01 August 1997

Following complaints from thousands of consumers, New York State attorney-general Dennis Vacco launched an investigation into allegations that Procter & Gamble colluded with other fmcg companies and a retail chain to deprive NY citizens of their inalienable right to enjoy the same savings offered to shoppers elsewhere in the US. Says Mr Vacco: 'Many shoppers, including the elderly, families with young children and those with limited budgets, rely on coupons to save money on their grocery bills.' In February 1996 P&G embarked on a year's trial to eliminate coupons for its brands across the state. The trial was joined by Colgate-Palmolive, Pillsbury, Reckitt & Colman, six other fmcg companies and Wegmans Food Markets; resultant savings were redirected into other forms of promotion. The marketers, however, hadn't reckoned on the intensity of the resulting consumer backlash - and P&G and the others have now agreed $4.2m 'without predjudice' compensation to shoppers in the form of - money-off coupons! Denying collusion, P&G said the settlement had been made 'to avoid protracted litigation'.