plc shares were up 0.9 percent at 19.32 pounds by 1045 GMT in line with a firmer FTSE 100 index

The Commission can fine companies up to 10 percent of annual turnover for breaching EU rules. This is the third EU decision using the settlement procedure after cases in the chipmaking and animal feed sectors last year.

The EU watchdog raided the three companies in June 2008 on suspicion of price fixing, and also sought information from U.S.-based household products firm Sara Lee (SLE.N). It has imposed fines close to 12 billion euros on cartels in the five years to 2010.

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