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ACCC institutes on collusion allegations

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Media release 4 December 1998 Attention: Business, court writers

ACCC institutes on collusion allegations

The Australian Competition and Consumer Commission has instituted proceedings against Visy Paper Pty Ltd and the Amcor Printing Papers Group Ltd (formerly Australian Paper Ltd) in the Federal Court, Sydney, alleging collusion.

The ACCC alleges:

• a market sharing agreement existed between Visy Paper and the Amcor Printing Papers Group;and • there were attempts by Visy Paper to induce Northern Pacific Paper, a waste collection company, to enter into a market-sharing agreement.

Visy Paper and the Amcor Printing Papers Group are the principal acquirers of recyclable waste paper in Australia. The recyclable waste paper is used in their paper and packaging manufacturing operations.

The ACCC alleges that the Amcor Printing Papers Group withdrew a competitive quote to acquire recyclable waste paper from Flagstaff, a sheltered workshop in the Wollongong area, NSW, around August 1996. The quote was allegedly withdrawn pursuant to an agreement between senior executives of the Amcor Printing Papers Group and Visy Paper.

It is further alleged that over 1996 and 1997 Visy Paper attempted to enter into a market sharing agreement with Northern Pacific Paper, a Sydney waste collection company, by providing it with a number of draft agreements for negotiation. Each draft contained a 'non competition' provision which specified that Northern Pacific Paper would not collect or offer to collect recyclable waste paper from persons who were customers of Visy Paper or with whom Visy Paper had entered into discussions or negotiations to become a customer.

The ACCC is seeking orders against Visy Paper and the Amcor Printing Papers Group including declarations, injunctions, costs and orders requiring the institution of trade practices compliance programs. The ACCC is also seeking penalties against these companies and five of their senior employees. The first directions hearing for both matters will be at 9.30am on 4 February 1999.

MR 220/98 09/12/1998