Federal Court orders $23.3 million in penalties for petrol price-fixing

Pecuniary penalties totalling $23.305 million were ordered by the Federal Court today for price-fixing conduct in the Ballarat petrol market.

The ACCC instituted proceedings against 16 respondents alleging a number of competitors in the Ballarat region were part of a long-standing arrangement to fix retail petrol prices.

A number of respondents made admissions and proceeded to early penalty hearings before Justice Goldberg. The contesting respondents proceeded to a trial before Justice Merkel.

On 17 December 2004, Justice Merkel found the contesting respondents engaged in price-fixing conduct in breach of section 45 of the Trade Practices Act 1974.

Today, Justice Merkel ordered the contesting respondents pay pecuniary penalties in the sum of: 

• $1 million against Triton 2001 Pty Ltd and $100,000 against its Ballarat Area Manager, Mr Anthony Rosenow
• $3 million against Apco Service Stations Pty Ltd and $200,000 against its Director, Mr Peter Anderson
• $4 million against Brumar (Vic) Pty Ltd (in liquidation) and $100,000 against its Retail Area Manager, Mr Garry Dalton
• $5 million against Balgee Oil Pty Ltd*
  

In the reasons for judgment, Justice Merkel said: "The circumstances of the present case suggest that the substantially increase monetary penalties provided for by the legislature in respect of conduct contravening Pt IV of the Act, and the numerous occasions on which the Court has imposed substantial penalties on arrangements and understandings proscribed by Pt IV of the Act, have had little, if any, affect on the parties to the price-fixing understanding."

"It behoves all employees and corporations to take active steps to ensure an awareness of the Trade Practices Act", ACCC Chairman, Mr Graeme Samuel, said. "For employees this may mean requesting trade practices compliance training".

The admitting respondents each submitted a statement jointly with the ACCC detailing their involvement in the conduct and admitting to contraventions of the Act. The ACCC acknowledged in its submissions to the court on penalty, that the admitting respondents had satisfied the requirements of the ACCC's cooperation policy and accordingly recommended relatively low penalties. The penalties ordered by Justice Goldberg reflect a discount based on cooperation provided to the ACCC.

Today, Justice Goldberg ordered the admitting respondents pay pecuniary penalties in the sum of:

• $2.5 million against J. Chisholm Pty Ltd
• $3 million against Justco Pty Ltd and $200,000 against its Director, Mr Justin Bentley
• $1.5 million against Leahy Petroleum Pty Ltd, $2.5 million against Leahy Petroleum – Retail Pty Ltd and $100,000 against their General Manager, Mr Robin Palmer
• $40,000 against Mr John Gourley (the General Manager of Balgee Oil Pty Ltd*)
• $40,000 against Mr Peter Muller (Ballarat Operations Manager of Balgee Oil Pty Ltd*)
• $25,000 against Mr Robert Levick (Ballarat Area Sales Representative of Balgee Oil Pty Ltd*)
  

ACCC Chairman, Mr Graeme Samuel, said price-fixing was a very serious breach of the law which would not be recognised as such by senior corporate employees and directors until gaol terms are introduced.

"All penalties ordered today clearly reflect the court's disapproval of such conduct." 

In addition to penalties, the Federal Court also declared the conduct in breach of the Act and ordered injunctions against the respondents prohibiting them from communicating to or obtaining from competitors the retail price of fuel for a period of four years and ordered that the respondents pay the ACCC's costs.

* formerly Balgee Oil Pty Ltd, now Cavallo Volante Pty Ltd (Subject to Deed of Company Arrangement)

Background

On 21 May 2002 the ACCC instituted proceedings against a total of 14 companies and individuals, alleging a long-standing price-fixing arrangement existed in the market for the supply of petrol in the Ballarat region. On 20 December 2002, the Federal Court granted the ACCC leave to join two further respondents. The legal proceeding was instituted after an extensive investigation by the ACCC which first commenced following allegations by Mr Trevor Oliver, a service station operator in Buangor who was at the time supplied by one of the alleged participants.

The ACCC alleged the companies arranged to increase prices by telephoning each other, communicating the size and approximate time of price rises and then contacting retail sites to implement the rises. The ACCC alleged when a company became aware that a service station had not raised its price, further calls were made to participants in order to have the site raise its prices. The ACCC also alleged the arrangement involved a number of meetings.