Washing powder giants fined by EU

Consumer goods giants Unilever and Procter & Gamble have been fined €315.2 million by EU regulators for fixing washing powder prices in eight EU countries.

Germany's Henkel, which alerted the European Commission to the cartel in laundry detergents, was not fined. The penalty for Unilever was €104 million while Procter & Gamble was fined €211.2 million.

As part of the Commission's settlement procedure, the EU watchdog had cut the fines by 10 per cent in return for the firms' admissions that they participated in the cartel, which the Commission had dubbed "Purity" in its investigation.

"By acknowledging their participation in the cartel, the companies enabled the Commission to swiftly conclude its investigation," EU competition commissioner Joaquin Almunia said in a statement.

The fines had also been reduced under the Commission's leniency programme related to voluntary disclosure of information.

The world's number one household products producer Procter & Gamble owns the Tide, Gain and Era brands of washing powder while Anglo-Dutch Unilever makes detergent products under the brand names Omo and Surf. Henkel owns the Persil brand in most of Europe, while Unilever owns it in Britain, Ireland and France.

The cartel operated in Belgium, France, Germany, Greece, Italy, Portugal, Spain and the Netherlands between 2002 and 2005, the regulator said.

Unilever said it had used the investigation findings to tighten up its internal procedures, while adding that the fine was covered by provisions made in its 2010 results.

"All key managers in Europe have been retrained on the European competition rules and are well placed to participate fully in industry-wide environmental initiatives," the company said in a statement.

Henkel said it found out about the cartel activity during internal compliance audits in 2008 and immediately informed the regulators.

Unilever Plc shares were up 1.2 per cent at £19.38 in London, in line with a firmer FTSE 100 index; Henkel stock was 0.5 per cent higher at €43.66 by mid-morning.

The Commission can fine companies up to 10 per cent of annual turnover for breaching competition EU rules. This is the third EU decision using the settlement procedure after cases in the electronic chipmaking and animal feed sectors last year.

The EU watchdog raided the three firms in June 2008 on suspicion of price fixing, and also sought information from US-based household products firm Sara Lee. It has imposed fines close to €12 billion on cartels in the five years to 2010.

Reuters