Forklift LPG gas suppliers slapped with $8.3 million fine over cartel conduct

TWO suppliers of forklift LPG gas have been slapped with a massive $8.3 million fine by the Federal Court for engaging in cartel conduct.

Whopping $8.3m fine for gas cartel

TWO suppliers of forklift LPG gas have been slapped with a whopping $8.3 million fine by the Federal Court for engaging in cartel conduct.

The court found that Renegade Gas and Speed-E-Gas, a subsidiary of Origin Energy, through senior officers and sales staff, formed a ‘no-poaching’ agreement from at least 2006 to 2011.

This included not approaching certain customers of the other; not offering to supply forklift gas to certain customers of the other, or offering to supply only at prices they knew were unlikely to induce the customer to change suppliers; and communicating with each other for the purposes of implementing the understanding.

Together, the two companies controlled around three quarters of the $100 million market in Sydney, and the arrangement would have driven up costs at a crucial point in the supply chain, ultimately affecting consumers.

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Justice Gordon ordered Renegade Gas to pay $4.8 million and Speed-E-Gas a penalty of $3.1 million.

ACCC chairman Rod Sims said in a statement that cartels not only cheat consumers and other businesses but restrict healthy economic growth.

“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,” he said.

Three individuals involved have also been slapped with large penalties. Former managing director of Renegade Gas, Paul Berman, has been fined $250,000 and disqualified from managing corporations for three years.

A senior officer of Renegade Gas has been fined $100,000, and a former senior officer of Speed-E-Gas has been fined $50,000.

“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,” Mr Sims said.

The court action was launched in 2012 after an investigation by the Australian Competition and Consumer Commission, culminating in raids in 2011 on both companies.

It was the first major cartel case since the Amcor-Visy cardboard box case in 2007. Visy was fined $36 million and Amcor paid $96 million to settle class action claims arising from the ACCC action.

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