Woolies fined $9 million for laundry detergent cartel involvement

The Federal Court has ordered Woolworths pay penalties totalling $9 million for its involvement in a laundry detergent cartel, after the Australian Competition and Consumer Commission (ACCC) launched legal action against the company.

Woolworths admitted to being knowingly concerned in the making of, and giving effect to, an understanding between Colgate-Palmolive, PZ Cussons Australia and Unilever Australia that they would each cease supplying standard concentrate laundry detergents to Woolworths in early 2009 and supply only ultra concentrates to Woolworths from that time.

Justice Jagot said in court that “the penalty reflects the objective seriousness of the contraventions”.

ACCC chairman Rod Sims said: “By imposing these penalties, the court has acknowledged that Woolworths was knowingly concerned in an anti-competitive understanding which they admitted was reached between laundry detergent manufacturers.”

“This penalty is the largest the ACCC has obtained against a party that was an accessory to competition law breaches by being knowingly concerned in anticompetitive conduct,” Mr Sims said.

“This is a timely reminder that businesses must ensure that their competition law compliance programs educate their staff about the risks involved in communications or other conduct which facilitates an anti-competitive understanding between other.”

The penalty orders were based on admissions made by Woolworths, and joint submissions on penalty made by Woolworths and the ACCC. The Federal Court also made orders by consent that Woolworths update its trade practices compliance program and pay a contribution of $250,000 towards the ACCC’s costs in the proceedings.

In a statement Woolworths, said: “Woolworths acknowledges that the behaviour of one of its former buyers was not consistent with the high standards of competition law compliance we seek to achieve.

“The proceedings have been settled with Woolworths making limited admissions in relation to one of the claims made by the ACCC.

“Since the issues leading to today’s court hearing occurred, now over seven years ago, Woolworths has reviewed and upgraded its compliance program and training and will continue to do so to help ensure that all employees comply with the company’s code of conduct at all times.”

In December 2013, the ACCC commenced proceedings in the Federal Court against Colgate, Cussons, Woolworths and Mr Paul Ansell, a former Colgate sales director over the cartel agreement.

The ACCC alleged that Colgate, Cussons and Unilever made and gave effect to cartel and other anticompetitive arrangements. The ACCC also alleged that Mr Ansell and Woolworths were knowingly concerned in these arrangements.

Unilever applied for immunity under the ACCC’s immunity policy for cartel conduct and consented to be named as the immunity applicant in this matter.

On 28 April 2016, the Federal Court ordered that Colgate pay total penalties of $18 million for its involvement, which included $12 million in penalties for making and giving effect to an understanding to limit the supply of laundry detergents.

Colgate was also ordered to pay penalties of $6 million for making and giving effect to an understanding to share sensitive market information, including information about when they would increase their prices.

Mr Ansell admitted to being knowingly concerned in this conduct and by consent was disqualified from managing corporations for seven years.

The ACCC’s case against Cussons is listed for hearing beginning on June 7, 2016. The ACCC is seeking pecuniary penalties, declarations, injunctions, compliance programs and costs.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top