Watchdog price fixing investigation targets cosmetic giants

By Simon Pitman

- Last updated on GMT

UK consumer watchdog, the Office of Fair Trading (OFT) has
contacted both Unilever and Procter & Gamble as part of a
two-year probe into price fixing.

The results of the investigation are due to be announced by the end of this week, lifting the lid on one of Europe's most developed markets for personal care products.

In 2007 the UK overtook both France and Germany to become Europe's largest beauty market, according to Euromonitor.

Is UK cosmetics growth down to pricing?

But what the probe might determine is just how much of this growth is attributable to increased prices as well as indicating whether or not prices are out of kilter with other markets in Europe.

Leading personal care players and retailers were contacted by the watchdog in the course of the last year, according to a report in the Wall Street Journal.

Procter & Gamble confirmed that they had received inspections by officers from the watchdog, while Unilever confirmed that it had received requests for specific information by letter.

Investigation includes UK grocery market The investigation is studying the UK grocery market as a whole, which means that the other key category that will come under investigation will be the food and drinks market.

Britain's biggest retailers are also coming under scrutiny, with the number one player Tesco confirming that it has been approached for information.

The OFT has carried out a number of probes into price fixing in various UK industries, including an investigation into building companies forming cartels and price-fixing between tobacco companies and retailers.

Investigation in to tobacco sales Most recently the investigation into the tobacco sales resulted in a statement of objection, highlighting how various leading tobacco companies and retailers had conspired to unlawful practices relating to pricing.

The OFT said that it was awaiting a response from the tobacco companies and the retailers to its objections and would decide whether or not any laws have been breached once replies have been received.

If the OFT decides to issue a statement of objection to the UK grocery market that is likely to happen in the course of the next couple of weeks.

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