Woolies comes clean over laundry scam

WOOLIES ordered to pay massive fine over a deal which duped Aussie customers into paying more for laundry detergents.

Three of the biggest laundry detergent makers were involved in a price-fixing cartel dating back to 2009. The ACCC has secured fines against Woolworths and Colgate-Palmolive. Picture: Sam Mooy

WOOLWORTHS has been ordered to pay a $9 million fine for its part in an deal which duped Aussie customers into paying more for laundry detergents.

The scam, nicknamed “project mastermind” by executives at Colgate-Palmolive and its competitor Unilever Australia, involved a deal between the companies to stop selling laundry concentrate and start selling “ultra concentrate” in 2009.

Ultra concentrate is cheaper to produce, store and transport, but the savings were never passed on to customers. The deal allowed Colgate-Palmolive to halve the size of the product, but keep its detergents at the price of the discontinued laundry concentrate.

Colgate-Palmolive was fined $18 million in April over the scam. In the Federal Court on Friday, Woolworths admitted to “being knowingly concerned in the making of, and giving effect to” the agreement between Colgate-Palmolive, PZ Cussons and Unilever.

Justice Jagot the “the penalty reflects the objective seriousness of the contraventions”.

PZ Cussons has maintained its innocence and is fighting the case, which is listed for hearing next Tuesday 7 June.

“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,” ACCC Chairman Rod Sims said in a statement.

“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.

“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 businesses.”

In a statement, Woolworths said it “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,” a spokesman said.

“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.”

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— with AAP