Last week, the High Court of New Zealand ordered packaging giant Visy Board Pty Ltd (Visy) to pay a NZ$3.6 million fine for price fixing. Visy was found to have conspired to fix the prices of cardboard packages in its dealings with major international clients, including Coca-Cola, Goodman Fielder and Fonterra between 2001 and 2004. The High Court also fined former Visy senior executive, John Carroll, NZ$25,000 for his involvement in the cartel.
Prior to the hearing, and as part of a settlement, Visy admitted to entering into arrangements with its competitor, Amcor Ltd. The arrangements involved dividing certain international packaging customers between them, in breach of the price fixing provisions of the Commerce Act 1986 (NZ). Mr Carroll also admitted that he was knowingly concerned in, or a party to, Visy’s conduct. In return for the admission of liability, Visy was offered a 30% discount on any fine to be imposed by the High Court.
The decision wraps up the long running disputes between Visy and competition regulators in both Australia and New Zealand. In New Zealand, the company initially denied that the New Zealand High Court had jurisdiction to hear the action brought against it by the NZCC. As was noted in our earlier blog, the New Zealand Court of Appeal was required to determine if Visy did in fact carry on business in, and its conduct affected a market in, New Zealand. Having found this to be the case, the High Court had the appropriate jurisdiction to hear the matter brought by the NZCC.
The NZCC did not allege that any New Zealand customers actually suffered any loss as a result of the conduct, which is assumed to be the primary reason for the relatively low fine. In contrast to the NZ$3.6 million fine, the Federal Court of Australia imposed much heftier fines of A$36 million against Visy and A$500,000 against Mr Carroll (as blogged about previously here, here and here). Visy’s admission and co-operation with the NZCC during the investigation also resulted in a lower fine in accordance with the NZCC’s leniency policy.
The Chairman of the New Zealand Commerce Commission (NZCC), Dr Mark Berry, praised the decision and noted that the fine imposed will act as a deterrent for companies who might otherwise breach competition laws.
This decision and the litigation history acts as a timely reminder to companies to be aware of, and to comply with, competition laws in all jurisdictions in which they conduct business.