Insider Flash: Cadbury sues Amcor for overcharging / Australia

21/12/2006 - Confectionery giant Cadbury Schweppes is suing Australian packaging company Amcor for more than A$120 million (€71.5m) over claims that Amcor overcharged for cardboard and PET plastic bottles while operating a price-fixing cartel with packaging rival Visy.

Cadbury filed a claim with the Federal Court of Australia on 15 December, seeking compensation for the alleged cartel and also alleging that the cartel extended beyond the cardboard price-fixing over which the competition regulator is currently prosecuting Visy.

Cadbury is the first major Amcor customer to take action against the packaging group, according to The Australian newspaper.

Amcor alerted Australia's competition authority to the price-fixing in late 2004 in return for immunity from prosecution but the evidence filed against Visy has left Amcor open to attack from customers seeking compensation for alleged overpayment.

Thousands of its smaller customers are taking on the packaging giant in a class action filed in April that seeks up to A$300 million in damages. But 11 major customers named by the ACCC as victims of the cartel, including Coca-Cola Amatil, Goodman Fielder, Cadbury Schweppes and Lion Nathan, had all remained silent on the matter until now, said the paper.

Cadbury alleges that Amcor overcharged it by $46 million for cardboard boxes. And although Amcor has said that the alleged price-fixing never affected its other businesses, Cadbury is also alleging that Visy and Amcor agreed not to poach each other's customers in the PET plastic bottle and aluminium can market, which led to Cadbury being overcharged at least a further $40million.

In addition, by breaching three separate contracts, Amcor had been "unjustly enriched" by a further $33.2 million from 2000 to 2004, bringing the total to around $120 million, reported the paper.

In a statement, Amcor said that the action filed by Cadbury appears "to adopt portions of the ACCC [Australian Competition and Consumer Commission] proceeding in relation to the cardboard business". These allegations "are yet to be proved in court and have been denied by Visy".

Amcor said Cadbury's allegations regarding supply contracts and additional cartel conduct in areas other than cardboard "appear to be widely speculative".

"Amcor will be vigorously defending these allegations and is considering making application to the court for a strike-out at the appropriate time. "

It said that it regretted that its valued customer had issued such proceedings and hoped that the dispute could be resolved amicably.

Source: ap-foddtechnology.com http://www.ap-foodtechnology.com/news/ng.asp?n=72986&m=2APFD21&c=nxfbrgitrbnpklu