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Exclusive dealing: why blocking a competitors ice creams cost $12 million – Trade Regulation & Practices



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You pull up at a petrol station to fill up. The kids cry out for
ice cream. One wants a Creamy Classic Choc Top Salted Caramel. The
other wants a Mango Lime Ripple Pure Pop. You return with ice
creams in hand, but not the two they wanted. Sorry kids, all they
had was the honeycomb Maxibon and a lemonade Icy Pole. Tears and
unhappy kids in the back seat. You are a failure as a parent.

What the family didn’t know was that they were the victims
of anti-competitive conduct involving exclusive dealing, which is a
breach of competition and consumer law.

What is exclusive dealing?

Exclusive dealing occurs when one person trading with another
imposes some restrictions on the other’s freedom to choose with
whom, in what, or where they deal. It breaches the Competition
and Consumer Act
when such restrictions have the purpose,
effect or likely effect of substantially lessening competition.

Peters Ice Cream found that out in March 2022, when the Federal
Court ordered the Australasian Food Group, trading as Peters Ice
Cream and owned by British giant Froneri, to pay a $12 million fine
for anti-competitive conduct. (Please see Australian Competition and Consumer Commission
v Australasian Food Group Pty Ltd
[2022] FCA 308
).

The Australian Competition and Consumer Commission took Peters
to court for breaching section 47 of the Competition and Consumer Act 2010,
which concerns exclusive dealing.

Peters’ secret deal for petrol stations and convenience
stores

Peters admitted to the court that from November 2014 to December
2019 it had a secret deal with a distributor of single serve ice
creams, PFD Food Services, to distribute only Peters Ice Creams to
petrol stations and convenience stores across Australia.

This meant dad couldn’t buy a Creamy Classic as it is made
by Bulla, nor a Pure Pop which is made by another company. All he
could get was the Maxibon and the Icy Pole, which are both made by
Peters.

ACCC’s concerns with exclusive dealing

ACCC chair Gina Cass-Gottlieb said it was an important
competition law case involving products enjoyed by many
Australians. (Please see Peters Ice Cream to pay $12 million penalty
for anti-competitive exclusive dealing
.)

“We took this action because we were concerned that Peters
Ice Cream’s conduct could reduce competition in this market and
impact on the choice of single serve ice creams available to
consumers,” Ms Cass-Gottlieb said.

“Peters Ice Cream admitted that if PFD had not been
restricted from distributing other manufacturers’ ice cream
products, it was likely that one or more potential competitors
(such as Bulla and Pure Pop) would have entered or expanded in this
market.”

So, because of exclusive dealing the kids were denied their
favourite ice cream, and ice cream makers were denied the right to
sell their ice creams at the petrol station.

The law struck, and for Peters it was a $12 million ice cream
meltdown.

Geoff Baldwin

Government investigations and
prosecutions


Stacks Champion

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Antitrust/Competition Law from Australia



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