Colgate ordered to pay $18 million in court proceedings over cartel conduct

The Federal Court has ordered Colgate-Palmolive to pay $18 million in penalties for engaging in cartel conduct over the supply and price of laundry detergent.

The multimillion-dollar penalty was handed down after Colgate admitted to entering into understandings with competitors to cease the supply of standard concentrate laundry detergents in 2009 and only supply “ultra concentrates”.

The Australian Competition and Consumer Commission, which initiated the legal action, also acted against Colgate because it believed the concentrated laundry detergent should not have been sold at the same price as the standard product.

Australian Competition and Consumer Commission chair Rod Sims said in a statement the whopping $18 million penalty – which was determined based on Colgate’s turnover – sends a strong message to big businesses doing the wrong thing.

“By ordering these substantial penalties, the court has recognised the seriousness of this conduct, which affected the supply and pricing of laundry detergents,” Sims said.

“This is the equal third largest penalty that the court has ordered for breaches of the competition provisions of the [Competition and Consumer] Act and is an indicator of how seriously the court views the conduct.”

The Federal Court also ordered Colgate to update its compliance processes and pay $450,000 of the competition watchdog’s legal costs.

The ACCC is also taking action against PZ Cussons Australia and Woolworths in relation to the same matter, with a court hearing scheduled for June.

A spokesperson for Colgate told SmartCompany the company has paid an $18 million penalty after making admissions to two of the four allegations brought forward by the ACCC.

“Contrary to some media reports, there were no findings against Colgate relating to the pricing of its laundry detergents or failing to pass on cost savings to consumers,” the Colgate spokesperson said.

“The company regrets that actions that were not consistent with company policy and training occurred in 2008. The company’s policy is always to fully comply with competition law, and it cooperated with the authorities during this investigation.”

*This story was updated at 10.15am on Friday April 29 to include a response from Colgate

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