The consumer watchdog has launched proceedings in Sydney’s Federal Court against Renegade Gas and Speed-E-Gas, claiming that the companies operated an anti-competitive cartel.
The Australian Competition and Consumer Commission alleges that Renegade Gas, which trades as SupaGas NSW, and Speed-E-Gas, a subsidiary of Origin Energy, were involved in price fixing for the liquid petroleum gas which is used to power forklifts.
The watchdog claims that in the Sydney basin (which takes in greater Sydney, Wollongong and Newcastle) between 2006 and 2011 Renegade Gas and Speed-E-Gas agreed they would not approach each other’s customers and would not offer to supply forklift gas to each other’s customers.
The ACCC says the businesses agreed to only offer to supply forklift gas to each other’s customers at a price that they knew was not likely to induce the customer to change suppliers.
The ACCC says this behaviour may have resulted in Renegade Gas and Speed-E-Gas’s customers not being able to obtain a more competitive price from the other supplier and paying a higher price than they may otherwise had to pay.
It says these higher costs may have been passed on to consumers through higher prices that consumers pay for goods supplied by these businesses.
The ACCC is seeking declarations, injunctions, pecuniary penalties and costs against Renegade Gas and Speed-E-Gas along with the implementation of a trade practices compliance program by Renegade Gas.
It is also seeking declarations, injunctions, banning orders, pecuniary penalties and costs against the former senior executives of both businesses.
SmartCompany contacted Renegade Gas but no comment was available prior to publication.
The prosecutions send out a signal to the marketplace that the ACCC is cracking down on cartel behaviour by smaller businesses as well as the larger business cartels the ACCC has previously focused on.
Speed-E-Gas has a turnover of around $10 million a year, with profits of around $1 million a year.
A spokesperson for Origin told SmartCompany that the energy giant acquired Speed-E-Gas in 2006.
“The allegations relate to behaviour said to have existed prior to Origin acquiring Speed-E-Gas,” the spokesperson said.
“Once Origin became aware of the allegations it commenced an internal investigation of the Speed-E-Gas subsidiary during which time two of its employees were stood down and new management appointed.”
The spokesperson said Origin will continue to work with the ACCC in relation to the watchdog’s claims.
A directions hearing is listed for the Federal Court in Sydney on September 20, 2012.
This article first appeared at SmartCompany.