$1.25 million penalty on Tip Top for price fixing, RPM

A penalty of $1.25 million was imposed today on George Weston Foods Limited for fixing the price of bread and attempted resale price maintenance.

The Australian Competition and Consumer Commission had filed Federal Court proceedings alleging that the company, trading as Tip Top Bakeries, had ceased supplying retailers because the retailers were discounting bread.

The incidents occurred in Ferntree Gully and Albury in November 1995. The company also admitted to unsuccessfully attempting to have an Albury retailer cease discounting in May 1995. It also admitted having reached an agreement with Safeway to increase the price at which the Tip Top retail store in Preston would sell bread to the public.

The company admitted the contraventions and has substantially assisted the ACCC with its investigation from an early stage. The ACCC alleged that each of the contraventions by Tip Top arose out of pressure exerted on it by Safeway. Safeway have denied the allegations made against it by the ACCC.

In his decision Justice Goldberg said:

"When a corporation's commercial activities substantially permeate the commercial and consumer life of the public it is appropriate in my view, to take that fact into account in determining an appropriate level of penalty for contravention."

"The ACCC is concerned whenever manufacturers, or wholesalers, try to manipulate retail prices or decide who will, or will not, be able to act competitively." ACCC Chairman, Professor Allan Fels, said today. "This is a case where the rights of small businesses, who were attempting to compete with larger supermarkets, were ignored for the purposes of preserving Tip Tops relationship with its larger customers.

"The ACCC will have no hesitation in taking appropriate action should similar circumstances occur in the future."

The ACCC has alleged that Australian Safeway Stores Pty Ltd ("Safeway") and two of its employees were involved in the incidents and in others involving other bread manufacturers. Safeway denies the allegations and the matter continues to progress to trial.

Further information Professor Allan Fels, Chairman, (06) 264 2808 or pager (016) 373 536 Ms Lin Enright, Director, Public Relations, (06) 264 2808