Cadbury seeks $236m from supplier Amcor

Posted by Daniel Palmer on 20th July 2009

Amcor may not have been fined by the ACCC for the much publicised collusion with Visy, but they could still receive a heavy penalty as the fallout from the cartel arrangement continues to haunt.

The packaging giant is set to face the courtroom this week to battle claims made by key customer Cadbury, with the damages case that was first filed in December 2006 to finally make it to the courtroom on Wednesday.

The UK-based confectioner is seeking damages of $235.8 million for allegedly paying higher prices for cardboard boxes, cans and PET products as a result of collusion between packaging heavyweights Visy and Amcor. The claim centres on the cartel arrangement* between the two packaging firms, which Cadbury suggests forced up the price on products they received from their primary packaging supplier – Amcor.

According to The Age, the two parties are currently discussing the prospect of an out-of-court settlement, although Amcor still refuses to admit a breach of the Trade Practices Act.

The company never publicly admitted to a role in price fixing with Visy, despite Visy agreeing to pay the heaviest cartel penalty ever in Australia.

The case could bring to light even more details about the cartel, with a number of witnesses set to appear who are yet to publicly outline their knowledge of the arrangement. Most notable of which is former Amcor Managing Director Russell Jones who was sacked in the wake of the discovery of secret tapes outlining the agreement between Amcor and Visy.

* Competition watchdog, the ACCC, discovered collusion between Amcor and Visy which spanned for almost five years, with Visy founder Richard Pratt receiving a $36 million fine for his company’s role. Amcor was not penalised after receiving ‘whistleblower protection’ from the ACCC.