ACCC seeks assistance for investigation of agreements restricting liquor trading

The Australian Competition and Consumer Commission is seeking assistance from applicants for liquor licences in a major investigation of alleged anti-competitive agreements between proprietors of licensed premises, ACCC Chairman, Professor Allan Fels, announced today.

"The investigation follows complaints received by the ACCC that established bottleshop operators have been trying to ensure that new operators of hotels do not compete against them by requiring the new operators to enter agreements which prevent them from:

• ever opening a competing bottleshop or driveway facility for the sale of takeaway liquor
• selling takeaway liquor over the counter to hotel patrons
• advertising or conducting promotions for the sale of takeaway liquor over the counter to hotel patrons
• preventing the hotel from home delivery of takeaway liquor, eg for parties, functions or home consumption

"The ACCC wants proprietors of licensed premises around Australia who may have unwillingly entered into allegedly anti-competitive agreements, or recently had such an agreement offered to them, to contact the ACCC immediately to explain the circumstances of their conduct.

"Agreements by businesses not to compete with each other are generally unlawful and the ACCC is concerned that some of the alleged agreements of which it is aware may breach the Trade Practices Act 1974. "The ACCC fears consumers may have been forced to pay higher prices for take-away liquor in many local areas of Australia, including rural and regional area, as a result of these alleged agreements - plus consumers have had lesser choice and convenience due to fewer competing liquor outlets.

"The ACCC understands the alleged agreements are often enshrined in legally-enforceable deeds that stop new operators from ever competing with the established operator. Such deeds appear to be rife within NSW (presently the principal area of investigation), with possibly many hundreds of deeds in existence. The ACCC also understands that the entering into of these alleged agreements has been occurring for a number of years and is continuing.

"Although the investigation is currently centred on NSW, the ACCC is investigating whether such alleged agreements are being entered into between applicants for liquor licences and established bottleshop operators in other states. "The ACCC has interviewed a number of participants in the liquor industry about such alleged agreements and has obtained copies of both executed and unexecuted deeds.

"The ACCC understands that in some situations applicants for liquor licences may have entered into such alleged deeds against their will where established operators lodge objections to the licence applications. Some applicants, when faced with likely significant financial losses from delays while competitor's objections are waiting to be heard before the relevant liquor licensing authority, may have unwillingly agreed to certain restrictions (proposed by competitors) on their future trading activities. It would appear that in return for this alleged agreement to restrict the applicants' future trading activities, the competitor agrees to withdraw its objection(s).

"In appropriate cases, the ACCC may take a more lenient view of an individual breaking the Trade Practices Act 1974 where he/she can provide a sufficiently compelling explanation of why the agreement was made and if he/she is willing to fully cooperate with the ACCC. "Licensees who wish to contact the ACCC about alleged agreements should telephone the ACCC Information Centre on 1300 302 502".