Court finds that Caltex, Mobil and Shell were price fixing
Published06 Oct 1999
The Auckland High Court today found that the Commerce Commission has proved its case that Caltex (NZ) Limited, Mobil Oil New Zealand Limited and Shell New Zealand Limited had acted anti-competitively and breached the Commerce Act by price fixing.
Commission Chairman John Belgrave said that the Commission is delighted with the Court's decision.
The Court will hold a hearing, at a date yet to be determined, to decide what penalties it will impose on the companies.
Mr Belgrave said that as the case is still before the Court it is sub judice and the Commission will make no further comment until after the penalty decision.
The Commission alleged that the three companies breached the Act by agreeing to remove a discount off the price of petrol at more than 50 petrol stations in Auckland. The discount was a free car wash for customers spending $20 or more on fuel.
The Commission filed its statement of claim in September 1997.
Caltex and Mobil applied unsuccessfully to the High Court to have the Commission's case struck out. In March last year Justice Sian Elias gave her decision rejecting the companies' arguments that the statement of claim did not include enough detail and that the alleged arrangement or understanding did not amount to price fixing as described in the Act.
Caltex and Mobil then appealed Justice Elias's decision to the Court of Appeal. The Court of Appeal heard the companies' appeal in September last year, and rejected it for the reasons set out in Justice Elias's decision.
The trial was held in August and September this year.
Background
Section 30 of the Commerce Act prohibits price fixing, i.e. collusion among competitors over pricing issues. It applies to arrangements about all elements of a price not just to the final retail price. It includes arrangements about " any discount, allowance, rebate or credit ".
Courts can impose penalties of up to $5 million on a company and up to $500,000 on an individual. They can also impose a wide range of orders and injunctions.
The highest penalties to date are $1.5 million imposed on each of Affco New Zealand Limited, Richmond Limited and Lowe Walker NZ Limited for their part in the North Island meat companies' collusion over pricing.
