French companies fined

Published: 1-Apr-2006


The Conseil de la Concurrance, France’s anti-trust body, has found the country’s three leading selective perfumery chains and 13 of their suppliers guilty of price fixing between 1997 and 2000 and has fined them a total of €46.2m.

The retailers came in for the highest fines. Marionnaud, since bought by AS Watson, has been fined €12.8m, Sephora (LVMH) must pay €9.4m and Nocibé (Charterhouse) must stump up €6.2m.

In comparison, the brands came off relatively lightly. L’Oréal was hardest hit with a fine of €4.1m, followed by Chanel with a €3m fine. However, when the individual fines for Christian Dior (€2.2m), Guerlain (€1.7m), Givenchy (€550,000) and Kenzo (€600,000) are added to the Sephora fine, LVMH clearly comes off worst overall. The other brands fined were YSL Beauté/Gucci (€1.8m), Estée Lauder (€1.6m), BPI/Shiseido (€810,000), Thierry Mugler/Clarins (€640,000), Hermès (€410,000), Shiseido France (€340,000) and Pacific Création Parfums (€90,000).

French newspaper Le Figaro says that lack of evidence had allowed perfumery chain Douglas and fragrance houses Azzaro and Sisley to slip through the net, while P&G Beauté was not considered by the Council.

The Council says that the companies had formed a cartel, fixing artificially high prices for fragrances and setting up a ‘price police force’ that watched in-store prices and threatened retailers who departed from the script. In four years, says the Council, these practices raised prices by at least 3%, which translates in real terms to €72m.

LVMH and Chanel are appealing the decision, saying that the Council refused to take into consideration the special circumstances of luxury distribution. Nocibé is also making an appeal, stating that there is no proof that it was involved in the practice and that a single price across different retailers is not evidence of collusion.

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