Exclusive: Small business to take on billionaire Richard Pratt over price fixing
Monday, October 8, 2007/
Small and medium businesses are already lining up to stake their claims for compensation against packaging giant Visy, as its founder Richard Pratt declared in an interview on Saturday that his company will admit to breaking the law.
It now appears that Pratt will make the concession at the court case starting on 16 October that it joined its competitor Amcor in a cartel to jack up prices for consumers in the $2 billion cardboard box market.
Visy is reportedly set to agree to a settlement with the Australian Competition and Consumer Commission that will see it admit liability for anti-competitive conduct and pay record fines totalling $40 million.
But this could just be the beginning of the hip-pocket hurt for Visy and Amcor, with the companies’ customers, many of whom could have been paying inflated prices for years, now set to lodge compensation claims in the multi-millions.
One lawyer who has already started to put together a class action for disgruntled packaging customers is Van Moulis, a competition law specialist with McMahons National Lawyers. He would not say who his customers were.
“The most likely scenario for SMEs will be to band together for class actions, as I understand it there are one or two class actions already awaiting the outcome of the current ACCC dealings with Visy,” Moulis says.
It is difficult to put a figure on the compensation claims that could be made, Moulis says, other than to say they could be “extraordinary”.
“By its very nature the sums will be large, the cartel did keep prices up, there are large volumes involved that were sold – one client we’ve got has been dealing with Visy for 10 years. There is limitation period but at least six years compensation is possible, and there are arguments that if conduct has been fraudulent you can go back further,” Moulis says.
The news that Visy will settle with the ACCC and admit liability follows a decision by key Amcor executives earlier this year to hand over evidence on the cartel. The Federal Court must now approve any settlement deal between the ACCC and Visy.