Millions of Australians paid substantially more for some favourite detergents under a cartel among its three biggest players, the competition watchdog has alleged.
In action started in the Federal Court yesterday, the Australian Competition and Consumer Commission alleged Colgate-Palmolive, Cussons and Unilever struck a deal in 2008 over the introduction of ultra-concentrated detergent in a bid to boost their bottom lines by almost $150 million.
Through their various brands, the three companies control almost 85 per cent of Australia's $500 million a year detergent market. Brands include Fab, Cold Power, Dynamo and Radiant.
Over a series of meetings, representatives of the companies, plus on occasions Woolworths staff, agreed on how to introduce ultra concentrates, including the timing of the product's release, the phase-out of super concentrates and box size.
The ACCC claimed the meetings were aimed at protecting the profit margins of the companies involved while ultimately leaving Australian consumers worse off.
ACCC chairman Rod Sims said ultra-concentrated detergents were cheaper to produce, store and transport. By co-ordinating the product's introduction, the companies had denied customers savings.
"When similar products were launched in New Zealand, there was significant discounting," he said.
Under cartel laws, the companies and individuals involved face multimillion-dollar fines if found guilty.
Unilever, maker of products including Omo, Surf and Drive, asked the ACCC for immunity under the watchdog's cartel conduct guidelines.
It said only a small number of staff were responsible, adding it had implemented integrity measures across the company since the issue had come to light.
Woolworths said it would fight the claim, saying it was not a party to any cartel and had serious concerns about the way the ACCC had engaged with the company.