A Federal Court has ordered Woolworths to pay $9 million in penalties after the supermarket giant admitted to conspiring to artificially push up the price of laundry detergent.
An anti-competition agreement in 2009 between Colgate, Cussons, Unilever and Woolworths saw the three parties stop supplying the supermarket giant with concentrated laundry detergent, and only supply ultra-concentrates.
The parties were then found to have sold ultra-concentrates for the same price as normally-cheaper standard concentrates, without passing savings onto consumers.
On top of the $9 million dollar fine, Woolworths has also been forced to pay $250,000 to the Australian Competition and Consumer Commission to cover its legal fees and has agreed to update its trade practices.
Colgate was fined $18 million by the Federal Court in April for its role in the matter, and Cussons will go before the court on June 7.
Justice Jayne Jagot said in court today the penalty “reflects the objective seriousness of the contraventions”.
Woolworths said in a statement 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,” the supermarket said.
“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.”
The $9 million dollar fine is the largest handed down to an accessory to anti-competitive practices.
ACCC chairman Rod Sims said in a statement it was important the court took a strong stance on the matter.
“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,” Sims said.
“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.”
