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Penalties imposed in container depot price fixing case


The High Court has ordered Specialised Container Services (Christchurch) Limited (SCS Christchurch) and its director Grant Tregurtha to pay penalties in relation to an attempted price fix of “vehicle booking system” fees.

The Commission filed proceedings against SCS Christchurch and Mr Tregurtha in December 2019.

The Commission alleged that Mr Tregurtha, a director of SCS Christchurch, attempted to reach an agreement with a competitor to charge the same or similar “vehicle booking system” fee to customers of its container depot. The Commission alleged, and SCS Christchurch and Mr Tregurtha admitted, that this conduct amounted to an attempt by SCS Christchurch and Mr Tregurtha to enter into a price fixing agreement with a competitor in breach of the Commerce Act.

The High Court imposed penalties of $62,500 against SCS Christchurch and $24,000 against Mr Tregurtha. The Court found the appropriate starting point for SCS Christchurch was within the range of $500,000-$650,000 taking account of the short duration of the conduct, the nature of the market, and Mr Tregurtha’s role as a director. The end penalty was adjusted due to SCS Christchurch’s financial position. The appropriate starting point for Mr Tregurtha was agreed to be $25,000-$30,000.

The High Court acknowledged the integrity of the competitor approached by Mr Tregurtha, whose actions ensured that a price-fixing agreement was not concluded.

Commission Chair Anna Rawlings said this case shows the importance of avoiding discussions with competitors on pricing that might fall foul of the law, even if an actual agreement is not reached.

“Cartel conduct can harm consumers through higher prices, and it can harm other businesses which are trying to compete fairly. Since April this year individuals engaging in cartel conduct have been liable for a term of imprisonment of up to 7 years and financial penalties that can be imposed against individuals and businesses,” said Ms Rawlings.

“This underlines the importance of businesses and their directors making sure that they understand their obligations and how to stay on the right side of the law.”

Businesses or individuals encountering cartel conduct can contact the Commission. Those who consider they may be party to cartel conduct should do so as soon as possible. The Commission can grant leniency to the first member of a cartel to approach it, provided they meet the requirements for leniency. More details on the Leniency policy can be found on our website. Businesses and individuals can also use the Commission’s anonymous whistleblower tool.

Read the judgement here.

Background

SCS Christchurch operated a container depot in Waltham, Christchurch, as part of a group of companies known as The Specialised Group, operating container depots in 10 locations across New Zealand. The head office of The Specialised Group and administrative services are provided by Pinnacle Corporation Limited. SCS Christchurch ceased operating in late 2019 for reasons unrelated to this proceeding.

Vehicle booking systems are used by some container depot operators to facilitate the booking of time slots for delivery and collection of containers at the depots. Container depot operators sometimes charge a fee for bookings made.

A cartel is where two or more businesses agree not to compete with each other. This conduct can take many forms, including price fixing, allocating markets, rigging bids or restricting output of goods and services. See more information on

what is a cartel

. The Commerce (Criminalisation of Cartels) Amendment Act 2019 came into effect in April. Now, businesses and individuals can be liable for criminal conviction and individuals convicted of engaging in cartel conduct could face a term of imprisonment of up to seven years.

Read more on Cartel Criminalisation

.

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