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Amcor and Visy pay record sum in Australian ‘cartel’ case
Australian packaging giants Amcor and Visy are to pay out a record AUS$95m (£59m) after an eleventh-hour deal to settle the cartel case that has dogged them for five years.
The payout, which was announced to Australian reporters last week at Sydney’s Federal Court, is the biggest for a cartel case in Australian history and was reached as a six-week trial was due to begin last week.
The settlement relates to a class action lawsuit first filed in April 2006 in which around 4,500 customers of the two companies were seeking to recoup overpayments made as a result of an alleged cartel between the two groups.
Amcor confirmed in a statement that it had agreed to pay damages of AUS$37.7 million and interest of AUS$25.6 million, plus a proportion of legal costs.
The suit, which was brought by Jarra Creek Central Packing Shed, alleged that between January and April 2000, Amcor and Visy entered into a cartel to fix corrugated fibreboard packaging prices and reduce competition for each other’s customers
That first arrangement then spread via secondary agreements to increase some prices each year from 2000 to 2003 for non-contract customers, it was alleged.
‘Highest payout’
Bernard Murphy, chairmn of the law firm Maurice Blackburn that has represented Jarra Creek, told reporters: “This is the highest payout for victims of price-fixing in Australia’s legal history.”
The settlement, however, still needs to be approved by a federal court judge.
Last week’s settlement adds to the AUS$36m fine handed to Visy in November 2007 after its late owner Richard Pratt and his companies admitted to 69 counts of breaching Australia’s Trade and Practices Act.
Amcor was granted immunity from prosecution in that case for cooperating with the Australian Competition and Consumer Commission in the agency’s suit against Visy and didn’t admit any wrongdoing.
The latest settlement comes 19 months after Amcor settled a claim from confectionery group Cadbury’s relating to alleged cartel activity with Visy. Cadbury had claimed camages of AUS$236m, although the actual amount paid to Cadbury’s was not made public.
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