Unilever, P&G face EU cartel fines: Source

Consumer goods giants Unilever and Procter & Gamble are set to be fined by EU regulators this week for fixing washing-powder prices, a source with knowledge of the matter said on Monday.

Germany's Henkel, which alerted the European Commission to the cartel in washing powder, will not be penalised, the source said.

"The Commission is expected to announce its decision on Wednesday," the source said.

As part of the settlement procedure, the EU watchdog will cut the fines by 10% in return for the firms' admissions that they participated in the cartel, which the Commission had dubbed "Purity" in its investigation, the source added.

EU Commission spokeswoman Amelia Torres declined to comment.

P&G, which owns Tide washing powder, said it and rivals have been subjected to antitrust inquiries in Europe, an issue which it has routinely reported every quarter for the last three years.

"As the European Commission case is ongoing, we will not comment on speculation regarding this legal matter," Paul Fox, its director of corporate communications, said.

Henkel declined to comment. P&G shares were trading 0.8% higher at USD 62.40 by 1819 GMT while Henkel trimmed losses to end 0.5% down at 44.15 euros. Unilever, which owns the Omo and Surf brands, closed 0.13% down at 22.23 euros.

The Commission can fine companies up to 10% of annual turnover for breaching EU rules. This will be the fourth EU decision using the settlement procedure after cases in the chipmaking, air cargo and animal feed sectors last year.

Anglo-Dutch consumer goods giant Unilever is a dominant force in detergents while P&G is the world's No 1 in the market. Henkel sells Persil.

The EU watchdog raided the three companies in June 2008 on suspicion of price fixing, and also sought information from US-based household products firm Sara Lee.

The Commission has imposed close to 12 billion euros on cartels in the five years to 2010.