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Tide Surf Makers Fined 456 Million in Price Fixing Laundry Detergent

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by hearit

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In The News

Price-fixing to the tune of a $456 million dollar fine -- a cartel in consumer laundry detergent. The makers of Tide and Surf were in on a scheme that upped prices to consumers over three years. But not to worry, there’s a thievery discount of 10%.

The scam: set things up under the guise of environmental packaging, lay low for a bit – then bump up laundry detergent prices to consumers when nobody notices. But make sure to do it all once so that consumers don’t really have a choice.

Procter & Gamble is best known in the U.S. for producing giant brand names of Tide and Ariel. Unilever makes Surf powdered laundry detergent. Between the two, Procter & Gamble and Unilever have been collectively fined $456 million (315.2 million euros) in what the European Union says has been a price fixing scheme skipping across eight nations.

The German-based Henkel, a company in the top three of the laundry detergent industry, provided reports that something fishy was going on and turned in the makers of Tide and Surf. Henkel claims it discovered the cartel in 2008 while in the midst of an internal audit, the soap maker immediately notifying authorities.

It turns out the world’s largest laundry soap manufacturers were “coordinating prices” better put, all the soap giants were raising prices at once, essentially eliminating consumer choice based.

Because Henkel turned itself in, in 2008, the laundry detergent manufacturer was granted immunity. Henkel won’t pay a penny in fines – zero, zilch. It’s unclear how much profit the German company made during the three-year span when prices among the soap giants were “coordinated.”

Procter & Gamble and Unilever were hit with an enormous fine -- the companies agreeing to settle after a European Union investigation spurred by Henkel’s tip of no less than a cartel existing in the powdered laundry detergent market and industry.

The household laundry detergent cartel operated from three years -- between 2002 and 2005 and upping prices for international countries including Belgium, France, Germany, Greece, Italy, Portugal, Spain and the Netherlands.

Tide’s Procter & Gamble will cover the heaviest part of paying the fine, with Surf’s Unilever maker covering about one-third of a fine that totals nearly half a billion dollars.

But not to worry – consumers may not have had a choice on upped prices, but the price-fixing companies are getting a discount of ten percent. The makers of Tide and Surf got nearly fifty million dollars knocked off their “bill,” for cooperating – this time with the European Union instead of each other. Unlike America, Europe offers a substantial to even parties who admit guilt, as long as their timely about paying up. Or, as the European Union puts it: "acknowledging the facts and enabling a swift conclusion of the investigation."

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