First up, there is price fixing cases. In January 2002, Unilever, Procter and Gamble and German company Henkel, agreed to fix prices on detergents for three years.

Unilever and Procter and Gamble were fines over 300 million Euros while Henkel got out for ratting them out. Did Unilever learn their lesson though? Not really. They are on trial again, this time in South Africa, this time for price fixing with a big Malaysian conglomerate Sime Darby. The watchdog handling this case wants 10% of their local turnover as a fine.On an ecological level, Unilever have played a role on the devastating impact that palm oil has had on the environment. Indonesia is losing 2% of its rain forest every year with palm oil production being the main cause for that which coincidentally involves many of Unilever’s suppliers. In 2016 they had to set away allegations that they had poisoned 100 of Indian workers with mercury and the list of controversies goes on and on. Price FixingFor almost a decade, executives from FMCG giants like Procter & Gamble Co.

secretly met in discreet restaurants around Paris, purportedly to fix the price of laundry detergent in France. P and its rivals were indicted of fixing detergent prices in France. The Autorité de la Concurrence slapped fines for a total of €361 million ($484 million) on P, Henkel AG and Colgate-Palmolive Co. for colluding to set the price of soaps in France between 1997 and 2004. The French regulator listed what it called a scheme that jacked prices for consumers before finally falling when the group’s interests differed. The French authority said in its report that the companies used aliases to hide their identity at meetings: “Hugues” for Henkel, “Pierre” for P&G and “Christian” for Colgate-Palmolive. Unilever PLC-which went by the name “Laurence”-was not fined, because it was the first to cooperate with the investigation and received immunity. The company said it is committed to complying with all laws.

Colgate said it, too, cooperated with French authorities in their investigation and is reviewing the judgment. Henkel, Germany is planning to appeal, saying it considers the fine disproportionate given its full cooperation with the investigation. The fine represents one of the largest set by French antitrust authorities and represents the latest in a long list of cartel-busting efforts by members of the European Union. In April the European Commission said that P&G, Unilever and Henkel took part in anticompetitive practices in the detergent market from 2002 to 2005 in 8 European countries. The 177-page report details the lengths to which the companies went to carry out their detailed price-fixing plan. Managers from the three companies met as early as the 1980s to share price information, the antitrust authority said.

According to a statement a Henkel manager made to the commission, the companies wanted “to limit the intensity of the competition between them and clean up the market.” Even so, by the early 1990s, a price war had broken out among them. In 1996, four brand directors met in the restaurant La Tête Noire in the western outskirts of Paris. The aim was to make sure that they pitched their detergents to supermarkets at determined and agreed prices and notified each other of any special offers, the antitrust authority said. They allegedly took turns choosing spots for the clandestine meetings, which occurred multiple times annually.

To ensure that very few people actually knew what was going on, those who attended the meetings-dubbed the “Store Checks”-took the checks home with them and expensed the same under different aliases. During the meetings, which sometimes lasted as long as eight hours, the groups discussed complex pricing mechanisms. For example, P&G marketed its Ariel laundry brand as geared towards the premium market, and so it fixed an agreement to make sure Ariel remained at least 3% more costly than Unilever’s Skip brand. Several rules were written had to be abided by.The concept of buy-one-get-one was no longer going to be used and the companies agreed that no one will use it as they would eat into its profits and undermine the effort that was being taken with respect to price fixing. Cost savings, such as from more-concentrated detergent, would not be passed on to customers.

Promotions for adding extra quantity free were also restricted. The group was helped by a French law that makes it illegal for shops to sell products below cost. As a result, the end consumer was the one that had to bear all such resulting increases in cost measures and had to bear the full brunt of it without any competitive subsidies.

 According to one anonymous Unilever employee, the companies stood by their words and rarely broke the tacit understanding between them. “They were aware that there had already been price wars and they didn’t want to revive them.” Yet while fixing prices proved relatively simple, monitoring special offers was proving to be a complicated task. One executive recalled unorganised and dysfunctional meetings as each side tried to work out how the other had bent the rules. By 2004, the scheme began to fall apart. The companies disagreed on price increases and promotions. Unilever was the first to break the unwritten rules, launching a June month deal of marginal discounts. At the end of the year, P responded by slashing the price on its entry-level Gama detergent by 25%.

At the beginning of 2005, Henkel fired back with 40% off one of its detergents. Shortly thereafter, both Unilever and P rolled out buy-one-get-one-free deals. P was fined €233.

6 million, Henkel €92.3 million and Colgate €35.4 million. P said the larger fine was a representation of its large business volume in the country of France. After its own investigation, the European Commission fined P €211.2 million and Unilever €104.0 million in April.

Henkel wasn’t fined, because it alerted the commission to the cartel and received immunity. This spooked Unilever, which in 2008 handed over a 283-page report to French antitrust authorities. 

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