Woolworths fined $7m
December 22, 2006
Woolworths Ltd has been fined $7 million for entering into illegal
anti-competitive agreements relating to its liquor business.
Justice Allsop of the Federal Court found that Woolworths had entered into
four agreements with liquor license applicants with the specific purpose of
lessening competition.
The action was brought by the Australian Competition and Consumer Commission
in June 2003 against Woolworths and Coles Group subsidiary Liquorland for
entering into anti-competitive agreements.
Liquorland admitted it had entered into illegal agreements and was fined
$4.75 million in May 2005, while the case against Woolworths continued.
Justice Allsop said Woolworths' purpose for entering into the agreements was
aimed at preventing the entry of new competitors into local retail packaged
takeaway liquor markets so as to protect Woolworths' liquor business.
ACCC chairman Graeme Samuel welcomed the penalty imposed on Woolworths.
"Whilst it is normal business practice for companies to seek to defend
their sales from their competitors, companies must ensure that they seek to
protect their sales by legal means," he said.
"Entering into agreements with competitors to prevent the loss of sales
or market share is an entirely inappropriate and illegal means of protecting
your business."
Woolworths entered into the agreements with the Ettamogah Bar &
Restaurant in Campbelltown, the Dry Dock Bottleshop and Global beer Importers in
Tweed Heads, and Jin Ro Australia in Arncliffe.
At 12.55pm, Woolworths shares was 23 cents higher at $23.55.
AAP
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