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Friday, 31 August, 2001, 15:06 GMT 16:06 UK
Shampoo giant caught spying
Pantene bottle next to skip
Procter & Gamble, the global leader in the hair care business, has admitted to spying on its closest rival, Unilever.

In its efforts to find the secrets of beautiful hair, P&G - maker of Vidal Sassoon and Pantene shampoo - is alleged to have searched through the rubbish of Unilever, which owns the Organics and Sunsilk brands of shampoo.

The two giants are fierce rivals in the consumer product sector and are thought to be taking the matter very seriously.

Press reports say that Unilever is demanding a settlement - potentially running to tens of millions of pounds.

And if a compensation fee is not agreed by the end of Friday, Unilever will take P&G to court.

Bad hair day?

P&G chairman John Pepper is understood to have flown to Europe on Tuesday for a meeting with Niall Fitzgerald, Unilever's co-chairman.

Head and Shoulders
P&G won fame for its dandruff-busting product

Mr Pepper is thought to have come forward voluntarily and admitted to corporate espionage when things at the P&G intelligence unit got out of hand.

"We can confirm that discussions are continuing with P&G regarding their corporate intelligence operation aimed at Unilever in the US," said a Unilever spokesman.

And P&G said in a statement that it had been working with Unilever to resolve an incident through which it had gained access to some Unilever information.

Unilever makes many household favourites such as Magnum Ice Cream, Dove soap and Lipton tea while P&G boasts the Pringles crisps, Ariel detergent and Tampax brands.

Monitoring rubbish

A report on Fortune Magazine's website alleged that P&G hired private detectives to scour Unilever's rubbish in order to learn their secrets.

Clairol shampoo advert
P&G bought the Clairol brand for $5bn

It is also alleged that P&G hired people to pose as market analysts and glean sensitive information.

A source familiar with the negotiations said that P&G allegedly used a "web of contractors and agents" to obtain marketing information from a Unilever hair-care office.

And industry sources say Unilever now wants to ensure that P&G does not use the information to launch products or advertisements ahead of Unilever.

Corporate spies

Corporate spying - ranging from bugging phone lines, computer hacking and rifling through papers in recycling bins - is widespread according to the American researchers, The Futures Group.

Organics shampoo
The Organic secret that P&G wants to discover?

The group's research suggests that 60% of companies have an organised system for collecting information on rivals.

And 82% of companies with a revenue in excess of $10bn make systematic use of such a system, according to the research.

"All companies have corporate intelligence units. But there is a difference between overhearing a conversation in an airport and actually stealing something from a garbage can," said Leonard Fuld, president and founder of an American competitive intelligence firm.

See also:

03 May 01 | Business
Lucent scientists charged
21 Jun 00 | Health
Shampoo lights up lice
23 Mar 00 | Scotland
Man jailed over shampoo attack
21 Aug 01 | Business
Unilever chief's anti-bribes line
21 May 01 | Business
P&G storms hair sector with $5bn buy
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