Competition watchdog smashes forklift gas cartel

News Story
- 30 Oct 2014 ( #691 ) - Sydney, New South Wales, Australia
2 min read
LPG cylinders are used to power forklifts in a wide range of logistics operations.
LPG cylinders are used to power forklifts in a wide range of logistics operations.
Two forklift gas companies and three current and former senior officers of the two companies have been fined a total of AUD$8.3 million in the Federal Court for engaging in cartel conduct.

The court case follows an intensive investigation by the Australian Competition and Consumer Commission (ACCC) in 2011, which resulted in court proceedings being instituted in August 2012 (Forkliftaction.com News #580).

The court found that from at least 2006 until 2011, Renegade Gas Pty Ltd (trading as Supagas NSW, a privately owned company) and Speed-E-Gas (NSW) Pty Ltd (a wholly owned subsidiary of Origin Energy Limited), through their senior officers and sales staff, gave effect to a no-poaching understanding between the two companies, which included each company not supplying LPG cylinders for forklifts to each other's customers.

Justice Gordon ordered Renegade Gas to pay a penalty of AUD4.8 million and Speed-E-Gas a penalty of AUD3.1 million for engaging in cartel conduct. Speed-E-Gas co-operated with the ACCC's investigation from a very early stage, and the penalties imposed on it reflected that co-operation.

"For companies of the size of Renegade Gas and Speed-E-Gas, these are very significant penalties which 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," says ACCC chairman Rod Sims.

"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."

Justice Gordon also ordered the following penalties for three individuals involved in the cartel conduct:
* the former managing director of Renegade Gas, Paul Berman, be disqualified for three years from managing corporations and pay a pecuniary penalty of AUD250,000; and
* a senior officer of Renegade Gas to pay a penalty of AUD100,000 and a former senior officer of Speed-E-Gas to pay a penalty of AUD50,000.

"The pecuniary penalty imposed on Mr Berman is one of the largest penalties ordered against an individual for engaging in cartel conduct. This penalty, in addition to a disqualification order for three years, is a further reminder that there are serious consequences for individuals who engage in cartel conduct, particularly senior officers and managers," says Sims.

The court also ordered injunctions, compliance training for Renegade Gas and Berman, and contributions to the ACCC's costs totalling AUD600,000.
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