* Henkel alerted regulator to cartel, not fined
* Cartel operated in 8 EU countries, lasted 3 years
* Case is third under EU's settlement procedure
(Adds details on price fixing, adds comment by EU official)
By Foo Yun Chee
BRUSSELS, April 13 Consumer goods giants
Unilever (ULVR.L) (UNc.AS) and Procter & Gamble (PG.N) were
fined 315.2 million euros ($456 million) by EU regulators on
Wednesday for fixing washing powder prices in eight EU
Germany's Henkel (HNKG_p.DE), which alerted the European
Commission to the cartel in laundry detergents, was not fined.
The penalty for Unilever was 104 million euros, while P&G was
fined 211.2 million euros. The announcement confirmed a Reuters
report from Monday.
The price fixing began when the companies, through a trade
association, were working to make their detergents more
environmentally friendly, EU Competition Commissioner Joaquin
Almunia told a news conference.
"The three companies took the opportunity of these
discussions on environmental agreements promoted by their trade
organisation to organise a cartel," Almunia said, adding that
the three agreed not to decrease prices when making their
packages smaller and even agreed later to raise prices.
As part of the Commission's settlement procedure, the EU
watchdog cut the fines by 10 percent in return for the firms'
admission that they participated in the cartel, which the
Commission had dubbed "Purity" in its investigation.
"By acknowledging their participation in the cartel, the
companies enabled the Commission to swiftly conclude its
investigation," Almunia said in a statement.
The fines were also reduced under the Commission's leniency
programme related to voluntary disclosure of information.
World No. 1 household products producer P&G owns the Tide,
Gain and Era brands of washing powder, while Anglo-Dutch
Unilever makes detergent products under the brand names Omo and
Surf. Henkel owns the Persil brand in most of Europe, while
Unilever owns it in Britain, Ireland and France.
The cartel operated in Belgium, France, Germany, Greece,
Italy, Portugal, Spain and the Netherlands between 2002 and
2005, the regulator said.
(Factbox on EU cartel fines, click on [ID:nLDE73C18Z] )
Unilever said it had used the investigation findings to
tighten up its internal procedures, adding that the fine was
covered by provisions made in its 2010 results.
"All key managers in Europe have been retrained on the
European competition rules and are well placed to participate
fully in industrywide environmental initiatives," the company
said in a statement.
P&G said it has taken the appropriate financial reserves
for the case.
"Perhaps more importantly, we have already taken the
appropriate internal action, including strengthening our global
compliance program, which includes extensive training,
reinforcement of key policies and regular auditing," P&G
spokesman Paul Fox said in a statement.
Henkel said it found out about the cartel activity during
internal compliance audits in 2008 and immediately informed the
Unilever shares were up 0.8 percent at 19.31 pounds in
London; Henkel stock was 0.9 percent higher at 43.85 euros. P&G
shares were up 1 cent at $62.90 on the New York Stock
The Commission can fine companies up to 10 percent of
annual turnover for breaching EU competition rules. This is the
third EU decision using the settlement procedure, after cases
in the electronic chipmaking and animal feed sectors last
The EU watchdog raided the three firms in June 2008 on
suspicion of price fixing, and also sought information from
U.S.-based household products firm Sara Lee. SLE.N It has
imposed fines close to 12 billion euros on cartels in the five
years to 2010.
(Additional reporting by Victoria Bryan in Frankfurt and Brad
Dorfman in Chicago; Editing by Rex Merrifield, Mike Nesbit and