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Legal action initiated against alleged cartel

Commerce Commission initiates legal action against alleged cartel

The Commerce Commission has filed civil proceedings in the Auckland High Court against a New Zealand company, its Australian parent company and four executives for alleged cartel behaviour in the New Zealand corrugated fibre packaging industry.

The companies are Visy Board (NZ) Limited and Visy Board Pty Limited. The Commission is also prosecuting four executives; three are former or current Visy executives and one is a former Amcor executive.

The Commission's allegations centre on customer sharing, price fixing and bid-rigging in relation to the supply of corrugated fibre packaging in New Zealand during the period 2000-2004.

The supply of corrugated fibre packaging, more commonly known as "cardboard boxes", is a significant industry in New Zealand. Cardboard boxes are widely used by both domestic and export businesses as packaging for a wide variety of goods, from primary produce such as meat, fruit and vegetables, to industrial products. The packaging ranges from the basic brown cardboard box to high quality printed packaging such as wine boxes.

Some of the allegations in the claim are similar to those recently concluded in the Australian courts between the Australian Competition and Consumer Commission and Visy.

Commerce Commission Chair Paula Rebstock says "Cartels not only raise prices above competitive levels, but they have a flow on effect to the companies who buy the cartel products for their own businesses."

"For these reasons, cartels are seen as being amongst the most serious forms of anti-competitive behaviour, and businesses can expect the Commission to take very strong action when they are uncovered," says Ms Rebstock.

As the matter is now before the Courts, the Commission will not be commenting further.

Background

Cartels Cartels are arrangements between competitors that breach Part II of the Commerce Act. Cartel conduct may include price fixing, excluding competitors, collusive tendering, bid rigging and market sharing. Cartels usually operate informally and in secret. Cartel conduct is recognised as being a seriously damaging form of anti-competitive behaviour.

ENDS

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