A Stain on the Laundry Business

Question: What’s the difference between a multinational company and a drug dealer? Answer – not much.

Recently I came across an article on the News Ltd website:

http://www.news.com.au/finance/business/retail/colgate-hit-with-18-million-fine-in-dirty-detergent-ripoff/news-story/fd00803f9a6b923c1a98dcc1495adcc4

…not in the crime section or plastered across the front pages as it would be if I were a low income earner asking questions about the fairness of recent taxation measures – but in the business section.

This despite the fact that the story involved fines of $18 million dollars, legal fee costs of another 75 grand, and the demoting of a company boss. I suppose it was just an ordinary day in the corporate world.

So what are we on about here? Nothing less than the grubby goings-on of a corporation that manufactures washing powder.

As the opening paragraph states: “A cartel of major detergent suppliers has been busted over an illegal deal to control the price and supply of laundry detergents and fool Australian customers.”

It turns out that back in 2009, multinational company Colgate –Palmolive in cahoots with another multinational Unilever Australia – got out of the laundry concentrate game and into the ultra-concentrate business, or as they might say in crime novels, the washing powder laundering racket.

According to the article, the arrangement enabled the company to reduce the quantity of the product and unload it onto consumers at the price of the original concentrate.

Cheap, but not at half the price! It was certainly cheap behaviour. Colgate was presiding over a racket designed to rake in enough maximum profit to put a smile on the dial of any drug dealer.

Anyway things went from bad to worse for Colgate. Unilever was granted immunity so it could use the technical term “witness protection” when they finally came clean on the deal.

The G-men and women of the Australian Competition and Consumer Commission were onto the scam and it cost Colgate a whopping $18 million. One of the corporation’s leading directors was also banned from any managerial posts for seven years. This was a mere slap on the wrist for the corporate giant with the fine probably covered by the extra dough they made out of the scam.

At least they weren’t able to wash this one away.