Sunday, April 09, 2006

Sweet smell of price-fixing The French Competition Council found that 3 major perfume and cosmetics retailers conspired, with 12 manufacturers to fix prices. The perfume manufacturers had agreed with the retailers that all would sell perfumes at a similar price. The fine levied was around 46 million euros ($51 million). The conspiracy took place between 1997 and 2000. Collusion was investigated in France only, but these companies have branches throughout Europe, so it is assumed the same practices took place in other countries. According to an AP story ("French watchdog fines perfume makers", 3/14/06): Under the arrangements, a "price police" was set up to artificially inflate prices, pressure individual vendors and threaten reprisals against those that refused to apply the prices set by the perfume and cosmetic brands, the council said…Verbal threats of delivery delays were sometimes used. The big three French retailers of luxury perfume are Marionnaud Parfumeries, Séphora, and Nocibé. Marionnaud, Europe's #2 perfume retailer, was sold recently to AS Watson, a division of Hong Kong conglomerate Hutchison Whampoa. Séphora (#3) is owned by luxury brands retailer LMVH (Louis Vuitton Moet Hennessy, which also owns the perfume brands Christian Dior, Givenchy, and Guerlain. Nocibé is privately owned (it acquired French cosmetics chain Euro Santé Beauté in 2005.) (The actual leader in Europe is German firm Douglas, which bought a bigger presence in France in 2005 buy buying French perfume-maker SA Lavigne. It was not named in the suit, possibly because it was not a serious factor in France in the time investigated.) All of these companies are expanding aggressively in Eastern and Southern Europe. The perfume makers whose prices were fixed include Chanel, Yves Saint Laurent, LMVH, L'Oréal and PPN.   2:09:27 PM

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