ss. 45, 46. Alleged price fixing and misuse of market power
23 December 1996: Proceedings were instituted in the Federal
Court, Melbourne, alleging Safeway had a policy of removing a particular
baker’s products from sale when their products were on special at nearby
independent stores. The ACCC alleged that the conduct of Australian Safeway
Stores Pty Ltd (Safeway) in 10 separate incidents involved, among other
things, price fixing and misuse of market power.
21 December 2001: Following a 92 day trial held in
1999, Justice Goldberg handed down his decision dismissing the ACCC’s
proceedings against Safeway. The ACCC appealed to the Full Federal Court.
30 June 2003: The Full Court unanimously agreed that the
ACCC had established Safeway had engaged in price fixing of bread to be sold at
the Tip Top bakery store located in Preston Market. The majority of
the court found that Safeway had misused its market power in four of nine
incidents pleaded, but not in the other five incidents pleaded.
Both Safeway and the ACCC have made applications seeking special leave to
appeal to the High Court on various aspects of the Full Federal Court decision. Hearing
of special leave application set for 10 September 2004.
10 September 2004: Special leave application by Safeway and
the ACCC were refused by the High Court. The matter is to be remitted to the
trial judge for penalty on a date to be set.
6 June 2005: Penalty hearing was completed on 6 June;
awaiting decision on penalty.
31 January 2006: The Federal Court handed down the
highest-ever, court-ordered financial penalties for the misuse of market power.
The following penalties totalling $8.9 million were imposed on Australian
Safeway Stores:
- $900 000 for the price fixing at Preston Market
- $2.1 million for the misuse of market power in the Frankston incident
- $1.9 million for the misuse of market power in the Cheltenham incident
- $2.1 million for the misuse of market power in the Vermont incident
- $1.9 million for the misuse of market power in the Albury (May 1995)
incident.
The court also declared that Mr Mark Jones, the bread category manager at the
time, was knowingly concerned in the price fixing arrangement between Safeway
and Tip Top in relation to the price of bread at Preston Market. The court
ordered Mr Jones pay a penalty of $50 000.
See related news release on the ACCC website:
ACCC Seeks Leave to
Appeal to the High Court Over Safeway
