Showing posts with label condemned fragrance companies for fixing high prices. Show all posts
Showing posts with label condemned fragrance companies for fixing high prices. Show all posts

Sunday, January 29, 2012

Big Fragrance Companies Condemned for Fixing High Prices: Perfume Cartel Bust

Thirteen leading fragrance companies have been sentenced to a total of more than 40 million in fines by the Court of Appeal of Paris for price fixing leading up to an oligopoly/collusion.
The Court upheld a decision by the Competition Authority ruled in 2006 against thirteen major names in luxury and three distribution companies of perfumes and cosmetics, for fixing a retail price of products to standardize prices up , as the Court viewed by AFP.

The condemned perfume brands are: Chanel, Beauté Prestige International (Jean Paul Gaultier and Issey Miyake fragrances), Clarins Fragance Group (including Thierry Mugler perfumes), Hermès Parfums, Parfums Christian Dior, Elco (Clinique and Estee Lauder), Guerlain, L'Oreal, LVMH Fragance Brands, Sisheido Europe, and YSL Beauté. The condemned distributors are retail sales giants: Marionnaud, Sephora and Nocibé.

What was this all about?

The luxury groups in question locked a "street price" of products and the discount rate than they were allowed to practice with their distributors in order to level up prices to the detriment of the consumer, as the Competition Council established in its first decision in 2006.
They also accused the suppliers of establishing a "price police", in other words, price controls, pressures and threats of trade retaliation vis-à-vis the recalcitrant distributors.

The history of shame
The story isn't entirely new. An alleged cartel between 1997 and 2000 was what prompted a particularly long legal battle, as this is the third time the issue is examined by the Court of Appeal, the two previous decisions being challenged before the Court of Cassation. In both cases, the senior judges had asked for a retrial on appeal. You can see the newspaper clipping depicted from 2006 (click photo to enlarge)

Interestingly, the amount of the total fine now was reduced from 46.2 million euros to 40.20 euros.

photo clipping and article in full linked here

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