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Further Information
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.
1. 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:
| 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% |
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 class action has reached the ‘discovery’ stage and is likely to go to trial in 2009.
2.
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.’
3. 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.
4. 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.
