The packaging giant rejected an estimate for damages totalling A$466m (€316m) - plus A$231m (€156.7m) in interest - made by Jarra Creek Central Packaging Shed Pty Ltd in an economist report as part of a class action against the company. The suit claims that a packaging price fixing alliance over a number of years affected those in the food, beverage and pharmaceutical industries.
The action alleges that executives from Amcor and Visy entered into a primary cartel arrangement to fix corrugated fibreboard packaging (CFP) between January and April 2000, said law firm Maurice Blackburn, acting on behalf of Jarra Creek. The lawyers said the initial cartel was expanded through “secondary agreements” to increase CFP prices each year from 2000 to 2003. The class action includes all parties who purchased and paid more than A$100,000 for CFP between 1 May 2000 and 1 May 2005.
But Amcor said it “strongly disputes” both the estimate and the “contentious facts and assumptions” on which the report was based. The company countered by saying it would continue to defend the claim in litigation and table evidence to refute the allegations.
“It is too early for Amcor to provide any reliable assessment of possible damages that may become payable if its defence is unsuccessful in whole, or in part, or of the extent to which it may obtain contribution from the Visy companies in respect of any damages awarded,” Amcor said.
Cartel fine
The class action was triggered after a case brought by the Australian Competition and Consumer Commission (ACCC) in 2005 resulted in Visy admitting to 69 breaches of the country’s Trade Practices Act. A plea deal between the ACCC and Visy saw it agree to pay a fine of A$36m – with two of its board members fined a further A$1.5m. Amcor and its former executives were granted immunity from prosecution after turning whistle-blowers in the case, said the lawyers.
Imposing the penalties in 2007, Justice Heerey said that the fines were: ” . . .reflective of the fact that this must be, by far, the most serious cartel case to come before the Court in the 30 plus years in which price fixing has been prohibited by statute.”
The action alleges that those in the food and beverage industries were among those suffering losses as a result of the cartel - including producers of fresh fruits and vegetables, meat, milk, beer and wine, as well as players from the pharmaceutical sector.