Tuesday October 16, 05:28 AM
Australia's third richest man facing record cartel fine
MELBOURNE (AFP) - Australia's competition watchdog on Tuesday recommended a company headed by the country's third richest man, cardboard box billionaire Richard Pratt, pay a record fine for participating in a cartel.
The Australian Competition and Consumer Commission (ACCC) called for Pratt's company Visy to pay a 36 million dollar (32.4 million US) fine for breaching anti-trust laws through a secret price-fixing deal struck with rival Amcor (Frankfurt: 854559 - news) .
The previous Australian record fine for cartel behaviour was 15 million dollars.
ACCC lawyer Peter Jopling told the Federal Court that the deal between the two major players in Australia's packaging industry had been "very carefully and deliberately concealed".
Pratt, whose personal wealth was estimated at 5.4 billion dollars in this year's Business Review Weekly rich list, admitted earlier this month that Visy's deal with Amcor breached Australian anti-trust laws.
The billionaire said he had agreed to the admission to avoid a drawn-out court case involving Visy, which describes itself as the world's largest privately-owned packaging and recycling company.
The ACCC alleges 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.
Amcor executives received immunity from prosecution after they initially approached the ACCC about the cartel and agreed to fully cooperate with the regulator's action, which was launched in 2005.
Under the terms of the deal, Visy and Amcor agreed not to try to poach the other's customers in order to maintain their duopoly and to discourage any other rivals gaining a foothold in the Australian market.
Pratt read from a prepared statement outside Tuesday's court hearing.
"I sincerely regret what's happened and I accept ultimate responsibility," he said, refusing to make any further comment.
The court adjourned its decision on Visy's punishment to a date yet to be fixed.
Soft drink manufacturer Cadbury Schweppes (LSE: CBRY.L - news) launched a separate 120 million dollar damages claim against Amcor late last year, alleging the Amcor-Visy cartel meant it was "grossly overcharged" between 2000 and 2004.
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