COLGATE UPPED FOURTH-QUARTER MARKETING SPENDING

CEO: Unexpected $30 Million Windfall Used for New Products

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CINCINNATI (AdAge.com) -- Colgate-Palmolive Co. said an unexpected savings of about $30 million was used to increase marketing spending in the fourth quarter.

Chairman-CEO Reuben Mark told analysts today during a conference call that the money came from unexpectedly lower tax rates in Italy

Mr. Mark would not specify how much of the windfall was spent on media advertising, but said among projects the funds helped pay for was moving planned launch of Colgate oral-care gum in the U.K. and Canada from early this year to late last year.

While Colgate has faced criticism in the past for cutting fourth-quarter media spending to hit earnings targets, an analyst who did not wish to be identified expressed doubts about whether this move reflects a change of course for the marketer.

Quickly spent
Mr. Mark said the tax windfall was unknown to Colgate during its last call in late October, and, once discovered, was spent on marketing programs by December -- an unusually fast reaction, the analyst noted. New product launches are typically planned with retailers several months in advance.

Mr. Mark said the company typically has a wish list of marketing projects on tap in case unexpected funding becomes available. And he argued that Colgate's marketing spending shouldn't be judged by media numbers alone, pointing to growing use of integrated marketing programs targeted at consumers, some coordinated with retail promotions.

He added that Colgate plans increased marketing support in 2002 that will be larger than the $30 million tax-induced hike last quarter, windfall or no. WPP Group's Y&R Advertising handles Colgate's brands globally.

Flat sales for quarter
Colgate reported fourth-quarter sales were flat at $2.4 billion, though unit volume was up 4%. The company blamed the strength of the dollar for depressing the 75% of Colgate's sales that come from outside the U.S., though unit volume also outstripped sales by 4% to 2% in North America.

Net income rose 7% to $295.3 billion or 49 cents a share after a charge of $15 million, primarily to write off debts from Kmart, which filed for Chapter 11 last month, and the value of Colgate's Argentinian business, due to economic troubles and currency valuations there.

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