Eggs leader liable for attempting to induce cartel arrangements
The former director of the Australian Egg Corporation and former managing director of Farm Pride Foods, Mr Zelko Lendich, has been fined AUD $120, 000 for attempting to induce cartel arrangements within the egg industry.
The Australian Federal Court found that Lendich attempted to encourage certain Australian egg producers in early 2012 to limit egg production in hopes of driving up prices.
This case was brought forward by the Australian Competition Consumer Commission which is currently appealing a, separate, case
Lendich admitted he attempted to induce the egg producers to make a cartel arrangement in contravention of the Competition and Consumer Act 2010.
Proceedings were brought forward by the Australian Competition and Consumer Commission (ACCC) which is currently appealing a February 2016 Federal Court ruling that Australian Egg Corporation, Farm Pride Foods and Ironside Management Services did not try and establish a cartel to push up prices in November 2010 and February 2012.
The court also ruled in February that Mr James Kellaway, the managing director of AECL, and Mr Jeffrey Ironside, a director of AECL and Twelve Oaks Poultry, did not attempt to induce egg producers to engage in cartel conduct.
The ACCC says it has lodged an appeal against the February 2016 rulings and that a hearing date is yet to be scheduled.
ACCC Chairman, Rod Sims, today said both Lendich’s case and the cases against AECL and competing egg producers were brought due to concerns prices could have been increased for consumers and business if successful.
“We consider that this penalty sends a strong deterrence message to directors of industry and business associations, and business managers generally, and underscores the significant legal risks that may arise from bringing competing firms together without appropriate safeguards being in place,” Sims said.