The majority of Tasmanias major frozen foodservice industry wholesalers will pay in excess of $1.54 million in total penalties for their respective roles in long-running price fixing in the frozen foodservice industry.

The penalties follow an extensive Australian Competition and Consumer Commission investigation and subsequent Federal Court action. The participants will also pay the ACCCs costs.

The wholesalers, when taken as a whole, supply frozen food to businesses such as restaurants, hotels and take-aways throughout Tasmania. The products involved in the price fixing varied in different parts of Tasmania and variously include chips, scallops, flake, chickens, turkeys and Sara Lees entire range of desserts. The earliest price fixing began in 1991 and continued until the ACCC began its investigation in March 1995.

A total $1.3 million penalty was imposed against Clements Marshall Consolidated Limiteds wholly owned subsidiary, N.W. Frozen Foods Pty Ltd (trading as Allfood) ($1,200,000); its general manager, Richard Dally ($60,000); its north-west branch manager, Stephen Rimmer ($20,000); northern branch manager, Kerry Vincent ($10,000); and its southern branch manager, Colin Harris ($10,000).

A total $100,000 penalty was imposed against Northern Food Service Pty Ltd ($70,000) and its managing director, Bill Dabner ($30,000).

A total $90,000 penalty was imposed against Bulk Frozen Foods Pty Ltd ($60,000) and its managing director, Bruce Frith ($30,000).

A total $45,000 penalty was imposed against Southern Foodservice Pty Ltd ($30,000) and its managing director, Phillip Gumley ($15,000).

A penalty of $10,000 was imposed against Emmanuel Klonaris, proprietor of Cut Price Frozen Foods.

Other orders included restraining injunctions against each of the participants (corporate and personal) for a period of five years.

The court also ordered each business to develop, in conjunction with the ACCC, an internal education and compliance program to ensure that all relevant staff are aware of their obligations under the Trade Practices Act.

"This represents the end of a year long investigation", ACCC Chairman, Professor Allan Fels, said today. "It involved some of Tasmanias largest food service wholesaling businesses and their senior managers."

From at least 1991 until the ACCC began its investigation in March 1995, the wholesalers held meetings and telephone conversations during which they set minimum prices for various common foodservice lines.

Allfood has in excess of 50 per cent market share in each area. The total market share of all of the price fixers would have accounted for 80 to 90 per cent in each market. The foodservice industry in Tasmania is worth in excess of $70 million a year.

As well as being the biggest of the price fixers, Allfood was also the most active participant and played a dominating role in organising and enforcing adherence to the agreements. The majority of the price fixing meetings were held at premises operated by Allfood. All of the agreements were between Allfood and each of the other respondents.

Allfood's General Manager, Richard Dally, encouraged his branch managers to enter into many of the price fixing agreements and in some instances, where an agreement was being breached, he acted to secure compliance.

In his reason for decision, Heerey J commented: "It is sad that a company with a long and proud business record has become involved, and at senior management level, in such seriously unlawful conduct."

Heerey J also commented that: "It is a depressing thought that the introduction of the vastly increased (and widely publicised) penalties in January 1993 had no effect whatsoever on Mr Dally and Allfood Distribution. It was business as usual."

Philip Gumley, Bruce Frith and Bill Dabner, the Managing Directors of Southern Foodservice Pty Ltd, Bulk Frozen Foods Pty Ltd and Northern Food Service Pty Ltd respectively, and Emmanuel Klonaris, the proprietor of Cut Price Frozen Foods were each involved in negotiating price fixing agreements on behalf of their respective businesses.

The price fixing was centred around chips, a basic line used by almost all of the price fixers' customers. On occasion, the price fixing even extended to the humble dim-sim. Other staple items included flake, scallops and chickens. There were also attempts by Allfood to have price fixing agreements on the traditional Christmas turkey. The agreements also covered the entire range of Sara Lees dessert products, from plain vanilla ice-cream to black forest cakes.

"The restaurant and hotel trade is a major employer in Tasmania and price fixing by the wholesalers of common lines like chips, seafood and poultry can directly affect the bottom line."

The ACCCs investigation revealed that Allfood adhered to the agreements much more than the other respondents, who would often cheat on the agreements by, for example, providing free stock or rebates.

"It should be noted by all businesses that none of the price fixers had provided their staff with any training as regards their obligations under the Trade Practices Act - one of Australias most important pieces of business legislation.

"The companies involved assisted the ACCC with its investigation. This cooperation ultimately led to a substantial decrease in the penalty that the ACCC would otherwise have sought as well as a major saving in court time.

"The cooperation shown by the parties allowed the respondents and the ACCC to agree, prior to the matter going to court, on the penalty the parties would ask the court to impose. These 'consent proceedings' are now regularly used by the ACCC resulting in substantial savings in costs and court time for all those involved."

In his reasons for judgement, Heerey J said that: "it is in the public interest that respondents who do not contest allegations, even allegations as serious as these, should be entitled to substantial discounts on the penalty which might otherwise have been appropriate.

Heerey J continued: "Had this matter to be considered after a full investigation and contested litigation, I think an appropriate penalty would be $1.5 million. Were Clements Marshall a larger group, the penalty would be greater, perhaps a lot greater. An appropriate discount to allow for the saving as a result of the cooperation that has taken place is $300,000. The Clements Marshall Group has also saved its own costs of protracted litigation which would be at least that amount, and possibly two or three times more."

Professor Fels said: "The lesson here is plain - if you're involved in price fixing or any other anti-competitive conduct, it's in your interest to co-operate with the ACCC."

The Trade Practices Act prohibits competitors entering into price fixing agreements with each other. Section 45A of the Act defines a price fixing agreement as being a provision of a contract, arrangement or understanding that has the purpose or effect of fixing, controlling or maintaining the price of goods or services.

Prior to January 1993, price fixing could attract a penalty of up to $250,000 for a company and $50,000 for an individual. Since January 1993 the penalties have increased to $10 million and $500,000 for a company and individual respectively.

In determining the penalty, the Court takes into account factors such as:

  • The nature and extent of the contravening conduct;
  • The amount of loss or damage caused;
  • The circumstances in which the conduct took place;
  • The size of the contravening companies;
  • The degree of power the companies have;
  • The deliberateness of the contraventions and the period over which it extended.
  • The extent of senior management involvement;
  • Whether the companies have a corporate culture conducive to compliance; and
  • Whether the companies cooperated with the authorities.

The following tables show the number of contraventions found against each wholesaler. The 'number of breaches column includes breaches relating to attempting to make, making and putting into effect price fixing agreements.

Area of operation


Number of breaches



N.W. Frozen Food Pty Ltd (Allfood)




Northern Food Service Pty Ltd




Bulk Frozen Foods Pty Ltd




Southern Foodservice Pty Ltd




Emmanuel Klonaris t/as Cut Price Frozen Foods







Person Involved

Number of Breaches



Richard Dally, General Manager, Allfood



Northwest Tasmania

Stephen Rimmer, Branch Manager, Allfood

Bruce Frith, Managing Director, Bulk Frozen Food Pty Ltd





Northern Tasmania

Kerry Vincent, Branch Manager, Allfood

Bill Dabner, Managing Director, Northern Food Service Pty Ltd





Southern Tasmania

Colin Harris, Branch Manager, Allfood

Phillip Gumley, Managing Director, Southern Foodservice Pty Ltd

Emmanuel Klonaris, Proprietor, Cut Price Frozen Foods



included in table above



included in table above