BlueScope Steel boss Mark Vassella facing ACCC price-fixing allegations
BlueScope boss has been dragged into ACCC allegations the company tried to fix Australian steel markets in 2013 and 2014.
BlueScope Steel boss Mark Vassella was briefed on the company’s alleged attempts to fix the price of steel within a month of their launch, according to new court documents filed by the competition watchdog just ahead of the Christmas break.
While BlueScope vehemently denies allegations it tried to fix Australian steel markets as commodity prices tumbled in 2013 and 2014, its most senior executive — then the boss of its Australian and New Zealand operations — has now been dragged into the scandal.
The Australian Competition & Consumer Commission launched cartel proceedings against BlueScope and former sales boss Jason Ellis in August and now says Mr Vassella received an early briefing on alleged plans to try to fix prices in the local steel market, run by Mr Ellis.
Documents filed in a Federal Court civil case and released by the court on Tuesday allege the BlueScope managing director was aware of Mr Ellis’s attempts to encourage the company’s competitors to fix Australian steel prices, and received regular briefings on the scheme’s progress.
While the ACCC does not allege Mr Vassella was directly involved in formulating or carrying out the alleged price fixing scheme, court documents filed by the regulator on December 20 say Mr Vassella was briefed on the plans within a month of their launch, and given regular presentations on progress for at least the next six months.
The ACCC has accused BlueScope, Mr Ellis, and other senior sales and distribution managers of hatching a “carrot and stick” approach to maintaining BlueScope’s profits as steel markets tumbled in 2013.
From September 2013 the BlueScope executive held a series of meetings with Australian steel distributors and overseas steelmakers, offering to provide BlueScope price lists to local and foreign competitors to enable them to benchmark their own prices against BlueScope’s, the ACCC alleges, and told offshore steelmakers it would use Australia’s anti-dumping laws to seek punitive duties on imported steel if they did not raise their prices.
Mr Vassella was given a report outlining the “mechanism” underlying the scheme a month after the meetings began, according to the ACCC, which accuses the BlueScope boss of being “aware of certain aspects of the conduct” that made up the alleged cartel behaviour.
“Vassella’s awareness arose from a report dated 11 October 2013 approved by Ellis and provided to Vassella in which Ellis recorded words to the effect that he had implemented a mechanism to assist Australian steel distributors to increase their prices and improve profitability,” the ACCC says in its statement of claim.
Mr Ellis updated Mr Vassella on the benchmarking strategy in a December email, and then kept the BlueScope Australia and New Zealand boss up to date on his progress through a series of presentations over the next six months.
“On 14 February 2014, Vassella directed Ellis to inform overseas steel manufacturers that BlueScope would pursue anti-dumping measures against any overseas steel manufacturers that were pricing their flat steel products in Australia at prices that were too low,” the ACCC complaint says.
Twelve days later, Mr Ellis and several colleagues took a jet to Taiwan to meet with steel mills to offer the “carrot” of BlueScope’s price list to benchmark their own Australian prices, and the “stick” of anti-dumping complaints if they did not oblige.
In a statement, BlueScope said it would “strongly defend the proceedings”.
“BlueScope has previously conducted an internal investigation in relation to all matters covered in the ACCC’s statement of claim.
“We remain of the view that neither BlueScope, nor any of its current or former employees referred to in the ACCC’s statement of claim, engaged in cartel conduct, or attempted to engage in such conduct.
“The ACCC has not alleged that managing director and CEO Mark Vassella was involved in, or directed any employee to engage in, cartel conduct.”
If the Federal Court finds against BlueScope it could be fined a maximum of $10m for each of the 12 attempts to induce cartel conduct, or 10 per cent of its turnover.
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