Peru may fine Kimberly-Clark for alleged price fixing

AP News
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Posted: Dec 15, 2015 6:55 PM

LIMA, Peru (AP) — Antitrust regulators in Peru are considering fining Kimberly-Clark up to 12 percent of its earnings for allegedly conspiring for almost a decade with a competitor to set prices for toilet paper and other products in the South American country.

In opening a sanctions process Tuesday, regulators said that executives of Kimberly-Clark's local subsidiary, including several former general managers, and their counterparts from Chile's CMPC worked together from 2005 to 2014 to set prices and coordinate promotions. They said the scheme, which was orchestrated in secret meetings at hotels and phone conversations, helped inflate prices by as much as 20 percent.

Kimberly-Clark Peru said in a statement that it was cooperating with authorities but declined to comment further as the investigation was ongoing. No fines or sanctions have yet been levied.

The action follows a similar price-fixing probe launched last year against CMPC in its home market and an effort by authorities in Colombia to dismantle the so-called toilet paper cartel in which another Kimberly-Clark subsidiary faces fines upward of $20 million for each infraction.

Together with CMPC, the American maker of Huggie's diapers and Kleenex tissues controls about 88 percent of Peru's market for paper tissues and personal hygiene disposables, which moves more than $250 million in annual sales, regulator Indecopi said.

The disciplinary action was made possible thanks to information provided by CMPC and could result in fines up to 12 percent of each company's annual earnings in Peru, Indecopi said. Thirteen Kimberly-Clark executives, including former general managers, involved are also subject to heavy fines.

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This story has been corrected to show that sanctions are being considered, but haven't been determined.