By Dewi Cooke and Leonie Wood
The largest fine in Australian corporate history has been meted out to packaging giant Visy but its chairman, Richard Pratt, has escaped a personal penalty.
The ACCC today ordered the Visy board to pay $36 million for engaging in a four-year price-fixing and cartel scheme with packaging rival Amcor, which is understood to have increased Visy's market share from 47 to 55 per cent over a number of years and affected 90 per cent of the $1.8 billion cardboard box market.
Justice Peter Heerey also ordered former executives Harry Debney and Rod Carroll to pay fines of $1.5 million and $500,000 respectively.
Justice Heerey drew attention to a public statement issued by Pratt on October 8, in which the billionaire said Visy took its obligations under competition law ''very seriously'' while also suggesting that the company's executives had not properly understood the complexities of the law.
In that same statement, which was issued before the Federal Court had formally heard of the proposed settlement, Pratt said Visy's actions were driven by its ''desire to take advantage of our competitor''.
Justice Heerey gave the statement short shrift. He said the comments appeared to be ''an attempt to revive Visy's defence which, for reasons already stated, I think to be quite without merit''.
''In any case,'' the judge said, ''the statement is hardly consistent with a frank admission of wrongdoing.''
Justice Heerey said Visy's actions were "calculated and premeditated" and the case was the "worst cartel to come before the court in the 35 years since cartel behaviour has been illegal" in Australia.
"There cannot be any doubt that Mr Pratt also knew (along with Debney and Carroll) that the cartel, to which he gave his approval, and in which he has admitted to be knowingly concerned, was seriously unlawful,'' Justice Heerey said.
"There is also the factor that the cartel was to operate for Mr Pratt's personal benefit, via his ownership, or part ownership, of Visy. This was not the case of any employee action out of some misguided sense of corporate loyalty.''
Pratt admitted to sanctioning the arrangement.
The agreement covered major contracts with companies including Nestle, Inghams, Foster's, National Foods, Gillette, Parmalat and Cadbury Schweppes.
Visy CEO Harry Debney, who was at the centre of the cartel negotiations resigned last month after admitting to multiple breaches of the Trade Practices Act and agreeing to pay a personal fine of $1.5 million.
In a memo to staff, Debney said the "disproportionate focus on Richard Pratt as chairman" had influenced his decision to resign.
The ACCC did not recommend that Pratt, a billionaire and Australia's third-richest man, pay a personal fine because as owner of Visy he will bankroll the corporate fine, and this "incorporates" a personal penalty for him.
The biggest previous fine for cartel breaches was $15 million, paid by the Australian subsidiary of Switzerland's Roche group.
Pratt wasn't at the hearing but daughter Heloise Waislitz sat in the front row and refused to answer questions as she left.