Unilever and Procter & Gamble in price fixing fine

[.Morticia.]

( This is how the economy works in real life. Of course small companies are fed the competition bullshit but the reality is that capitalism is one big scam. Further, I would like to know of the criminals are going to pay back the money to buyers and compensate their competitors )


The consumer products giants Unilever and Procter & Gamble (P&G) have been fined 315m euros (£280m, $456m) for fixing washing powder prices in eight European countries.

It follows a three-year investigation by the European Commission following a tip-off by the German company, Henkel.

Unilever sells Omo and Surf, P&G makes Tide, and Henkel sells Persil in certain European countries.

The fines were discounted by 10% after the two admitted running a cartel.

Unilever was fined 104m euros and P&G was fined 211.2m euros.

Henkel was not fined in return for providing the tip-off.

The Commission called the investigation "Purity".

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

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

P&G, the world's largest consumer products group, owns the Tide, Gain and Era brands of washing powder while the Anglo-Dutch group 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 EU watchdog raided the three companies in June 2008 on suspicion of price fixing, and also sought information from the US-based household products firm Sara Lee.

Unilever has already set aside an undisclosed sum to cover any fine.

http://www.bbc.co.uk/news/business-13064928


in related news pensions, the pensions that workers paid into with their own money are being cut

Unilever closes final-salary pension scheme to staff

http://www.bbc.co.uk/news/business-13048666

[egbert]

Look at that, Seth - it's those damn greedy, crooked Unions again, sabotaging honest , innocent Capitalists!

[egbert]

Look at that, Seth - it's those damn greedy, crooked Unions again, sabotaging honest , innocent Capitalists!

[Coito ergo sum]

( This is how the economy works in real life. Of course small companies are fed the competition bullshit but the reality is that capitalism is one big scam. Further, I would like to know of the criminals are going to pay back the money to buyers and compensate their competitors )


The consumer products giants Unilever and Procter & Gamble (P&G) have been fined 315m euros (£280m, $456m) for fixing washing powder prices in eight European countries.

Capitalism is a scam? So, now Europe is "capitalist?" In other arguments on this forum it's America that's capitalist, and Europe is socialist, illustrating the sheer awesomeness of socialism. So, now it's capitalist. Got it.

Well, either way, crimes are committed by people. It's going to happen. Show me how your preferred system would stop that from happening. In the case you cited, it looks like the companies involved got it in the keister good and hard from the government dick. Justice is served.

It follows a three-year investigation by the European Commission following a tip-off by the German company, Henkel.

Unilever sells Omo and Surf, P&G makes Tide, and Henkel sells Persil in certain European countries.

The fines were discounted by 10% after the two admitted running a cartel.

Unilever was fined 104m euros and P&G was fined 211.2m euros.

Henkel was not fined in return for providing the tip-off.

So, Henkel WOULD HAVE BEEN FINED, had they not ratted. Nice.

The Commission called the investigation "Purity".

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

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

P&G, the world's largest consumer products group, owns the Tide, Gain and Era brands of washing powder while the Anglo-Dutch group 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 EU watchdog raided the three companies in June 2008 on suspicion of price fixing, and also sought information from the US-based household products firm Sara Lee.

Unilever has already set aside an undisclosed sum to cover any fine.

http://www.bbc.co.uk/news/business-13064928

So, they'll pay the fine. Sounds like what they should do.

in related news pensions, the pensions that workers paid into with their own money are being cut

Unilever closes final-salary pension scheme to staff

http://www.bbc.co.uk/news/business-13048666

"Under the proposed new arrangements, existing final salary scheme members would be offered a two-part scheme consisting of a defined benefit career average plan plus a defined contribution investing plan with effect from 1 January 2012," the company said.

Separately, the Pension Protection Fund (PPF) said that in March the 6,533 final-salary schemes in the private sector had a combined surplus of £45.5bn.

Doesn't sound all that draconian, actually.

[Coito ergo sum]

Look at that, Seth - it's those damn greedy, crooked Unions again, sabotaging honest , innocent Capitalists!

I don't know what Seth's position is. But, mine is that industries need to be appropriately regulated, because too often, people can't be trusted, and capitalists are no more or less scummy than union folk.

[Warren Dew]

Good example of how the U.S. antitrust laws, which are there to help maintain a free market, generally work, and Europe's feel good socialism breeds a culture in which people avoid free market competition by forming cartels.

[.Morticia.]

Good example of how the U.S. antitrust laws, which are there to help maintain a free market, generally work, and Europe's feel good socialism breeds a culture in which people avoid free market competition by forming cartels.

indeed

there are no cartels in the usa

[egbert]

Well, a fine that big should be headline material, and the little people can go to bed reassured that, once again, justice has prevailed. Of course, the public has a short memory, and how likely is it that P&G will just meekly hand over the money. And when the fine is drastically reduced, or waived, on appeal, after years of boring lawyer stuff, it'll hardly be headline material, at best showing up in the back pages of the business section, which the average wanker will skip over in favour of the sports section.
So, the P&G legal beagles will celebrate their bonuses, and the price of detergent will rise slightly so that guess who? winds up actually paying the fine.

[mistermack]

I think those fines are rather small actually, when you consider the size of the market.
The problem is though, that there is no real 'market' in these commodities. It's such a small number of companies that any market is going to be artificial. They will just fix the price by observing each other, rather than direct communication. If someone goes for a bigger market share, the others immediately undercut. So they all get the message and keep the prices up.

The trouble now is that with such a small market, if they did aggressively compete, you're likely to end up with even fewer players, resulting in an eventual monopoly, or duopoly, like in computer operating systems.

I would like to see governments step in when this situation arises, and start making their own soap powder on a vast scale. If Unilever etc. can beat them, then fair enough.
.

[Warren Dew]

I would like to see governments step in when this situation arises, and start making their own soap powder on a vast scale. If Unilever etc. can beat them, then fair enough.
.

I agree with your comments regarding the instability of oligopolies. However, government soap powder would be a bad solution; governments should stick to what they're good at, and soap powder isn't one of those things.

Antitrust law along the line of Britain's, which I believe limits market share to 60%, might work to prevent a complete monopoly.

[egbert]

Good example of how the U.S. antitrust laws, which are there to help maintain a free market, generally work, and Europe's feel good socialism breeds a culture in which people avoid free market competition by forming cartels.

Gawd, yes...look at how well regulation worked for the S&L scam, Enron, Wall Street......

[mistermack]

I agree with your comments regarding the instability of oligopolies. However, government soap powder would be a bad solution; governments should stick to what they're good at, and soap powder isn't one of those things.

That misses the point a bit. If they were bad at making soap powder, nobody would buy it, would they?
Also, you offer no evidence, you just make the claim.
In Britain, the government will do your brain operation, try you for a crime, and lock you up for life, and save your life after a road crash.
And you claim they can't make fuckin soap powder?
Where's your evidence?

[egbert]

Good example of how the U.S. antitrust laws, which are there to help maintain a free market, generally work, and Europe's feel good socialism breeds a culture in which people avoid free market competition by forming cartels.

Gawd, yes...look at how well regulation worked for the S&L scam, Enron, Wall Street......