Colgate fined 3 million euros

The Competition Council has issued fines worth 4.2 million euros (15 million RON) to the Romanian branch of the consumer goods giant Colgate-Palmolive and to four other companies, after finding them guilty of the indirect fixing of minimum sales prices on the personal care products market.

This is one of the Competition Council”s heaviest fines to date for price fixing, following the recent case that was widely covered by the media in which cement producers were fined over 28 million euros.

Colgate-Palmolive Romania has been fined 2.97 million euros (10.6 million RON), while the distributors Pronto Universal, LA-RO Impex 2001, Prestige Trading and GEF Facilities were fined 300,000 euros, 530,000 euros, 420,000 euros and 4,770 euros respectively.

“It was found that the five companies broke Article 5, Paragraph 1a, of the Competition Law by indirectly fixing the minimum sales price based on vertical arrangements between the supplier, Colgate-Palmolive Romania, and the other companies, distributors and signatories of the 1999 Agreements and horizontal arrangements of the signatory distributors,” Competition Council officials announced.

Colgate-Palmolive Romania has issued a release in which it says the company will use all the legal means available to it to challenge the result of the Council”s investigation.

“The management of Colgate-Palmolive (Romania) is most disappointed with the results of the investigations by the Competition Council (…) Colgate-Palmolive (Romania) will remain true to the highest ethical principles of business and will continue to provide the Romanian consumers with high quality products while applying a fair pricing policy,” the release shows. The Competition Council did not conclude that Colgate-Palmolive had been in breach of the Competition Law in terms of promoting a discriminatory policy with regard to its dealers, however it has requested that Colgate Palmolive stop the practice of drawing up and sending lists of its distributor prices.

“These lists are sometimes nothing more than concealed agreements on price fixing. Such practices are totally detrimental to the consumers” interest and we will not hesitate in applying the highest fines possible whenever we find this,” said the chairman of the Competition Council, Mihai Berinde.

The investigation was initiated in December last year after a complaint was lodged by a former Colgate-Palmolive Romania distributor, Prestige (also fined in this case). Prestige had accused Colgate-Palmolive of abusing its dominant position on the market.

Colgate-Palmolive is one of the leading players on the Romanian consumer goods market with annual sales in the region of 35 million euros and 300 employees.

adrian.mirsanu@zf.ro