Perfume giants fined 40 mn euros for price fixing

PARIS - A French court has fined perfume giants including Chanel, Christian Dior and L'Oreal a total of 40 million euros ($53 million) for colluding to keep prices high.

Four bottles of Chanel No. 5 perfume are displayed at the Metropolitan Museum of Art in New York (AFP/File, Stan Honda)

A Paris appeals court upheld the fine imposed in 2006 by the French competition watchdog, which said the companies involved had reached illicit agreements on price fixing, enforced by procedures to monitor prices in outlets and backed up by commercial threats for non-compliance.

Thirteen leading perfume and luxury goods companies were fined: Jean-Paul Gaultier, Issey Miyake, Chanel, Clarins Fragrance Group, Hermes, Christian Dior, Clinique, Estee Lauder, Guerlain, l'Oreal, LVMH Fragrance Brands, Sisheido Europe and YSL.

Distributors Marionnaud, Sephora and Nocibe were also fined.

In its original ruling, which concerned events between 1997 and 2000, the price watchdog said said the companies "had arrangements with distributors... to put an end, for each product under the brand name, to any competition between retail outlets for these products".

The agreements saw "price police" ensuring distributors were sticking by the deal, and "pressure and threats of commercial reprisals for those distributors that refused to apply the prices imposed by the brand", it said.