18th July, 2006: Sydney, AUSTRALIA - A $30.5 MILLION settlement in Australia's first cartel class action has put Amcor and Richard Pratt's Visy on notice over allegations they colluded to fix prices in the cardboard box industry.
The "vitamins class action" against pharmaceutical giants Roche, BASF and Aventis, was initiated in the Federal Court seven years ago by Maurice Blackburn Cashman.
The action was on behalf of thousands of small and medium-sized businesses, including makers of stockfeed and animal feed, and makers of pet food and veterinary performance-enhancing supplements.
The Federal Court yesterday began the process for approval of the settlement scheme for antitrust violations relating to vitamin sales during the 1990s. The settlement is expected to be approved at the end of next month.
Kim Parker, a principal with the law firm, said that the settlement would set a precedent for other cases, including the $200 million class action that Maurice Blackburn Cashman had launched against Amcor over alleged price-fixing.
"That cartel case is a bigger case than this one," she said. "This was Australia's first cartel class action, that's the second and hopefully there will be more to follow.
"Maurice Blackburn Cashman considers that this case, if it is approved by the court, will signal a new era by giving cartel victims an avenue to claim back the money that has been taken from them by large companies doing the wrong thing.
"We consider this case, once the settlement is approved, is ground-breaking."
Amcor filed a cross claim against Visy earlier this month seeking to bring its rival into the class action. Visy, which has indicated it will run a hardball defence against the Australian Competition and Consumer Commission's cartel allegations, has yet to respond.
In 2001, the three animal vitamin suppliers were fined a total of $26 million for price-fixing and market-sharing, following action by the ACCC.
Roche Vitamins Australia was fined $15 million, BASF Australia $7.5 million and Aventis Animal Nutrition $3.5 million.
Ms Parker said the settlement was vindication for the many businesses that had either lost market share or paid inflated prices for animal feed.
She would not indicate the scale of the overcharging until the court had approved the settlement, nor indicate the size of the biggest potential payout.
If the Federal Court approves the settlement, the winners will come across the supply chain, starting with the premix makers who sold the vitamin additive, to the stockfeed makers who sold their produce to livestock producers. But it does exclude end-users who had not purchased more than $2000 worth of vitamins.
Roche yesterday would not return calls.
But BASF said it had admitted responsibility for the antitrust violations and had put in place measures, including a compliance program and code of conduct, to ensure that it would not happen again.
"BASF is confident that there have been no repetition of these problems." It said it would place advertisements informing class members of the proposed settlement scheme and give them the opportunity to be heard when the Federal Court decides whether to approve the scheme.