France fines P&G and Colgate for laundry prices

Christina Rexrode, AP Business Writer

NEW YORK (AP) -- Procter & Gamble Co. and Colgate-Palmolive Co. were among companies fined Thursday by French authorities, who accused them of fixing laundry detergent prices for years.

Procter & Gamble, which is based in Cincinnati and is the world's biggest consumer products company, was fined 233.6 million euros ($311 million). Colgate-Palmolive, based in New York, was fined 35.4 million euros ($47 million).

The two U.S. consumer products makers, along with Unilever and Henkel, coordinated their discounts and other pricing strategies in France for most of 1997 to 2004, according to the French antitrust agency Autorite de la concurrence.

Unilever, one of the world's largest consumer goods companies, is based in London and the Netherlands. Henkel, a German company, was fined 92.3 million euros ($123 million).

According to the French agency, officials from the four companies' French subsidiaries met at hotels and restaurants in Paris three or four times a year. At the meetings, they would agree to limits on the size of the discounts they could offer and on price differences between brands. On some charts, they used code names: "Hugues" for Henkel, "Pierre" for P&G, "Laurence" or "Louis" for Unilever and "Christian" for Colgate, according to the French agency.

Because of the price fixing, French customers paid higher prices than they would have under free competition, the agency said.

The French agency said it exempted Unilever from a fine of 248.5 million euros because it was the first company to apply for leniency, after a Unilever employee disclosed the price fixing scheme after an audit. The other three companies also applied for leniency and cooperated with authorities, and the French agency said it reduced their fines by 15 to 25 percent.

P&G said it received the largest fine because it had the largest business. It also said it would appeal the French agency's decision because it overlaps with a ruling this spring by the European Commission.

In April, the European Commission determined that P&G, Unilever and Henkel fixed laundry detergent prices in eight European countries, including France, from at least 2002 to 2005. That scheme started after the companies' trade association launched a plan to improve the environmental performance of their detergents, the commission said. P&G was fined 211.2 million ($281.9 million) euros in that case.

"It will always be our policy to comply with not just the letter but also the spirit of the law everywhere we do business," P&G's general counsel, Debbie Majoras, said in a statement Thursday, referring to the French agency's fine. "We want to make it clear that the past behavior relating to this matter was contrary to our business standards and we took appropriate disciplinary actions and strengthened our global compliance program."

Colgate said in a statement that its policy is to comply with all laws and to promptly correct any issues. "The events investigated by the Authority concerned the heavy duty detergent market, a market in which Colgate-Palmolive was a minor player in France and divested in 2003," the company said in a statement.

P&G shares dropped 76 cents to $64.47 Thursday, amid a broad-market decline. Colgate stock fell 65 cents to $90.55.