ACCC Launches Legal Action Over Alleged Fresh Produce Price fixing
The Australian Competition and Consumer Commission (ACCC) has initiated court proceedings against several fresh produce suppliers over allegations of cartel conduct involving price fixing. The case centres around the supply of vegetables to supermarket chain ALDI, specifically concerning produce sold under “agile” pricing arrangements.
The ACCC alleges a cartel existed, where businesses agreed to act together instead of competing, violating competition laws. This alleged conduct primarily relates to the ’agile’ supply category, where suppliers are required to submit weekly quotes for produce like broccoli, cauliflower, and iceberg lettuce.
The suppliers involved are: Veli Velisha Fresh Produce Pty Ltd (which ceased operations around june 2019 following a sale to Velisha National farms), Velisha National Farms Pty Ltd, and M. Fragapane & Sons Pty Ltd (trading as Fragapane Farms).Veli Velisha Fresh Produce previously grew and supplied a wide range of produce including cauliflower, cucumber, broccoli, iceberg lettuce, zucchini, spring onion and Brussels sprouts. velisha National Farms currently supplies cauliflower, cucumber, broccoli, iceberg lettuce, zucchini and spring onion to Victoria, New South Wales, Queensland, South Australia and Tasmania. Fragapane Farms grows and supplies cauliflower, broccoli, iceberg lettuce, and celery to Victoria, New South Wales, Queensland, South australia and Western Australia.
The ACCC is seeking penalties for breaches of competition law. For conduct occurring before November 9, 2022, the maximum civil penalty for businesses is the greater of $10 million, three times the value of any benefits obtained, or 10 per cent of the company’s annual turnover during the 12 months ending when the alleged conduct occurred. Individuals face a maximum penalty of $500,000 per contravention.
For conduct occurring after November 9, 2022, the penalties have increased significantly.The maximum civil penalty for businesses is the greatest of $50 million, three times the value of any benefit obtained, or 30% of adjusted turnover during the breach period. The maximum penalty for individuals is now $2.5 million per contravention.
The ACCC encourages anyone with information about potential cartel conduct to contact the ACCC Cartel Immunity Hotline on (02) 9230 3894 or to report anonymously via the ACCC’s online cartel portal: https://accc-cartels.whispli.com/cartels?locale=en#refresh. Further information about cartels and the immunity process is available on the ACCC website: https://www.accc.gov.au/business/competition-and-exemptions/cartels.
