The Federal Court today declared that Tassal Limited and the Tasmanian Salmonid Growers Association were involved in an anti-competitive agreement to restrict the supply of Atlantic salmon.
In proceedings brought by the Australian Competition and Consumer Commission, the court found that the TSGA facilitated an illegal agreement in February 2002 between Tassal Ltd and other Atlantic salmon farmers to cull 10 per cent of their salmon stocks. The cull was intended to limit the amount of Atlantic salmon available for sale later in 2002-03, and thereby reduce the scope of any price reductions caused by supply outpacing demand.
"The conduct occurred after the TSGA obtained legal advice that the fish cull was unlikely to contravene the Trade Practices Act 1974 ", ACCC Chairman, Mr Graeme Samuel, said today. "However the legal advice was based on a misapprehension of the facts of the situation.
"Tassal subsequently conducted a partial cull of some 70 tonnes of Atlantic salmon stock in April 2002, giving effect to its obligations under the agreement. The agreement was rescinded after the parties were contacted by the ACCC and had obtained a separate legal advice based on a full appreciation of the facts. Tassal was the only farmer which undertook the cull before the agreement was abandoned.
"The culling agreement and Tassal's subsequent partial cull occurred before the appointment of a Receiver Manager to Tassal in June 2002.
"Under the Trade Practices Act 1974, it is illegal for competitors to make agreements with the purpose, or likely effect, of controlling the price of their goods or services. In this instance the court declared that the agreement to cull fish had the likely effect of controlling prices because it sought to limit supply and thereby artificially reduce consumers benefiting from lower prices which usually occur when production rises".
The Federal Court by consent imposed injunctions on the TSGA and Tassal restraining them from being involved in further culling agreements. Tassal and the TSGA will also establish a trade practices education program for their staff and members. The respondents will pay the ACCC's costs.