Which? probes perfume pricesPrice fixing in France has led to UK investigation

16 March 2006

Which? is investigating concerns over luxury perfume and cosmetic prices in the UK, after 13 of the biggest names in the industry were fined for price-fixing in France.

The French Competition Council fined major brands including Armani, Dior and Clinique a total of nearly GBP 32 million for colluding with distributors to fix the retail price of perfumes and cosmetics. Three French store chains were also fined.

The Competition Council said that between 1997 and 2000 - the period covered by its investigation - the companies colluded to stamp out competition and maintain high prices. This included using 'price police' who leaned on distributors and issued threats to those who tried to discount prices. Several of the brand owners have said they are considering an appeal against the Competition Council's decision.

UK perfume prices

But the action prompted concerns about UK prices for up-market perfume and cosmetics, and Which? competition experts are investigating them. If Which? finds evidence of price-fixing, we will report it to the UK competition watchdog, the Office of Fair Trading (OFT). The OFT has the power to issue hefty fines for anti-competitive behaviour.

Which? Principal Economist Alena Kozakova said: 'It is likely that the UK market would be structured in a similar way to the French one. That's why we feel this is definitely worth investigating. We want to check that the market is working for consumers and that people can shop around for discounts.'

In the UK, there are shops, such as The Perfume Shop, which offer discounts on certain luxury-brand perfumes. But Which? will be checking more widely for discounts.

OFT reviews markets

Debbie Hunter, of the Cosmetic, Toiletry and Perfumery Association, which represents manufacturers, said:'The UK market is very competitive and is tightly reviewed by the OFT. There is wide consumer choice, and people can choose the type of ambience they want - it varies from concessions in department stores right down to picking the item off the shelf in a discount shop.'

A spokeswoman for the OFT said that the watchdog hadn't received any complaints about price-fixing in the UK perfume and cosmetics market, and had never launched an investigation. However, she added that all markets were regularly reviewed with 'spot investigations', and this industry was subject to such checks.

Which? would like to hear from any retailer who feels pressured into not offering discounts on luxury perfume or cosmetics. Email insidestory@which.co.uk in confidence.