Brazil clamps down on toilet paper price abuse
The Brazilian government responded to consumer outrage Friday by announcing fines for toilet paper and biscuit makers that reduced the size of their packages but not the prices.
BRASILIA, Brazil, Aug 24 (Reuters) - The Brazilian government responded to consumer outrage Friday by announcing fines for toilet paper and biscuit makers that reduced the size of their packages but not the prices.
Justice Minister Jose Gregori said the fines could be as high as 3.2 million reais ($1.3 million), but can be reduced if manufacturers sign a document promising not to harm consumers in the future.
``We cannot do anything about prices, because that does not depend on the government,'' said Gregori. ``But they acted disloyally with consumers.''
The companies have alleged Brazil's weak currency pushed up dollar-denominated prices of raw materials, such as paper pulp or wheat and an energy shortage boosted production costs.
The toilet paper makers, including market leader Klabin Kimberly , cut the length of their rolls by 25 percent from 40 meters (44 yards) to 30 meters (33 yards), but prices remained practically the same. Biscuit makers shrank their packages to 170 grams from 200 grams.
``The biscuit makers did not deny irregularities,'' said Gregori. ``They said they had technical problems, but the explanations were not sufficient to avoid fines.''
Gregori said the products will not be pulled from the supermarket shelves, but the manufacturers will have to inform consumers of the size changes through advertising.
Competition officials said they will investigate whether companies formed cartels to decide on the smaller packaging, especially in the case of toilet paper.
Consumer groups and the media also detected smaller packages for laundry detergent, tomato sauce, sliced bread, diapers, deodorants and shampoo.