Two companies formed an ‘outrageous’ cartel to control prices of a range of paper products which ‘hurt poor people the most’, says minister

This article is more than 4 years old

This article is more than 4 years old

Two forestry companies colluded for more than a decade to control the prices of toilet paper and other products in Chile, the country’s competitive practices regulator has said.

Luis Felipe Cespedes, the economy minister, said on Thursday that the collusion between the market’s biggest players was outrageous and affected the poorest Chileans the most.

The country’s president Michelle Bachelet called the alleged collusion by companies that control 90% of the toilet paper market “extremely serious”.

The regulator said on Wednesday that an antitrust court accepted its filing accusing the companies of colluding to control prices of toilet paper, napkins, absorbent towels and other products from 2000 to 2011.

“It’s one of the biggest collusion cases ever uncovered in the country,” the agency said in a statement, adding that the companies have combined annual sales of about $400m.

One of the companies, CMPC Tissue, will not be fined because it acknowledged the anticompetitive conduct earlier this year. The regulation agency asked the court to sanction the other company, SCA Chile, but it is expected to receive a reduced fine because it also acknowledged wrongdoing.

CMPC said it had fired the general manager of its tissue division and other company executives involved in the collusion scheme.

“The fact that some of our executives carried out acts that go against free competition is illegal and also deeply affects our way of acting as a company, our corporate policies and our organisational culture,” CMPC said in a statement.

Swedish-owned SCA could not be reached for comment.

The regulator said that a price war for toilet paper broke out between the competing paper giants in 2000. The collusion apparently began with the then-manager of CMPC began meeting with the owner of PISA — a company that was bought in 2012 by SCA — at a golf club in the Chilean capital. In the following years, other executives were involved in the scheme using fake email accounts and prepaid phones.

“This sort of abuse harms people, the economy and the image of our country,” Bachelet said.