Colgate-Palmolive has been fined $18 million by Australia’s anti-trust regulator ACCC for participating in an illegal deal. The fine is the third biggest penalty for price-fixing in Australia’s history.
The companies involved purportedly sought to control the price and supply of laundry detergents through the deal. Colgate admitted that it had a deal with competitor Unilever Australia to stop the sale of laundry concentrate in 2009 and to replace it with cheaper ultra concentrate. Despite the low costs of production, storage and transportation Colgate never passed on the savings to customers, reports Sky News.
The verdict also requires Colgate to pay $450,000 as costs of ACCC.
The proceedings against the three major laundry detergent producers were launched in December 2013. There were charges that Colgate, Cussons, and Unilever plotted along with supermarket Woolworths to switch the supply of laundry detergents to ultra-concentrates and control the sale of standard concentrates in 2009.
They were also accused of selling ultra-concentrates for the same per-wash price as the standard detergents without passing the cost benefit to the consumers.
Speaking to The ABC, chairman of ACCC , Rod Sims said the detergent manufacturers cornered the cost savings from reduced packaging and lower transport costs.
The ACCC also highlighted the case of New Zealand market, where similar products were sold with significant discounting.
The case against Cussons and Woolworths is still on. Unilever, however, sought immunity protection as an informer. Supermarket Coles was not mentioned in the proceedings, on which Sims said: “there was different behaviour between the two supermarkets and quite a different set of circumstances.”
Sims also referred to the rise in cartel leniency applications as indicative of rising cartelization.
“We run a very effective leniency programme. The more we have these victories through leniency, the more that others who are involved in cartels come forward, because they realise that there is a chance that people will apply for leniency so they better be first,” he added.