Following joint submissions from Woolworths, the Arnhem Club and the Australian Competition and Consumer Commission, Justice Mansfield of the Federal Court has made orders against Woolworths SA and the Arnhem Club including restraining them from making or giving effect to arrangements in respect of the price of certain take-away alcohol beverages in Nhulunbuy Northern Territory.
The Australian Competition and Consumer Commission instituted proceedings against Woolworths (SA) Pty Ltd, Rhonwood Pty Ltd (trading as the Walkabout Tavern) and the Arnhem Club Incorporated, alleging that they have breached the price-fixing provisions of the Trade Practices Act 1974 in the market for take-away alcohol in Nhulunbuy, NT by agreeing to stop discounting those products.
Woolworths, the Walkabout Tavern and the Arnhem Club are the major takeaway liquor outlets in Nhulunbuy, Northern Territory, located on the Gove Peninsula in north-eastern Arnhem Land in the Northern Territory.
Woolworths and the Arnhem Club have offered court-enforceable undertakings to provide $300,000 to establish a service to address alcohol-related problems in Nhulunbuy, NT.
"Price-fixing is a serious offence and is prohibited because it restricts or eliminates competition in prices", ACCC Chairman, Professor Allan Fels said today. "Without competition, customers eventually end up paying more.
"The ACCC is pleased that as a result of these proceedings there will be a significant investment of money into the Nhulunbuy community to address the real problems associated with alcohol consumption".
The ACCC is aware of the social context under which the conduct occurred, including the assertion that it was aimed at addressing social problems in and around Nhulunbuy.
"There is no evidence to indicate that the alleged agreement to stop discounting the price of the alcohol products led to lower alcohol consumption. The alleged agreement was not reviewed or evaluated to check its effectiveness in cutting consumption and only ended when the licensees were advised of the ACCC investigation.
"The ACCC was told that Aboriginal groups have a history of opposition to the operations of liquor licenses in Nhulunbuy and had sought a reduction in access to alcohol in the town".
After an extensive investigation, the ACCC instituted proceedings alleging that in January /February 1997, Woolworths, the Walkabout Tavern and the Arnhem Club met and agreed to stop discounting the takeaway sales of cartons of Victoria Bitter beer, Jim Beam Bourbon Whisky White and Berry Riesling Cask Wine. The ACCC alleges that they gave effect to the agreement by stopping discounts on takeaway sales of these goods during the period March 1997 to August 1999.
The outcomes of the court action include:
- Woolworths and the Arnhem Club admitting that they have breached the price-fixing provisions of the Act;
- injunctions restraining Woolworths and the Arnhem Club from repeating the conduct;
- the court noting court enforceable undertakings by Woolworths and the Arnhem Club to donate $300,000 to the Nambarra School Council (Yirrkala CEC) for an alcohol harm reduction, prevention, education or rehabilitation program in Nhulunbuy and the surrounding communities;
- payment of ACCC costs of $80,000;
- the court noting court-enforceable undertakings by Woolworths to review its trade practices compliance program and for the Arnhem Club to implement such a program.
Woolworths and the Arnhem Club consented to today’s court orders.
"Woolworths and the Arnhem Club knew, or ought to have known, that the conduct risked breaching the Trade Practices Act 1974. If there had been any likelihood of a public benefit arising from the conduct, the proper course of action would have been to apply to the ACCC for authorisation of the conduct", Professor Fels said. "It is important to note that the ACCC has the power to authorise conduct that might otherwise breach the anti-competitive provisions of the Act, provided that the anticipated public benefits outweigh the anti-competitive impact of the conduct.
"Woolworths and the Arnhem Club made no approach to the ACCC to seek to have the contravening conduct authorised and therefore the ACCC was not in a position to consider whether or not a public benefit sufficient to have the conduct authorised existed".
The court action is continuing against the Walkabout Tavern.
A further directions hearing for the matter is listed before the Federal Court in Darwin at 9 AM 14 July 2003.