Court endorses penalty in trans-Tasman cartel case
Issued 22 August 2013
Release No. 13
Visy Board Pty Ltd (Visy) has been ordered to pay a penalty of $3.6 million in the High Court in Auckland today, and its
former senior executive John Carroll $25,000, for breaching the Commerce Act by being involved in price fixing.
As part of a pre-trial settlement, Visy admitted liability for its role in illegal arrangements with Amcor Ltd, a
competitor, to divide certain trans-Tasman corrugated fibreboard packaging customers (Coca Cola, Goodman Fielder and
Fonterra) between them, in breach of the price fixing prohibition in the Commerce Act. Mr Carroll admitted being
knowingly concerned in, or party to, Visy’s conduct in relation to the Fonterra tender for corrugated fibreboard
“The Commission is very pleased to have successfully resolved its long running case against these defendants,” said
Commerce Commission Chairman Dr Mark Berry.
“As the Court of Appeal explained when issuing a ruling on this case last year, ‘cartel conduct has a damaging impact
upon society’. Preventing price fixing is important to protect New Zealanders from anti-competitive conduct, and the
substantial penalty the Court awarded should be a deterrent to others who might breach the Act,” said Dr Berry.
The Commission’s case against Visy involved the company’s conduct in relation to three tenders in the periods January to
March 2001 for Coca Cola, mid 2001 for Goodman Fielder and April to July 2004 for Fonterra.
The case follows earlier proceedings by the Australian Competition and Consumer Commission in which Visy, and Mr Carroll
(among other defendants), admitted that they were parties to a cartel with Amcor in the Australian corrugated fibreboard
The Federal Court of Australia imposed penalties of AU$36 million against Visy and AU$500,000 against Mr Carroll. Both
Visy and Mr Carroll objected to the Commission pursuing its claims in New Zealand. In August 2012, the Court of Appeal
ruled that the High Court had jurisdiction to hear the Commission’s claims against Visy.
In addition to the $3.6 million penalty, Visy will pay $50,000 towards the Commission’s costs. The penalty, which was
recommended to the Court by both the Commission and Visy, included a discount for Visy’s admissions.
Cartels are arrangements between competitors that breach Part 2 of the Commerce Act. Cartel conduct may include
price-fixing, excluding competitors, colluding on tenders, bid rigging and market sharing. Cartels often operate
informally and in secret. Cartel conduct is recognised as being a seriously damaging form of anti-competitive behaviour.
The Commission operates a Cartel Leniency Policy. The Cartel Leniency Policy offers individuals or businesses involved
in a cartel the opportunity to be granted conditional immunity from Commission prosecution. Immunity is conditional
because it depends on the cartel member continuing to provide information and cooperate with the Commission's
investigation and any court proceedings.
Immunity protects a cartel member from legal action by the Commission, however, it does not prevent third parties from
making claims for damages. The Commission will grant immunity to the first member of a cartel to approach us, provided
they meet the immunity requirements.
You can read more about the Commission's Leniency policy at: http://www.comcom.govt.nz/leniency-policy-for-cartels/