ACCC Busts Cable Cartel
The companies being taken to court are Australia’s two largest manufacturers of electrical cable, Olex and Prysmian, plus L&H, Rexel and Australian Regional Wholesalers.
As well, six senior executives from these companies and the Electrical Wholesalers Association of Australia Limited (EWAA), are being taken to court.
The ACCC alleges that during 2011, Olex, Prysmian, Rexel and L&H had an arrangement which meant the supply of electrical cable by Olex and Prysmian was restricted.
The companies also fixed the price of cutting services provided by Olex and Prysmian.
This alleged conduct mainly occurred at industry association meetings. The ACCC is alleging that the EWAA aided and abetted this conduct. ACCC chairman, Rod Sims, said: “This case also serves as a warning that the ACCC will act if it suspects an industry association or any other forum is being used as an apparatus for collusion.”
Sims continued: “Identifying and prosecuting cartel conduct is a key priority for the ACCC because of the significant damage that cartels can cause to competitors and consumers by driving up prices.”
“This alleged cartel spanned most of the major players in the supply chain for electrical cable, so the potential for harm to customers such as electricians and commercial contractors, and therefore ultimately businesses and households, was considerable.”
“Indeed, the investigation of this matter was triggered by user complaints,” Sims said.
It is also alleged by the ACCC that a senior executive from each of Olex, Prysmian, Rexel, and L&H aided, abetted, counselled, procured, induced, and was knowingly concerned in the alleged conduct of their
In addition, the ACCC alleges that two senior executives from wholesaler CNW Pty Ltd attended EWAA meetings on behalf of the wholesaler buying group Gemcell, and were involved in the contraventions by the manufacturers and wholesalers.
The ACCC is seeking pecuniary penalties, declarations, and costs against the companies and individuals, as well as orders for compliance programs against the companies.
The matter has been filed in the Federal Court in Melbourne and is listed for a directions hearing on 6th February 2015 at 9.30am.
After a detailed evaluation of the circumstances and evidence, and consultation with the Commonwealth Director of Public Prosecutions, the ACCC determined that civil rather than criminal action was appropriate in this case. The ACCC had regard to a number of factors in reaching this view, including that the alleged conduct was not clandestine.
In 2009 the ACCC commenced proceedings in the Federal Court in Adelaide against Olex and Prysmian’s foreign parent companies for alleged bid rigging and price fixing relating to the supply of high-voltage or
extra high-voltage land or submarine cable, including supply to Australia. Those proceedings are continuing.
This matter is unrelated to the recent recall by eighteen retailers and wholesalers of Infinity electrical cable due to safety concerns.