January 27, 2017 / 2:16 PM / a year ago

UPDATE 1-Chile's CMPC to pay $150 mln over collusion scheme - govt

(Recasts with payment confirmation from government, adds comments)

By Felipe Iturrieta

SANTIAGO, Jan 27 (Reuters) - Chilean forestry and paper group CMPC will pay around $150 million to consumers as compensation for a collusion scheme to control the country’s toilet paper market, the head of the government’s consumer agency told journalists on Friday.

In October 2015, Chile’s competition regulator said CMPC and a subsidiary of Sweden’s SCA had colluded for at least a decade to control nearly 90 percent of the Chilean tissue and toilet paper market, inflating prices.

CMPC, controlled by Chile’s powerful Matte family, escaped a fine, but lawmakers demanded that it pay compensation to consumers, and it has been in talks with the government and consumer groups over the last 14 months.

They had come to an agreement that the company would pay $150 million in compensation to consumers, the head of government consumer agency SERNAC Ernesto Munoz told journalists on Friday.

The final logistics still need to be worked out, but the plan is for payment to be made via a bank to every Chilean adult resident, Muñoz said.

“We hope that payments will start being made in the first half of this year,” he said, adding that compensation would be “from 7,000 Chilean pesos” ($10.80) per person.

The consumer groups said SCA had not participated in the compensation talks and would face court action.

The two companies generated benefits of as much as $460 million over the years the scheme operated, a study by the competition regulator said in December, although CMPC has said it was unlikely that the benefits would have outweighed its total profits of $192 million.

CMPC could not immediately be reached for comment.

Shares in CMPC were down 0.4 percent at 10:50 a.m. (1350 GMT), slightly underperforming the IPSA share index.

$1 = 650.0000 Chilean pesos Reporting by Felipe Iturrieta, Writing by Rosalba O'Brien; Editing by Bernadette Baum

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