Chilean companies colluded illegally in toilet paper market

A SHADY meeting at a golf course led to a shocking case of corporate collusion which left millions of consumers paying more to wipe their bums.

A woman buys toilet paper at a supermarket in Santiago on October 29, 2015. The biggest producers of toilet paper and napkins of Chile shared the market and set prices for a decade, in a new corruption case that has outraged Chilean consumers. The companies CMPC Tissue and SCA Chile, controlling 90% of the market for toilet tissue, are under investigation by the National Economic Prosecutor (FNE). AFP PHOTO / MARTIN BERNETTI

TWO forestry companies colluded for more than a decade to control the prices of toilet paper and other products following a meeting at a golf course to end a price war, according to Chile’s competitive practices regulator.

Economy Minister Luis Felipe Cespedes said Thursday that the collusion between the market’s biggest players was outrageous and affected the poorest Chileans the most.

Chilean President Michelle Bachelet called the alleged collusion by companies that control 90 per cent of the toilet paper market “extremely serious.”

The regulator said Wednesday that an antitrust court accepted its filing accusing the companies of colluding to control prices of toilet paper, napkins, absorbent towels and other products from 2000 to 2011.

“It’s one of the biggest collusion cases ever uncovered in the country,” the agency said in a statement, adding that the companies have combined annual sales of about $565 million.

CMPC Tissue SA, however, will not be fined because the company acknowledged the anticompetitive conduct earlier this year. The regulation agency asked the court to sanction SCA Chile SA, but the company is expected to get a reduced fine because it also acknowledged wrongdoing.

CMPC Chile said that it had fired the general manager of its tissue division and other company executives involved in the collusion scheme.

“The fact that some of our executives carried out acts that go against free competition is illegal and also deeply affects our way of acting as a company, our corporate policies and our organisational culture,” CMPC said in a statement.

Swedish-owned SCA could not be reached for comment.

The regulator said that a price war for toilet paper broke out between the competing paper giants in 2000. The collusion apparently began with the then-manager of CMPC began meeting with the owner of PISA — a company that was bought in 2012 by SCA — at a Golf Club in the Chilean capital. In the following years, other executives were involved in the scheme using fake email accounts and prepaid phones.

“This sort of abuse harms people, the economy and the image of our country,” Bachelet said.