Tuesday October 9, 07:31 AM
Australia's third richest man apologises for cartel agreement
By Neil Sands
SYDNEY (AFP) - Australia's third richest man, cardboard box billionaire Richard Pratt, apologised Tuesday for forming a price-fixing cartel with his main rival Amcor (Frankfurt: 854559 - news) .
Pratt sent the apology to customers of his company Visy on Monday and publicly released it Tuesday as part of a settlement with Australia's competition watchdog.
Pratt, whose personal wealth was estimated at 5.4 billion dollars (4.8 billion US) in this year's Business Review Weekly rich list, admitted Visy's dealings with Amcor had breached Australian anti-trust laws.
Pratt argued Visy -- which describes itself as the world's largest privately-owned packaging and recycling company -- had been trying to take advantage of Amcor, Visy's only major Australian competitor.
"It is now apparent to us that Visy executives erred when they had discussions with Amcor and sought to out-manoeuvre them as part of Visy's pursuit of market share gains," he said.
Details of the settlement with the Australian Competition and Consumer Commission (ACCC) have not been made public but the Australian Financial Review said Visy would be fined up to 40 million dollars, an Australian record in an anti-trust case.
Amcor executives received immunity from prosecution after they initally approached the ACCC about the cartel and agreed to fully cooperate with the regulator's action, which was launched in 2005.
Pratt said in an interview with the Weekend Australian newspaper that he was making the admission to avoid a protracted court case.
"I've had to wrestle with the choice of going to court to explain myself and try to clear my name or seeking a negotiated settlement, which will necessarily involve admissions of breaking the law," Pratt told the newspaper.
"On balance, the appropriate and pragmatic thing to do is settle."
The ACCC alleged Pratt and Amcor's then chief executive Russell Jones thrashed out details of the cartel at a secret meeting in a Melbourne hotel in 2001.
Pratt's statement to customers said: "Visy's actions were motivated by a desire to take advantage of our competitor.
"We believe that actual market outcomes demonstrate that our behaviour did not disadvantage our customers," he added.
Soft drink manufacturer Cadbury Schweppes (LSE: CBRY.L - news) launched a 120 million dollar damages claim against Amcor late last year, alleging the Amcor-Visy cartel meant it was "grossly overcharged" between 2000-2004.
The Australian Financial Review reported Tuesday that lawyers were preparing a class action on behalf of some other Amcor and Visy customers that could seek up to 300 million dollars in damages.
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