Court Fines Sydney Businesses $8.3million for Cartel Behaviour

October, 2014

The Federal Court has handed down one of the biggest fines in Australian corporate history, totalling $8.3 million against two Sydney based forklift gas suppliers*.

On 24 October 2014, the Federal Court held that Renegade Gas and Speed-E-Gas and three senior company members engaged in cartel conduct between 2006 and 2011 finding that senior officers and sales staff had a “no-poaching” arrangement that meant they would not supply LPG to forklifts if they were already the competitor’s customer.

The Federal Court ordered Renegade Gas to pay $4.8 million, and Speed-E-Gas $3.1 million, for engaging in cartel conduct, with the latter’s fine reduced as a result of their cooperation with the ACCC.

Three individuals also involved were fined, including a former Renegade Gas managing director, who was fined $250,000 and disqualified from managing corporations for three years. A senior officer at Renegade Gas was fined $100,000 and a former senior officer of Speed-E-Gas, $50,000.

The court found the actions of the two companies were deliberate, covert, and long standing and had the potential to adversely affect a high proportion of manufacturing and distribution businesses across Sydney and reduced competition.

The Australian Competition & Consumer Commission (ACCC) instituted proceedings against Renegade Gas  and Speed-E-Gas in 2012, alleging that between 2006 and 2011, Speed-E-Gas (an Origin Energy subsidiary) and Renegade Gas agreed to not compete with each other in supplying LPG for forklifts. The two combined companies are worth approximately 75% of the market that they operate in.

 

*Australian Competition & Consumer Commission v Renegade Gas Pty Ltd (trading as Supagas NSW) [2014] FCA 1135 (24 October 2014)

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