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article imageProcter & Gamble, Unilever get price fixing fine

By Lynn Herrmann     Apr 15, 2011 in Crime
Brussels - A three-year investigation of consumer giants Procter & Gamble and Unilever has resulted in a $456 million fine over a price fixing scheme in eight European countries involving their washing powder prices.
The investigation began following a tip-off by Henkel, a German-based company that owns the Persil brand throughout most of Europe. Unilever owns it in France, Ireland and Britain.
In a statement, EU Competition Commissioner Joaquin Almunia said: “By acknowledging their participation in the cartel, the companies enabled the Commission to swiftly conclude its investigation,” the BBC reports.
The Commission named the investigation “Purity” and began after it raided the three companies in June 2008 on suspicion of price fixing. The EU watchdog was also seeking information on Sara Lee, a US-based household products company.
The price-fixing cartel operated in France, Germany, Belgium, Greece, Portugal, Italy, Spain and the Netherlands between 2002 and 2005.
Procter & Gamble, with 127,000 employees in 80 countries, is the world’s largest consumer products corporation and owns the Tide, Gain and Era labels of washing powder. Unilever, an Anglo-Dutch group, owns the Omo and Surf brand names of detergent products.
P&G was fined just over $304 million USD and Unilever was fined almost $150 million USD. Admitting to running the cartel, the two companies were granted 10 percent discounts on the fines. Henkel, in exchange for the tip-off, was not fined.
The fine announcement came just days after P&G declared a 9% quarterly dividend increase for its common stock shareholders.
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