Colgate fined $18 million over detergent cartel

Sarah Homewood
By Sarah Homewood | 28 April 2016

Colgate-Palmolive has been fined $18 million by the Federal Court, for colluding with competitors about the price and type of detergent products in the marketplace.

Colgate was taken to court by the Australian Competition and Consumer Commission (ACCC), over the allegations that it colluded with fellow detergent manufacturers, Woolworths and Cussons, to ensure that the businesses were all supplying a similar product to the marketplace. The businesses were also accused of sharing other market sensitive information such as individual businesses pricing strategies.

The business today admitted to entering understandings which limited the supply, and controlled the price, of laundry detergents, and agreed with the ACCC to joint submissions on penalty being put to the court. The court described the conduct as serious and the penalty as significant, but proportionate.

ACCC chair, Rod Sims, says: “By ordering these substantial penalties, the court has recognised the seriousness of this conduct, which affected the supply and pricing of laundry detergents, a consumer staple.”

“The information sharing understanding involved phone calls between senior managers of competing companies, many of which started as social calls, but turned to unlawful exchanges of pricing information. Any contact between competitors carries risk and while discussion of price is particularly serious, there are many topics which may lead to an anticompetitive understanding.”

Sims added that this fine is the equal third largest penalty that the court has ordered for breaches of this nature and is an indicator of how seriously the court views the conduct.

Specifically, Colgate admitted that it made, and gave effect to, an understanding with Unilever and PZ Cussons Australia where the businesses agreed to cease supplying standard concentrate laundry detergents in early 2009 and supply only ultra concentrates from that time.

Colgate also admitted that it and Unilever shared sensitive market information, including information about when they would increase the price of their laundry detergents, through telephone contact.

The penalties ordered against Colgate are made up of a $12 million penalty for the understanding to withhold supply, and $6 million for the information sharing between competitors.

Colgate also has to pay a contribution of $450,000 towards the ACCC’s costs.

The ACCC’s case against Cussons and Woolworths is listed for hearing in June 2016.

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