Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Caltex, Mobil and Shell Fined For Price Fixing

Caltex, Mobil and Shell were price fixing: High Court imposes $1.175 million penalties

The Auckland High Court today ordered Caltex New Zealand Limited, Mobil Oil New Zealand Limited and Shell New Zealand Limited to pay penalties totalling $1.175 million for breaching the Commerce Act by price fixing.

Commerce Commission Chair John Belgrave said that the Commission is delighted that after a long defended hearing Caltex, Mobil and Shell were found to have breached the price fixing provision of the Act.

"I believe that this is the first time anywhere in the world that it has been proved that a group of major oil companies acted anti-competitively over the price of petrol," Mr Belgrave said. "There have been successful cases against individual oil companies, but not against a group of major companies."

In October last year the Court found that the Commission had proved its case.

The Commission had alleged that the three companies colluded to jointly withdraw a discount from the price of petrol at more than 50 Auckland petrol stations. The discount was in the form of a free car wash offered to customers who spent $20 or more on fuel.

In his Judgment, Justice Salmon stated that the discount "… did operate as an integral part of petrol pricing or was a discount in relation to petrol."

He also stated "… that representatives from each of the oil companies made relevant untruthful statements to the Commission."

The Commission filed its statement of claim in September 1997.

Caltex and Mobil took unsuccessful strike out actions against the Commission’s case to the High Court and the Court of Appeal. The Courts rejected both challenges.

The trial was held in August and September last year, and Justice Salmon gave his decision in October.

The sentencing hearing was held two weeks ago, and Justice Salmon issued his decision on penalties today. He has ordered Caltex to pay $450,000, Mobil to pay $350,000 and Shell to pay $375,000.

Mr Belgrave said that the Court’s decision sends strong warnings to all businesses.

"First, price fixing is a major breach of the Commerce Act. It is fundamentally anti-competitive and anti-consumer. It limits—or even eliminates—consumers’ ability to shop around for the best prices. The oil companies profited, consumers paid more.

"Secondly, businesses must realise that price fixing covers all parts of a price, not just the final retail price. Formal and informal agreements among competitors about discounts, commissions, mark-ups and all other parts of prices are strictly prohibited.

"The Commission will continue to take action against price fixing."

Other Commission court action against anti-competitive pricing arrangements includes:

 Nine North Island meat companies, total penalties $5.51 million, including $1.5 million against each of Affco New Zealand Limited, Richmond Limited and Lowe Walker NZ Limited
 Eli Lilly & Co (NZ) Limited’s animal health remedies division, Elanco, and Chemstock Animal Health Limited, total penalties of $700,000
 Christchurch Transport Limited and its Chief Executive, total penalties $400,000
 Seven Auckland Toyota dealers, total penalties $350,000; action is continuing against an eighth dealer
 Country Fare Bakeries Limited and Quality Bakers New Zealand Limited, total penalty $300,000
 Toyota New Zealand Limited, $250,000 penalty
 DB Breweries Limited, $110,000 penalty
 Acer Computer New Zealand Limited, $83,000 penalty

© Scoop Media

Business Headlines | Sci-Tech Headlines


Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>


Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>


Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>


CO2 And Water: Fonterra (And Dairy NZ)'s Environment Plans

Federated Farmers support Fonterra’s bold push to get to zero emissions of CO2 on the manufacturing side of the Co-operative, both in New Zealand and across its global network. More>>


Fisheries: Decision To Delay Monitoring ‘Fatally Flawed’

Conservation group representatives say a decision by the new Minister of Fisheries, Stuart Nash, to delay implementation of camera monitoring of fishing efforts in New Zealand is ‘fatally flawed’. More>>