Chile eyes harsher penalties after toilet paper collusion scandal
SANTIAGO Nov 2 (Reuters) - Chilean government officials held an emergency meeting on Monday to discuss a crackdown on anti-competitive practices after regulators identified collusion in the market for toilet paper, tissues and other paper products.
Chile's competition regulator said last week that Chilean forestry company CMPC had colluded with PISA, purchased by Swedish-owned SCA in 2012, for at least a decade to control nearly 90 percent of the nation's toilet paper and tissue sales and kept prices higher.
SCA was slapped with a $15.5 million fine, while CMPC escaped punishment because it admitted wrongdoing in March.
But on Monday the government demanded the companies agree on a compensation plan for consumers, while ministers met to draft reforms that would include jail time and higher fines for collusion.
Chile's Chamber of Deputies will have 15 days to approve the measures.
The revelations, which have dominated headlines in Chile in recent days, come at a complicated time for President Michelle Bachelet's government. It is struggling from the fallout of a series of scandals that have left Chileans disillusioned with the business and political classes.
Since the toilet paper scandal broke last Wednesday, CMPC shares have fallen around 10 percent on the Santiago stock exchange. Stockholm-listed SCA has been unaffected.
Combined sales for SCA and PISA totaled $400 million annually last year.
CMPC, one of the biggest companies in Chile, participates in the forestry and pulp wood business in Chile, Argentina, Brazil, Colombia, Mexico, Peru, and Uruguay. (Reporting by Gram Slattery; Editing by Jeffrey Benkoe)
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