ACCC takes court action against alleged attempt to fix flour prices by George Weston Foods Limited

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court, Sydney, against George Weston Foods Limited and Mr Paul Benedict Loneragan, a former Director of George Weston, alleging an attempt by George Weston and Mr Loneragan to induce a competitor to agree to increase the wholesale price of wheaten flour* in contravention of the Trade Practices Act 1974.

The ACCC alleges that in November 1999 Mr Loneragan called senior representatives of a competitor stating that George Weston's prices were rising and that they should cooperate and do the same. At the time Mr Loneragan was a Divisional Chief Executive of George Weston, responsible for its milling activities nationally.

The ACCC further alleges that Mr Loneragan made a second call to the same competitor stating that George Weston was putting flour prices up and was looking for cooperation from that competitor.

The ACCC is seeking:

• declarations that George Weston and Mr Loneragan breached the Trade Practices Act;
• penalties;injunctions restraining George Weston and Mr Loneragan from engaging in similar conduct to that alleged in the future;
• a comprehensive review of George Weston's trade practices compliance program;
• findings of fact; and
• costs.

A directions hearing has been set for the Federal Court on 7 February 2003 at 9.30 a.m.

* Wheaten flour: almost all of the bread baked in Australia is made from wheaten flour.