Chile: FNE re-launches investigation against Unilever

Chile’s National Economic Prosecutor’s Office (FNE), in an unusual move for regulatory agencies, opened a second formal investigation against the management of Unilever, which had already been previously investigated, and ultimately reached a settlement.

The decision to open a new process was made several months ago. Unilever has already been denounced by the prosecution before the Tribunal for the Defense of Free Competition (TDLC) in 2013 for abuse of a dominance and abusive practices in the detergent market. On that occasion, Unilever committed to ending its anti-competitive practices in the wholesale channels and in supermarkets, in addition to distributing around US$5 million among all the complainants.

The new investigation was again detonated by a complaint from its competitor under the Popeye Brand of detergents, accusing the company of engaging in new monopolistic practices and returning to abusing its dominant position.

“If, for example, a detergent sells for $80 for the wholesaler’s customers, Unilever sells them to the chain for $100. Unilever set the price at $80 for the people. Then – so that the wholesaler does not lose out-, the company later pays the $20 plus $5 that is the margin. Many times that involves a verbal agreement and finally Unilever does not always respect it, but with this it ensures it can hoard the space in warehouses and to sell below costs “, said a senior executive of the wholesale sector.