Fishy-smelling perfume price fixing punished

14th March 2006, Comments 0 comments

PARIS, March 14, 2006 (AFP) - The French competition watchdog said on Tuesday that it had fined leading luxury goods and perfume companies a total of EUR 46.2 million for arranging to dress up their prices.

PARIS, March 14, 2006 (AFP) - The French competition watchdog said on Tuesday that it had fined leading luxury goods and perfume companies a total of EUR 46.2 million for arranging to dress up their prices.

The competition authorities said that the companies involved had reached illicit agreements on price fixing, enforced by procedures to monitor prices in the outlets concerned and backed up by commercial threats for non-compliance.

The perfume retail chain Marionnaud was hit with the biggest fine of EUR 12.8 million. Sephora, which is part of the luxury products giant LVMH, was fined EUR 9.4 million.

Another chain, Nocibe was fined EUR 6.2 million.

The French cosmetics giant L'Oreal was fined EUR 4.1 million.

LVMH, which was hit by fines against other brands that it owns, said it would appeal against the penalties. It said the authorities had "refused to take into account the requirements and specificities of distribution in the luxury products sector".

The other LVMH brands affected were Parfums Christian Dior, Guerlain, Parfums Givenchy, and Kenzo Parfums.

The authority said: "Between 1997 and 2000 these companies managing luxury perfume and cosmetic brands had arrangements with distributors in their network, and particularly the national chains Marionnaud, Nocibe and Sephora, to put an end, for each product under the brand name, to any competition between retail outlets for these products.

"Each agreement organised by the supplier was accompanied by the setting up of a 'price police', involving checks on the prices being applied, pressure and threats of commercial reprisals for those distributors that refused to apply the prices imposed by the brand."

The other fines imposed by the French anti-trust body were as follows:

Brand                                      Fine in euros
  
Marionnaud                                     12.8 million
Sephora                                          9.4 million
Nocibe                                            6.2 million
L'Oreal                                           4.1 million
Chanel                                           3 million
Parfums Christian Dior                      2.2 million
Yves Saint-Laurent Parfums               1.8 million
Guerlain                                          1.7 million
ELCO/Clinique et Estee Lauder            1.6 million
Prestige International/Jean-Paul Gaultier
                           and Issey Miyake    810,000
Thierry Mugler Parfums                       640,000
Kenzo Parfums                                  600,000
Parfums Givenchy                              550,000
Comptoir nouveau de la parfumerie/Hermes      410,000
Shiseido France                                 340,000
Pacific Creation Parfums/Lolita Lempicka 90,000

Copyright AFP

Subject: French news

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