Chile court fines CMPC and Sweden's SCA for fixing prices on toilet paper

SANTIAGO (Reuters) - The Chilean Supreme Court fined regional paper giant CMPC and a former division of Sweden's SCA SCAb.ST for fixing prices for at least a decade in the country's tissue and toilet paper market, the antitrust authority said late Monday.

The country’s highest court applied fines of about $15 million to each company for “having assigned market share quotas and having set sales prices for these products between 2000 and 2011,” according to a statement from the National Economic Prosecutor’s Office.

Price fixing lies at the heart of recent protests over inequality in Chile that have left at least 27 dead and led to billions in damages to business.

Since Chile’s return to democracy in 1990, allegations of price fixing have cropped up markets from chicken to diapers, milk, drugs, asphalt and even gynecological visits, outraging many Chileans, who are now demanding changes to the country’s economic model.

Chileans will vote on whether to rewrite the country’s dictatorship-era constitution in April. Many have called for tougher consumer protections to be worked into a new Magna Carta.

The so-called "Paper case" gained notoriety in October, 2015, when Chile's FNE regulator charged CMPC CMPC.SN and SCA SCAb.ST subsidiary PISA with colluding for at least a decade to control nearly 90% of the Chilean tissue and toilet paper market, inflating prices.

The scheme generated benefits for the companies of up to $460 million, a study by the nation’s competition regulator said at the time. SCA accused CMPC of having organized the scheme and coercing it to participate, according to the prosecutor. In a statement on Monday, CMPC said that it collaborated with the investigation and “denied the existence of coercion,” although the company said it respected the ruling and complied with the court’s decision.

“This entity not part of SCA operations presently,” said Bjorn Lyngfelt, a spokesman for SCA.

In 2017, SCA split up its forestry and hygiene divisions, forming Essity ESSITYa.ST, the hygiene company that now owns PISA.

“The fine corresponds to approximately USD 18m and a provision has already been recognized in Essity’s accounts,” Karl Stolz, a spokesman for Essity said.

“As announced by SCA in May 2015, the violations pertain to events that took place prior to SCA acquiring 100% of the company in 2012,” he added.

Reporting by Dave Sherwood and Natalia Ramos in Chile & Colm Fulton in Stockholm; Writing by Cassandra Garrison and Dave Sherwood; Editing by Leslie Adler and Louise Heavens