Chilean Toilet Paper Companies Collude via “Cartel of Comfort”

Chile’s public prosecutor revealed that two of Chile’s largest producers of paper hygiene products, CMPC Tissue and SCA Chile, were partners in a scheme to fix the prices of toilet paper, feminine products, and tissue from 2001 to 2011. Chile’s public prosecutor revealed that two of Chile’s largest producers of paper hygiene products, CMPC Tissue and SCA Chile, were partners in a scheme to fix the prices of toilet paper, feminine products, and tissue from 2001 to 2011.

The so-called “Cartel of Comfort,” which included the popular CMPC brand, Confort, accumulated more than 23 million dollars in extra profits and augmented combined company profits to around 400 million dollars over ten years. The investigation into these irregularities, which were first uncovered in December of last year, continues to make national headlines.

Collectively CMPC and SCA control 90 percent of Chile's market for such paper products. This enabled them to take advantage of Chile's neoliberal economic policies permitting companies to act without much regulation. Similar schemes were also previously discovered in the country’s pharmaceutical and poultry industries.

In early 2015, CMPC Tissue denounced itself through the process of auto-denunciation, and SCA followed suit. This legal move enabled both companies to admit to collusion and possibly pay a fine instead of having their executives tried and imprisoned. Since CMPC Tissue was the first to denounce itself, it did not receive a fine, but SCA Chile was asked to pay a fine of 15.5 million dollars in its subsequent denunciation.

As of now, toiletry prices have fallen 13 percent due to public knowledge of the denunciation, and the price fall also signals a marked lack of demand for CMPC Tissue and SCA Chile products.  This opening of the market can provide a boost in the competitiveness of alternative toiletry retailers.