Australasian Food Group, trading as Peters Ice Cream, has been ordered to pay a $12m penalty for anti-competitive conduct. The Federal Court made the ruling in relation to distribution agreements for ice creams sold in petrol stations and convenience stores.
The Australian Competition and Consumer Commission (ACCC) brought the action in November 2020.
Peters Ice Cream owns several ice cream brands including Connoisseur, Drumstick, Maxibon and Frosty Fruits. It is one of two major manufacturers of single serve ice cream products sold in Australian petrol stations and convenience stores.
Peters admitted that from November 2014 to December 2019, it signed a distribution deal with PFD Food Services on the proviso PFD would not sell or distribute competitors’ single serve ice cream products in various areas across Australia without Peters’ written consent.
The ice cream manufacturer admitted that the exclusivity would likely see a substantial drop in competition.
PFD is Australia’s largest distributor of single serve ice creams, reaching more than 90 per cent of Australian postcodes. The Peters’ contract restricted PFD across all of Australia except for Sydney, Melbourne, and Brisbane, the ACCC said.
Newly appointed ACCC chair Gina Cass-Gottlieb said it was an important competition law case on products enjoyed by many people.
“We took this action because we were concerned that Peters Ice Cream’s conduct could reduce competition in this market and impact on the choice of single serve ice creams available to consumers,” Cass-Gottlieb said.
“Peters Ice Cream admitted, that if PFD had not been restricted from distributing other manufacturers’ ice cream products, it was likely that one or more potential competitors would have entered or expanded in this market,” she said.
The ACCC said potential competitors to Peters during the period included Bulla, Gelativo, and Pure Pops.
PFD was approached by ice cream manufacturers to distribute new single serve ice cream products to some national petrol and convenience retailers. However, PFD advised that it could not distribute those products due to its exclusivity arrangement with Peters.
Peters Ice Cream was also ordered to establish a compliance program for a period of three years and pay a contribution to the ACCC’s legal costs. It admitted that it had contravened the Competition and Consumer Act and made joint submissions with the ACCC in respect of penalties and orders.
“This case is a reminder to all businesses of the serious and costly consequences of engaging in anti-competitive conduct,” Cass-Gottlieb said.
“The ACCC is targeting exclusive arrangements by firms with market power that impact competition as one of our compliance and enforcement priorities for 2022/23.”
