The Federal Court has found FChem (Aust) Limited, Osmose Australia Pty Ltd and Mr Edward Mark Greenacre, a former managing director of Osmose Australia Pty Ltd had engaged in price fixing* in the timber preservatives industry and imposed penalties in excess of $2.5 million.
The Australian Competition and Consumer Commission instituted proceedings in July 2006 alleging price fixing in relation to the supply of various wood preservative chemicals including CCA (copper chromium arsenic) and LOSP (light organic solvent preservatives), products widely used by the timber industry.
The conduct came to the ACCC's attention when Koppers Arch Wood Protection (Aust) Pty Limited came forward with information concerning the conduct. Koppers was granted immunity from prosecution under the ACCC's Leniency Policy. Immunity is conditional upon the company and it employees providing full cooperation and information to the ACCC about the alleged cartel conduct.
The matter proceeded on the basis of Agreed Statements of Facts and Agreed Penalties and was heard before Justice Cowdroy in the Federal Court, Sydney on 19 November 2007.
Justice Cowdroy accepted joint submissions regarding injunctions and declarations. The joint submissions also took into account that the parties had cooperated with the ACCC investigation and that the penalties submitted to the court were discounted to reflect this cooperation.
During the course of the ACCC's investigation Osmose terminated Mr Greenacre's employment.
The ACCC alleged Mr Greenacre called his counterparts at Koppers Arch on numerous occasions in an attempt to fix prices and either share or avoid particular customers. Mr Greenacre was the Group General Manager of Fernz Timber Protection. When this business was purchased by Osmose in 2001 he then became the group general manager and eventually managing director of Osmose Australia and Osmose New Zealand.
The ACCC alleged that the price fixing agreement was in operation for a number of years prior to 1998 and persisted until 2001. There were only a small number of meetings between the two companies about pricing, but attempts to enforce the agreements occurred mostly through telephone conversations, initiated by Mr Greenacre.
Justice Cowdroy accepted the submitted penalties of $1.25 million for FChem; $1.25 million for Osmose and $120,000 for Mr Greenacre saying: "Although the proposed penalties are substantial there are demonstrable reasons which leads the Court to conclude that such penalties are appropriate."
The ACCC was also awarded costs.
FChem, Osmose, Koppers and Mr Greenacre have also been penalised in New Zealand for similar conduct.
"Even though the impact on consumers was minimal, and only three contraventions of the Act were in time for penalty; the size of the penalties serves as a reminder of the seriousness of the conduct and the ACCC's determination to continue to seek high penalties against corporations and individuals involved in anti competitive cartel conduct," ACCC Chairman, Mr Graeme Samuel, said today.