A manufacturing company and its director have been collectively fined more than $6 million after they were found to have engaged in collusive conduct designed to reduce competition.
Oakmoore, which trades as EGR, makes a range of building materials, auto accessories and precision engineered products. One of these is polycarbonate roofing, often used to cover pergolas and verandas.
The ACCC launched legal action against the Brisbane-headquartered business as well as several distributors of its products – Palram Australia and Ampelite Australia – in June 2016, alleging the companies had engaged in anti-competitive behaviour.
The Federal Court found that was indeed the case. It ruled that EGR had threatened the distributors that unless they purchased significant quantities of its polycarbonate, the manufacturer would supply its product directly to retailers, effectively cutting them out of the distribution chain.
By doing so, the exclusive dealing – illegal under competition laws – had the effect of substantially lessening competition in the polycarbonate market, according to the ACCC.
Stiff penalties were handed out with the judgement, with EGR fined $6 million and Mr Horwill, as the director, was fined an additional $350,000.
Additionally, both the company and Mr Horwill were ordered to pay $450,000 towards the ACCC’s costs.
Palram Australia and Ampelite Australia were fined $3.5 million and $2.1 million, respectively, earlier this year for their roles in the court-determined anti-competitive dealings.
The ACCC said the individual fine against Mr Horwill was the largest ever imposed on individual for reducing market competition.
“The penalties ordered by the court show that exclusive dealing conduct is serious illegal behaviour,” ACCC chair Rod Sims said.
“Conduct which circumvents competition when a new player enters a market may prevent lower prices and innovation. This kind of conduct is likely to cause loss or damage to customers and consumers.”
According to its website, EGR employs more than 800 people globally. While headquartered in Brisbane, the company has facilities in the US, UK, China and Thailand.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.