Feeling Fuelish

Published On 26/08/2013 | By Pam Cue | Cartels, Enforcement

Last week, the Quebec Superior Court fined three executives CAD 15,000 each for their role in a petrol cartel.

Yves Gosselin, an employee of Irving Oil; Michel Lagrandeur, an independent dealer operating under the Shell banner; and Linda Proulx, an independent dealer operating under the Petro-Canada banner, were found guilty of conspiring to fix the price of petrol in Sherbrooke and Magog, Quebec.

Earlier that week, the Court had found Les Petroles Global (LPG) guilty for its role in the same cartel, conspiring with other fuel retailers to fix the price of petrol in Victoriaville, Sherbrooke and Magog, Quebec.

The verdicts are the latest in a long running investigation by the Canadian Competition Bureau into the cartel. The Bureau, which commenced its investigation in 2008, alleged that during the period 2004 to 2006, petrol retailers had phoned each other and agreed on the price they would charge customers for petrol in Victoriaville, Thetford Mines, Magog and Sherbrooke in Quebec.

To date, the Bureau has charged 39 individuals and 15 companies with criminal price-fixing – 33 individuals have pleaded or have been found guilty, with six being sentenced to imprisonment for terms totalling 54 months. Seven companies have pleaded guilty and over CAD 3 million in penalties have been imposed by the courts. LPG is the first company to be found guilty following a trial.

At least five cases relating to the cartel (three against individual executives and two against companies) are currently before the courts. A full list of charges and sentences imposed to date can be found here.

Potential anti-competitive conduct in the Australian petrol industry is also a current area of focus for the Australian Competition and Consumer Commission.

In July this year, ACCC chair Rod Sims, expressed concerns that petrol discounting by Coles and Woolworths may be harmful to other fuel retailers and have a negative effect on competition in the petrol industry.

In May last year, the ACCC also announced that it had commenced a formal investigation into information sharing arrangements in the petrol industry and, in particular, whether Informed Sources, a centralized information exchange for the petrol industry, was likely to raise issues under the cartel provisions or prohibitions against anti-competitive agreements.

Both investigations are ongoing. We will keep you up to date with any developments.

leshaines123 / Flickr / CC BY 2.0

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About The Author

is a solicitor in the Competition Law and Regulatory Group at King & Wood Mallesons Sydney.

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