Gillette under investigation?

[Alfredo Becerra]

I recently read an article on Wikipedia and it states Gillette (P&G) is under investigation by the office of fair trade (or something along those lines) The article claims they are under investigation due to the ridiculuous mark ups (4,750%) and their unsubstatiated claims.

I know the mark up thing is true and most of their claims BS. My question is: does anyone know anything about this?

I ran a search online trying to find a more reputable source and didn't find much.

 

[Go West Young Man]

Urban myth from a long time ago.

 

[seabs]

"The price of shaving products at leading supermarkets is under investigation by the Office of Fair Trading.

The Government watchdog is involved in a long-running inquiry into alleged collusion between manufacturers and retailers.

It is alleged that salesmen from Procter & Gamble, which bought Gillette for $57bn (£35bn) in 2005, urged retailers not to cut the shop price of its brands."



Read more: http://www.thisismoney.co.uk/bargai..._article_id=487419&in_page_id=5#ixzz0wn84AoaT

That article is over a year old though.

 

[Greybeard]

Gillette has been fined many times for using unsubstantiated claims and inaccuracies in their advertising. Then again, so have many other companies.

 

[AlanL]

A quick Google search turns up a lot of hits saying basically the same thing. The UK Office of Fair Trading is looking into complaints of unfair markup.

It's not likely to go anywhere, because there are plenty of alternatives available (as we all know here at B&B!), so there is no monopoly involved. As for price fixing (requiring retailers to sell at a named price, and not allowing discount), the last international scandal of that nature was committed by Nintendo back in 2002, for which they paid a €149 million fine; which was probably chump change and didn't make much difference to improve their practices.

What I find sad in all this, is why a company who made its best efforts to corner the shaving market with a quality, affordable product (the Fat Boy model 195 is so named because it cost only $1.95) could end up screwing their own customers instead of trying to win them through fair treatment. I guess that's the way now, from banks to bathsoap.

 

[oversaturn]

Some time ago, the following article showed up on Daily Mail:

Sharp practice? The razor heads that cost just 5p to make, but sell for £2.43 each

Men are paying over the odds for a clean shave because of a huge mark-up on razor heads.

The products sold by Gillette and other companies cost as little as 5p to make, industry insiders have revealed.

But consumers are charged up to £2.43 a piece - a mark-up of more than 4,750 per cent.

The price of shaving products at leading supermarkets is under investigation by the Office of Fair Trading.

The Government watchdog is involved in a long-running inquiry into alleged collusion between manufacturers and retailers.

It is alleged that salesmen from Procter & Gamble, which bought Gillette for $57billion (£35billion) in 2005, urged retailers not to cut the shop price of its brands.

A check of Tesco, Asda and Sainsbury's found the UK's three biggest supermarkets are selling Gillette's Fusion Power cartridges at the same price.

A pack of eight costs £18.53, and the replacement razor heads are so expensive that they are now the most shoplifted product in the High Street.

Special security measures have been introduced, including sealing the packs in boxes with an electronic tag which sets off an alarm if it is not removed before leaving the store, and CCTV that activates if the product is removed from the shelf.

A pack of four Fusion Power cartridges costs only 20p to manufacture, plus 8p for packaging. But they are sold for £9.72 - £9.44.

An industry insider said Gillette takes the lion share - £6.28 - to cover its operating costs and make a profit. Some £1.90 goes to the retailer and £1.26 to the Government in VAT.

The insider said: 'I know as a matter of fact that it will not cost more than 5p to produce a refill cartridge, it is a question of pennies given the bulk involved, yet Gillette is charging a wholesale price which is much higher.

'The figures tell you why it can afford to use stars such as Tiger Woods on its payroll (for advertising) and how it could afford to give David Beckham a diamond-encrusted mach3 razor for Father's Day some years back costing $54,000.

'With the Gillette products, the company is so dominant that it is able to spell out the terms of sale, including the price they want to see, to retailers.'

As well as Beckham and Woods, Gillette has splashed out large amounts of money on tennis star Roger Federer and footballer Thierry Henry to help market its products.

A recent Which? survey praised Gillette's products but gave a 'Best Buy' rating to the King of Shaves Azor. Its four cartridge refill pack comes in at a much cheaper £4.88.

Tesco's Matrix system, which has a triple blade head, has also won plaudits. A four cartridge refill costs only £2.20. A spokesman for Procter & Gamble said the retailers, rather than manufacturers, set the price paid by customers.

She said: 'Delivering value to our consumers is critical to our business. 'P&G determines the (wholesale) prices at which we sell to customers primarily based on covering our costs - the cost of product development, raw materials, processing, packaging, transport, general-expenses and marketing.'

She said that the company also needed to earn 'a sufficient return to sustain our business' and argued that its products provide good value in terms of performance in relation to price.

She said the company was unable to comment on the OFT investigation, but added: 'Our policy is to comply with the letter and spirit of the law everywhere we do business'.

Full text: http://www.dailymail.co.uk/news/art...r-heads-cost-just-5p-make-sell-2-43-each.html

 

[Omaha-BeenGlockin]

With the cut the gov't is getting with that VAT---doubtfull a suit will go anywhere.

They are free to charge what they want---you are also free not to pay it.

 

[lstorie1971]

Walked down the shaving aisle yesterday and saw the history of cartridges displayed before my eyes. The prices went up, up, up the further I went down the aisle. $13.00+ for a 10 pack of Trac II up to over $30.00 for an equivalent amount of Fusions.

I believe that they have reached a point where the market will do far more than the gov't to rein in prices. There is a price beyond which most people will not be able to afford no matter how good the shave, and I believe that point has been reached.

I could just be a Pollyanna though.

 

[xjrob85]

So hypothetically, if some sort of court ruling was to determine that Gillette can no longer charge such exorbitant prices for razors, and a more reasonable price is set, would any of you switch back to cartridge razors?
I might give them another try, or keep some on hand for when I need to take one in my carry-on luggage, but I don't think it would ever take over my routine again.

 

[americanarmsdealer]

They are free to charge what they want---you are also free not to pay it.

+1000! And I for one will NOT pay it!

 

[Uncle Erik]

I'd rather see the invisible hand smack down Gillette than government intervention.

 

[americanarmsdealer]

So, are you trying to say the government can't fix everything?

 

[Bullwinkle]

prior to receiving my DE about a month ago I was using Schrick Slim Twins. Our local grogery was running packs of 12 +3 extra for $5.39 and on the package was an instant $1 off coupons. So I was getting 15 razors for about $4.50. I bought all the had and hit a couple of other stores. I'm set for a long time. I like to use them for travel and for close cleanup work around my goatee and ears. So I got 15 of those for about the same price as 1 fusion cart.

 

[mskembo]

So, are you trying to say the government can't fix everything?

ROTFLMAO! Thanks for that... my Monday needed a pick me up.

MIke