The Competition Council has launched an investigation into a possible breach of the competition law by Colgate-Palmolive Romania, following the signing of certain distribution contracts with anti-competition effects, the institution announced on Tuesday.
US giant Colgate-Palmolive is one of the big players on the Romanian consumer goods market, with annual sales of almost 35 million euros and 300 employees. The company sells Colgate toothpaste, Palmolive shampoos and shower gels and Lady Speed Stick deodorants.
The reason behind the investigation is the sealing by Colgate-Palmolive of certain territorial exclusivity contracts with some of its distributors.
"Colgate-Palmolive has required a dispensation of the individual exemption from legal stipulations on the personal care products purchasing and distribution contracts concluded with several firms. The investigation carried by the Competition Council will assess the effects these contracts have over the competition environment on the specific market, having in view the territorial exclusivity agreed between Colgate-Palmolive Romania and its distributors," states the Competition Council.
Colgate-Palmolive representatives had not stated the company's position by the time of going to print.
The Council will also investigate the company's possible abuse of its dominant position when establishing the contractual relationships with its distributors. "In the wake of a complaint regarding one or several forms of dominant position abuse by SC Colgate-Palmolive Romania SRL when establishing contractual relations with its distributors, the object of investigation has been extended to the possible violation by this company of stipulations of article 6 of the law (regarding the dominant position abuse)," the institution also states.
Colgate-Palmolive entered the Romanian market in 1992 and owns a plant in Brasov. The company's products include Axion dishwashing paste and Ajax window cleaning solution. Internationally, the American group is a business worth about 10 billion dollars annually.
The company in 2003 reported sales revolving around 35 million euros, against 33 million euros during the previous year. Net profit last year stood at 4.4 million euros, as compared to 4 million euros in 2002. The company has not reported any figures for the current year.
The Competition Council has stepped up its investigations lately. Competition is one of the most delicate points of negotiation between Romania and the European Union.
georgiana.stavarache@zf.ro
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