P&G suit spawns countersuit

Last September, Cincinnati-based Procter & Gamble took the unusual step of advertising in newspapers across the country to warn consumers away from counterfeit long-neck bottles of its flagship Head & Shoulders shampoo because the firm alleged the containers held fake product.

Now the case has taken on a unique twist. A countersuit recently filed against P&G charges that it was none other than P&G's own Hamilton, Ontario, Canada, plant that "was the source of a large portion, if not all, of the alleged counterfeit Head & Shoulders product." Ronkonkoma, NY-based Quality King, one of the distributors sued by P&G to halt distribution of the counterfeit product, filed the countersuit in February for $50 million. What's going on? Quality King alleges that since 1992, P&G's Hamilton plant tried to cut costs by giving scrap product away to a local company for disposal instead of paying to have it landfilled, as it had done previously. P&G doesn't deny this, though it maintains that giving away scrap product "is a common industry practice" and that "the waste shampoo product in question was perfectly fit for use as a general industrial cleaner or in asphalt manufacturing," according to a statement from the company. It further states that its contract with the disposal company "excluded any use for humans and animals." Now that light has been shed on the product's origin, there's still no word on how it came to be falsely packaged. Efforts continue on both sides to track down what happened once the scrap product left the Hamilton facility.

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