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Colgate fined for dirty detergent deal

cold power boxColgate-Palmolive has been fined $18 million over an illegal deal to control the price and supply of laundry detergents.

In a deal with competitor Unilever Australia, Colgate stopped selling laundry concentrate in 2009 and started selling ultra concentrate, the company has admitted after a legal battle with the consumer watchdog.

Ultra concentrate is cheaper to produce, store and transport. At the time, Colgate produced the Cold Power, Omo and Radion products.

It has since sold its laundry detergent business.

Australian Competition and Consumer Commission chairman Rod Simms said the resulting fine was one of the largest ever issued for a breach of competition rules.

“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,” Sims said.

Colgate’s former sales director Paul Ansell also admitted to sharing sensitive market information, including the timing of price increases, with Unilever executives.

“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.”

Ansell has been disqualified from managing corporations for seven years and a ordered to pay $75,000 towards the ACCC’s legal fees.

Unilever was granted immunity in the case after it came forward with information on the conduct.

Woolworths and Cussons were also allegedly involved in the practice and are due to appear in court in June.

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