The Federal Court has dismissed proceedings brought by the Australian Competition and Consumer Commission against electrical cable manufacturers and wholesalers, and their executives for alleged cartel conduct.

The ACCC alleged that in 2011 at a meeting of the Electrical Wholesalers Association of Australia, the respondents made and gave effect to an arrangement which had the purpose of fixing prices, preventing, restricting or limiting the supply and acquisition of electrical cable, and allocating customers. In particular, the ACCC alleged this arrangement included the following provisions:

• the manufacturers would increase their cutting services fee to $85 per length cut for electrical cable and the wholesalers would not object to those fees
• the manufacturers would introduce a minimum order value (MOV) fee of $250 for orders of electrical cable less than $2,500, and the wholesalers would not object to those fees
• the wholesalers would not reduce the volume and/or value of electrical cable that they acquired from the manufacturers.

The ACCC also alleged two respondents engaged in bid rigging in response to a request for proposals from Caltex for the supply of electrical cable for an upgrade of the Kurnell Refinery in Botany Bay, NSW.

Justice Beach dismissed all allegations against:

• Australia’s two largest electrical cable manufacturers, Olex and Prysmian.
• electrical cable wholesalers, Rexel and Lawrence & Hanson
• an industry association, the Electrical Wholesalers Association of Australia (EWAA)
• a senior executive from each of Olex, Prysmian, Rexel, and Lawrence & Hanson
• two senior industry executives who attended meetings representing the wholesale buying group, Gemcell.

Justice Beach also awarded costs in favour of the respondents.

“The ACCC is carefully considering this judgment,” ACCC Chairman Rod Sims said.

“Pursuing cartel conduct, which is so detrimental to the competitive process, will always be an enforcement priority for the ACCC.”

Background

The ACCC instituted proceedings in December 2014.

The alleged conduct primarily involved low voltage electrical cables used within residential and commercial buildings in Australia.

This matter is unrelated to the recall of Infinity electrical cable due to safety concerns.

This article first appeared at www.accc.gov.au/media-release/court-dismisses-accc-cartel-proceedings-against-electrical-cable-manufacturers-and-wholesalers.