Ever wanted an ice-cream other than Peters “Drumstick”, “Maxibon”, “Connoisseur”, “Frosty Fruits” or “Billabong”, at your local Woolworths Petrol, BP, Coles Express, United and Caltex service stations, and wondered why you can’t find an alternative? Well a recent investigation by the ACCC may shed some light on why consumer options may have been limited and why may consumers have more options in the future.
Proceedings initiated by the ACCC on 19 November 2020 allege that Australasian Food Group Pty Ltd has contravened section 47 of the Competition and Consumer Act 2010 (Cth) (CCA). It is alleged this conduct occurred during the period from at least 21 November 2014 to around December 2019 (“the relevant period”), and relates to exclusive dealing and restrictive terms in a distribution agreement between Peters and PFD Food Services Pty Ltd (PFD). This agreement allegedly discouraged new entrants into the PFD market, that is currently held by Peters. The Distribution agreement was said to contain a condition that PFD could not supply any ice-cream brands from Peters’ competitors to its service station and convenience store clients, despite requests from PFD to distribute other ice-creams.
The ACCC alleges that it is difficult for new entrants to enter the national petrol and convivence (P&C) retailers market, and their PFD was the only distributor capable of distributing single-wrapped ice cream products to P&C retailers on a commercially viable basis. Unlike PFD, other potential distributors did not have a national frozen food route to these P&C retailers. New entrants would have to incur the cost of establishing their own distribution network to distribute single-wrapped ice creams nationally, which is not commercially viable. Peters disputes the allegations.
This issue of exclusive dealing and restrictive terms has been dealt with before in the ACCC v Australian Safeway Stores Pty Ltd  FCAFA 149 (30 June 2003) and ACCC v Liquorland (Australia) Pty Ltd  FCA 826. Both cases are examples of behaviours that are found to have breached the then applicable Trade Practices Act (TPA), s45 the equivalent of which is s47 of the CCA. The judges in the above cases ruled in favour of the ACCC and fines were issued in the millions.
The ACCC revealed that during the ACCC’s investigation, Peters advised without admission that they have recently entered into a new agreement with PFD, which no longer includes a term restricting the ice cream products, which PFD can distribute.
These proceedings are ones to watch to see if the ACCC will get the declarations, pecuniary penalties, compliance program order and costs that it is seeking.
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