Personal care players fined €8m over price fixing

By Katie Nichol

- Last updated on GMT

Related tags: Cartel, Henkel, Sara lee

Spain’s National Competition Commission (CNC), has fined personal care players Sara Lee, Puig and Colgate-Palmolive a total of €8m over price fixing.

According to the CNC, the cartel agreement, which had been in existence since 2005, was regarding a disguised price increase of more than 15 per cent on certain bath and shower gel products.

This was achieved by reducing the capacity of containers without altering the product price, thereby masking the increase in unit price paid by consumers.

Between June 2006 and May 2007, cartel members Henkel, Sara Lee and Puig reduced the size of the containers for their Fa, La Toja, Mango Sanex, Lactovit, Kinesia and Heno de Pravia brands by 15 per cent. Colgate-Palmolive did not reduce the size of its containers by the agreed date, the CNC stated.

Henkel exempt from fines

Although German company Henkel was part of the cartel, it escaped a fine for being the first of the implicated companies to provide the CNC with evidence of the Cartel’s existence.

The company’s exemption comes under the leniency programme that is part of Spanish Antitrust law.

The leniency programme dictates that the first cartel member to supply information that leads to an investigation, or proves the cartel's existence, is immune from penalties.

The programme came into effect the same day the proceeding against the cartel members was issued, making it the first time businesses have been fined under it.

Sara Lee’s fines reduced 40 per cent

Sara Lee’s fines were also lowered, as it submitted a statement to the CNC on the same day as Henkel, with both companies admitting to the cartel’s existence and their participation, as well disclosing the involvement of Puig, Colgate-Palmolive and Spanish cosmetics company Colomer.

As a result, Sara Lee’s fines were reduced 40 per cent from €6,193 124 to €3,715 874m, and Henkel escaped completely a fine of €4,276 979.

Puig and Colgate-Palmolive were ordered to pay €2,437 317 and €2,175 621 respectively.

Although the involvement of Colomer was disclosed to the CNC, it was said in a statement that further investigation into its position was required.

Price-fixing harms consumers

Price-fixing is taken very seriously, and the CNC condemned the behaviour of the companies involved by emphasizing the detrimental effects of their actions.

The increased price gap between sector leaders and competing brands makes it easier for the latter to raise their own product prices without risking losing a foothold in the market, according to the CNC.

This lack of competition translates into higher prices and a reduction in product promotions, it said, which is not good news for consumers.

Related topics: Business & Financial

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