Dirty business
Dirty business
August 18, 2014
BOGOTA —How dirty can business get? In Colombia, it can get as dirty as a diaper. An investigation by the country's Superintendence of Industry and Commerce (SIC) has uncovered a series of illegal, coordinated price hikes in the highly lucrative diaper industry.
Trade and industry inspectors started investigating price-fixing practices in late 2013, with the aim of ridding Colombia's economy of illegal business activity. They looked into product industries as diverse as rice, sugar and cement.
Thanks to the Benefits Program for Collaboration, a project that follows the U.S. practice of protecting whistleblowers, investigators found a "diaper cartel." This group of domestic and international companies is suspected to have "artificially" raised prices from 2000 to 2013.
Colombia's Trade Ministry has announced that it would file charges against a total of five companies and 44 individuals — including directors and employees — for the unfair practices. Evidence began emerging in November 2013, when two accomplices gave inspectors ample proof of the formation of the cartel.
Diapers are big business in Colombia. With two million babies using disposable diapers there, consumers buy a billion of them every year.
The discovery is the government's first major blow to illegal price-fixing practices since the investigation started nine months ago.
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