The action
Maurice Blackburn Pty Limited, on instructions from Jarra Creek
Central Packing Shed Pty Ltd, is conducting a class action against
Amcor Limited and Visy Board Pty Ltd on behalf of purchasers of
corrugated fibreboard packaging ('CFP') seeking damages and other
relief for losses suffered as a result of cartel conduct by Amcor
and Visy.
The class action, filed in April 2006, alleges that between January
and April 2000, Amcor and Visy, through a number of their most
senior executives, entered into a 'primary cartel arrangement' to
fix CFP prices and to reduce competition for each other's
customers. This primary cartel arrangement was further
implemented through a series of secondary agreements, including
annual agreements to increase the prices of CFP for non-contract
customers each year from 2000 to 2003.
The class action includes all persons and companies who purchased
and paid more than $100,000 (including GST) for CFP between 1
May 2000 and 1 May 2005, regardless of whether a particular person
acquired CFP from Amcor or Visy or any other company.
Visy admits cartel conduct and is fined $36
million
On 21 December 2005 the Australian Competition and Consumer
Commission ('ACCC') commenced legal proceedings against three Visy
companies and three senior Visy executives for alleged cartel
conduct in the CFP industry. The ACCC granted Amcor and its
former senior executives immunity from prosecution for blowing the
whistle on the cartel and cooperating with the ACCC's extensive
investigation.
The ACCC's case against Visy was settled in late 2007, with Visy
admitting to 69 contraventions of the Trade Practices Act
, substantially based on the anti-competitive behaviour that both
Jarra Creek and the ACCC have alleged occurred between 2000 and
2004. Up until it made the admissions, Visy had vigorously defended
itself in the ACCC proceeding, principally on the basis that Visy
alleged that any communications between it and Amcor were
'commercial tactics' aimed at obtaining 'market intelligence' from
Amcor and the arrangements 'camouflaged' this. The Federal
Court commented that this defence was without merit or any
prospects of success.
On 2 November 2007, the Federal Court accepted a plea deal
between the ACCC and Visy and fined Visy Board and its owner,
Richard Pratt, $36 million. Visy Board executives Harry
Debney and Rod Carroll were fined $1.5 million and $500,000
respectively. Justice Heerey, when imposing the penalties,
said that the fines were:
' . . .reflective of the fact that this must be, by far, the
most serious cartel case to come before the Court in the 30 plus
years in which price fixing has been prohibited by
statute'.
The ACCC's case penalised the wrongdoers. It did not get
compensation for the victims of the cartel conduct. The
admissions made by Visy go to the heart of the damages class
action.
In the statement of agreed facts tendered in the ACCC
prosecution, Visy admitted to 69 contraventions of the Trade
Practices Act including:
-
The following four annual price increase arrangements for
non-contract customers from 2000;
| Date |
Price Increase |
| May 2000 |
Amcor - 7% |
| May 2000 |
Visy - 7% |
| March 2001 |
Amcor 8.5% |
| April 2001 |
Visy - 8.25% |
| March 2002 |
Amcor - 3.5% |
| April 2002 |
Visy - 3.25% to 3.5% |
| March 2003 |
Amcor - 3.5% |
| March 2003 |
Visy 2.5% to 3.25% |
-
Non-compete agreements for principal customers;
-
Compensation arrangements if one contracted with a principal
customer of the other;
- 12 specific anti-competitive arrangements in relation to
substantial Australian companies, including Inghams, Goodman
Fielder, Nestle, Fosters, Coca-Cola Amatil, George Weston Foods,
Hans Smallgoods, OSI, Merino, Mildura Fruit Company, National
Foods, Gillette, Parmalat, Cadbury-Schweppes and Hardy's
Wines.
Initially against three Amcor companies only, the class action
now seeks compensation directly from Visy also. Following
Visy's admissions, the Federal Court ordered (on Jarra Creek's
application) that Visy be formally joined to the class action on 29
November 2007.
The lead applicant has filed its liability evidence and is due to
file loss evidence in February. The matter is likely to go to trial
this year.
Who are the cartel victims?
The cartel's impact on victims is far-reaching. Many industries
spend millions of dollars each year on CFP for their packaging
needs. Industries that have suffered loss include those in
the food and beverage market, including producers of fresh fruits
and vegetables, meat, milk, beer and wine; producers of consumer
goods; automotive and parts manufacturers; the publishing industry
and the pharmaceutical industry.
In his judgment in the ACCC's prosecution of Visy, Justice
Heerey said that
'Every day every man, woman and child in Australia would use
or consume something that at some stage has been transported in a
cardboard box. The cartel in this case, therefore, had the
potential for the widest possible effect' .
The ACCC Chairman Graeme Samuel called the cartel 'one of the
most serious, blatant cartels that the ACCC has litigated.
Anyone in the past who has bought a block of chocolate or a piece
of fruit packed in a box made by Visy or Amcor has probably been
ripped off.'
What you can do
Unless you opted out of the class action before 30 May
2008, you are a group member if you purchased and paid more
than $100,000 (including GST) on CFP between 1 May 2000 and 1
May 2005. If you are a group member, you will be bound
by the outcome of the class action. This means that if the class
action is successful, you will be entitled to benefit from any
judgement, order or settlement, and if the class
action is unsuccessful you will not be able to bring another
case about the same issue.
If you want to benefit from the class action you do not need to
do anything at this stage. However, in preparing the case
against Amcor and Visy, Maurice Blackburn needs to obtain as much
evidence as possible about the financial losses suffered by victims
of the cartel in a range of industry sectors. Your
information about the losses you have suffered will assist us to
formulate a strong case. If the class action is successful,
your information about the losses you have suffered and information
from a number of other victims may assist the Court in determining
how much compensation Amcor and Visy should pay to victims of the
cartel conduct.
We invite you to contact us to discuss your losses and, if you
wish, to retain Maurice Blackburn as your solicitors.
We suggest that you register your interest with us so that we
can keep you informed of developments in the proceeding. If
you do not register with us we will not be able to keep you
informed, although the Court might order that notices about the
case be published in the media from time to time. You do not
incur any obligation by registering your interest.
If you think that you may have a claim it is important that you
keep safe all relevant documents, including any invoices from and
contracts that you may have had with either Amcor or Visy or any
other supplier for the past 10 years.
Further information
If you would like information about the class action or about
retaining Maurice Blackburn as your solicitors, please contact Ben
Slade, Richard Ryan, David Braun, Julian Schimmel or Odette Murray
on (02) 9261 1488.