Colgate Cops $18 Million Fine in ACCC Action over Laundry Powder Price Fixing

inherentchoice on 29/04/2016 - 01:28
Last edited 29/04/2016 - 01:33

So Colgate-Palmolive has been hit with one of the biggest fines in Australian corporate history.

And now Woolworths is possibly facing a similar penalty for their involvement in the cartel.

Here are links to some articles on the fine:

https://news.google.com/news/i/story?ncl=dQrHAFRWMXt3JdM8QjS…

http://www.businessinsider.com.au/colgate-just-copped-an-18m…

At least the attempted price gouging was stopped in this case. But it was only because industry insiders blew the whistle. So I wonder how widespread is such corruption and which companies and industries are getting away with it.

Hopefully by being bargain savvy shoppers we can avoid falling victim to corrupt corporate greed and price gouging, or at least minimise its impact on us.

Food & Grocery

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Comments

  • Diji1 on 29/04/2016 - 08:38

    By it's nature it's going to be hidden so it's tough to say but I would assume it's commonplace.

    In any case what is not hidden - or at least some of it isn't - is that the owners of major brands influence government policy as much as they can on a continous basis to benefit themselves.

  • Clear on 29/04/2016 - 08:45
    +1

    Very common place. The management up in Sydney regularly harass suppliers for lower prices or frequent sales on their profits. Sometimes they'll threaten less shelf space or to drop the product altogether if they don't get their way.

    • ilikeradiohead on 29/04/2016 - 14:12

      Are you talking about illegal conduct? Do you have evidence?

      • Clear on 29/04/2016 - 14:16

        Everyone knows they do it and it's reported frequently. The problem is getting sufficient evidence. That's why the ACCC can't always take action.

        It's usually empty threats anyway.

  • Islund on 29/04/2016 - 08:48
    +2

    The drop in pack size had happened to everything. Take Cadbury Chocolates for example - used to be 250g, then 220/225g and now 200g.

    In the case of Colgate they allegedly profiteered to the tune of 140mio and got slapped with a 18mio fine? I am sure they are pissing themselves laughing.

    • inherentchoice on 29/04/2016 - 09:09
      +1

      Pretty sure $140m is what the cartel stood to gain in profits if they got away with it. But thankfully they didn't.

    • ilikeradiohead on 29/04/2016 - 14:07

      Cadbury (and other brands like Doritos) lower the package price instead of increasing the price to hide the fact that the cost is going up. It's just inflation (in some instances, although the cost increase is obfuscated so it's hard to tell).

  • spackbace on 29/04/2016 - 10:21

    The company’s former sales director, Paul Ansell, was disqualified from managing corporations for seven years and will pay $75,000 towards the ACCC’s costs after admitting his involvement.

    7 years… wow! (ah it's ok, he's retired)

    I wonder who dobbed :P lol must've been a disgruntled employee that knew about the conversations. Ah wait, it was Unilever to avoid persecution:

    It was called “Project Mastermind” and is now the subject of Federal Court action brought by the ACCC after Unilever blew the whistle, thereby protecting itself and its staff against prosecution.

    • inherentchoice on 29/04/2016 - 10:25
      +1

      Unilever dobbed in their competitors by applying for immunity.

      • ilikeradiohead on 29/04/2016 - 14:09

        I feel like offering immunity to whoever breaks the cartel is a pretty good incentive. Cartels struggle to work in practice anyway, as everyone has an incentive to 'cheat', but the added bonus of getting immunity (in addition (I assume) to the cartel profits) makes it very hard to maintain the farce for long.

  • spychiatrist on 29/04/2016 - 12:03

    Who gets the fines? $18M returned to disadvantaged suppliers or to government coffers?

    • ilikeradiohead on 29/04/2016 - 14:12

      Disadvantaged suppliers? Do you mean consumers? They fixed the price of laundry detergent.

      Anyway I think the fines go straight to the government.

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