Woolies takes a $9 million hit for cartel behaviour

Photo: Quinn Rooney/Getty Images

The hits keep coming for struggling retailer Woolworths, which today copped a $9 million fine for breaching competition law in a price cartel over laundry detergent.

In April, the Federal Court handed Palmolive one of the biggest fines in Australian corporate history, $18 million, after it pleaded to being part of the cartel with the supermarket giant, Unilever and Cussons.

The Australian Competition and Consumer Commission (ACCC) launched court action in 2013 over actions in the first quarter of 2009.

The ACCC alleged that as part of the deal, the companies agreed to end the supply of standard concentrate laundry detergents and only supply ultra concentrates, selling them for the same price per wash as the equivalent standard concentrated products, but failing to pass on cost savings to consumers.

Today the Federal Court ordered Woolworths Ltd to pay penalties totalling $9 million after admitting its role in the cartel.

ACCC chairman Rod Sims it was the largest fine the ACCC has obtained for a company being an accessory to competition law breaches.

“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,” he said.

Woolworths admitted to being in on the deal between Colgate, Cussons, and Unilever.

Woolworths will also pay $250,000 towards the ACCC’s costs in the proceedings.

Unilever applied for immunity under the ACCC’s immunity policy for cartel conduct and the case against Cussons is set to be heard next week.

Earlier today, Woolworths announced its chief information officer Clive Whincup, was leaving after two years in the role. He leaves in July.

In February, Woolworths posted its first loss in 20 years – $972.7 million for the first half of the financial year, following a $1.9 billion write down on the Masters hardware business.

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