Alkaloids of Australia’s hefty $1.98 million fine for cartel conduct
The details behind a global price fixing operation have been revealed after a Queensland farming company was caught controlling the sale of a native bush needed for popular medicines.
South Burnett
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The former manager of a fourth-generation family-owned farming business in Kingaroy has been fined for criminal cartel offences following a major investigation by the national consumer watchdog.
For five years, Christopher Kenneth Joyce, while acting as manager of medicine company Alkaloids of Australia, engaged in global price fixing to control the sale of a key ingredient of common medicines derived from the duboisia plant, native to the South Burnett.
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The company’s illicit activities came to light after an investigation by the Australian Competition and Consumer Commission.
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The investigation found that starting in July 2009, the company engaged in cartel activity for a five-year period, which included price fixing that had a worldwide impact.
Mr Joyce, the company’s former export manager, was convicted and sentenced to two years and eight months’ imprisonment to be served as an intensive corrections order, including 400 hours of community service.
Mr Joyce was disqualified from managing corporations for five years and fined $50,000.
The two parties (Mr Joyce and Alkaloids of Australia) pleaded guilty to three criminal charges of criminal cartel conduct, and admitted to a further seven offences, in respect of making, attempting to make, and giving effect to several cartel arrangements with overseas pharmaceutical ingredient suppliers that involved price fixing, bid rigging, output restriction and market allocation.
Sonie Crumpton is an Alkaloids director and chief executive of the G Crumtpon & Sons peanut empire, and comes from a well-known farming family.
G Crumpton and Sons owns Alkaloids of Australia.
From humble beginnings in 1900, the Crumpton family began their business producing peanuts.
In 1986, the company began farming duboisia.
Alkaloids of Australia produces scopolamine N-butylbromide (SNBB) which is derived from duboisia plants native to the South Burnett.
It is the active pharmaceutical ingredient used in common antispasmodic medications and motion sickness medicine.
The two strains, duboisia myoporoides and duboisia leichhardtii are both native to the South Burnett.
Burnett Inland Economic Development Organisation project officer Alan Broome said the plant grew in the region’s light red soil extremely well.
Alkaloids oversees large plantations filled with duboisia plants.
An Australian Competition and Consumer Commission spokesman said the charges brought against the company related to seven years of cartel conduct from July 2009, when criminal cartel laws came into force in Australia.
The court took into account Joyce and Alkaloids of Australia’s early guilty pleas in sentencing.
ACCC Commissioner Liza Carver said the organisation welcomed the outcomes.
“They serve as a strong reminder that criminal cartel conduct is a serious offence attracting serious consequences, including significant fines, banning orders, and imprisonment for individuals,” she said.
“This was a particularly concerning and serious case of cartel conduct by Alkaloids of Australia over a sustained period, which included price fixing that had worldwide impact.”
The court heard Mr Joyce (on behalf of Alkaloids of Australia) regularly met at industry conventions and communicated via email and phone with competing manufacturers of SNBB around the world and agreed to fix the minimum price for SNBB, to allocate customers between each other and to arrange what price would be quoted to customers to ensure a particular manufacturer won the sale.
Alkaloids of Australia was convicted and fined $1.98m.
The company and Sonie Crumpton were approached for comment.
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