Bad Hair Day For Spies
Sun Herald
Sunday September 2, 2001
The American company Procter & Gamble has admitted it waged an espionage war to get shampoo secrets from its principal rival, the Anglo-Dutch firm Unilever.
Three people have been dismissed from Procter & Gamble, which manufactures everything from children's snacks to soap, after its chairman discovered they had employed private detectives.
Among other practices, the ``spies" allegedly rifled Unilever's rubbish to obtain information on haircare trends.
The companies' lawyers were trying to reach a settlement on Friday after reports that Unilever was demanding compensation running into tens of millions of dollars.
Unilever owns the Organics and Salon Selectives shampoo brands.
Procter & Gamble manufactures Head & Shoulders, Pantene and Vidal Sassoon products.
It also recently agreed to buy Clairol's haircare business, which includes the Herbal Essences range.
A Procter & Gamble spokeswoman said the operation ``violated our competitive business information gathering policy" but denied the company had broken the law.
She said materials obtained from Unilever had not been used.
``We voluntarily brought this matter to Unilever and quarantined the information," she said. ``This is very unfortunate and we regret that it has happened."
A Unilever spokesman confirmed that the companies were trying to negotiate a settlement.
``We are determined that confidential information be secured," he said.
He would not reveal the nature of the information obtained or to which products it referred.
It is believed that a settlement may include the transfer of employees from Procter & Gamble to Unilever. Procter & Gamble chairman John Pepper called Unilever chairman Niall Fitzgerald to try to sort outthe matter.
The Procter & Gamble spokesman declined to comment on rumours that the company's employees had hired a corporate spying organisation.
The company, based in Alabama, was founded and is staffed by former United States government intelligence officers, one of whom served in a covert Vietnam operation.
She also refused to confirm reports that the company spies had operated out of a safe house in Cincinnati known as The Ranch, and that corporate spies misrepresented themselves to Unilever by posing as market analysts.
Negotiations to settle the dispute have been continuing since April. Sources say Friday had been set as a deadline but no further information was available by the end of the day.
Unilever could take Procter & Gamble to court if a settlement is not reached.
It is not the first time that a consumer products business has been accused of spying on its rivals.
Kraft Foods recently sued grocery pizza rival Schwan's over allegations that it improperly obtained confidential documents on new product launches and strategies.
© 2001 Sun Herald