Forklift gas cartel members fined $8.3 million


Federal Court rules two companies conspired against customers of all sizes on gas cylinders

Forklift gas cartel members fined $8.3 million
There was a no-compete deal on cylinders

 

Two LPG gas suppliers and their bosses have been fined a total of $8.3 million in the Federal Court.

Renegade Gas and Speed-E-Gas were found to have engaged in cartel conduct by enacting and sticking to a no-poaching agreement for customers in the lucrative market to supply LPG cylinders used to power forklifts.

Justice Michelle Gordon says the agreement to effectively not compete for existing customers of the rival firms had an adverse effect on those businesses and may also have stunted wider economic growth in New South Wales.

The agreement was in place between 2006 and 2011 and affected both large and small warehousing businesses across the Sydney metropolitan area.

"The respondents’ [formed] a deliberate, largely covert, long standing understanding which had the potential to adversely affect a high proportion of manufacturing and distribution businesses across Sydney," Gordon said.

Renegade Gas was ordered to pay a penalty of $4.8 million.

Speed-E-Gas, which cooperated with the Australian Competition and Consumer Commission’s (ACCC’s) investigation from a very early stage, received a fine of $3.1 million.

Former Renegade Gas managing director of Paul Berman was fined $250,000 – said to be one of the largest fines ever imposed for cartel conduct – and disqualified from managing corporations for three years.

Another senior officer of Renegade Gas was fined $100,000 while a former senior officer of Speed-E-Gas was penalised $50,000.

Speed-E-Gas is a wholly owned subsidiary of Origin Energy, but the parent company was not part of the cartel conduct.

ACCC chairman Rod Sims says the fines were "very significant" relative to the size of the two companies involved.

"[They] take into account the deliberate and largely covert conduct which occurred over a substantial length of time and which involved very senior management from both companies," Sims says.

"Detecting, stopping and deterring domestic and international cartels is a priority for the ACCC as cartels not only cheat consumers and other businesses, they also restrict healthy economic growth.

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