Woolworths admits involvement in laundry powder scam

Woolworths has been ordered to pay penalties totalling $9 million after admitting its involvement in a laundry detergent cartel.

The Federal Court has ordered Woolworths to pay the penalties for contraventions of the Trade Practices Act 1974 (now called the Competition and Consumer Act 2010). It comes five weeks after Colgate-Palmolive was fined a total of $18 million for its part in the scandal.

In proceedings brought by the Australian Competition and Consumer Commission (ACCC), Woolworths admitted to being knowingly concerned in the making of, and giving effect to, an understanding between Colgate, PZ Cussons and Unilever that they would each cease supplying standard concentrate laundry detergents to Woolworths in early 2009 and supply only ultra concentrates from that time.

“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.

“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.”

A statement from Woolworths said: “Woolworths 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.

“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.”

In December 2013, the ACCC commenced proceedings in the Federal Court against Colgate, Cussons, Woolworths and Mr Paul Ansell, a former Colgate sales director.

Unilever applied for immunity under the ACCC’s Immunity Policy for Cartel Conduct and consented to be named as the immunity applicant in this matter.

In April this year, the Federal Court ordered that Colgate pay penalties of $18 million for admitted contraventions of the Act, which included $12 million in penalties for making and giving effect to an understanding to limit the supply of laundry detergents.

Colgate was also ordered to pay penalties of $6 million for making and giving effect to an understanding to share sensitive market information, including information about when they would increase their prices.

Mr Ansell admitted to being knowingly concerned in this conduct and by consent was disqualified from managing corporations for seven years.

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