Leading personal care firms fined for price fixing

By Guy Montague-Jones

- Last updated on GMT

Related tags: Federal cartel office, Cartel, Price fixing

Three leading personal care companies have been fined a total of
€37m by German competition regulators for colluding to artificially
increase prices.

The Federal Cartel Office in Germany fined Sara Lee, Unilever and two units of Henkel after finding the companies guilty of price fixing at the start of 2006. The multinationals colluded to increase the prices of shower gel, toothpaste and dishwashing liquid by 5 per cent. To sidestep the attempts by retail chains to prevent the price hikes, they kept each other informed about their actions and the moves made by retailers. Of the total €37m fine, €19m was imposed for price fixing and the other €18m was added for sharing information about their pricing discussions with retailers. Henkel businesses Reiningungsmit-tel and Schwarzkopf & Henkel received the largest fine for colluding to increase the prices of shower gel brand Fa and dishwashing product Pril. Price fixing admission ​ The companies anti-competitive behavior came to light after another member of the cartel Colgate-Palmolive spilled the beans to the German competition authorities. Following the tip-off the Federal Cartel Office conducted dawn raids in May last year on the accused firms collecting evidence of price fixing from company computers and documents. Under its leniency policy put in place to encourage companies to reveal illegal practices, the regulators did not impose a fine on Colgate-Palmolive despite its involvement in the cartel. Cartels​ Price fixing often characterises markets that are dominated by a small number of large firms eager to profit from their dominant market position. How widespread anti-competitive behavior is in the cosmetics industry is difficult to establish but it appears likely that other cartels are currently in operation. In March 2006 the French Conseil de la Concurrence fined the 13 fragrance brands and three retailers €46.2m after finding them guilty of breaching anti-competition agreements. Leading companies were again involved in price-fixing agreements including Guerlain, L'Oreal and Marionnaud. The German regulators said they would be extending their enquiry into price-fixing by investigating other companies shortly.

Related topics: Business & Financial

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