The Australian Competition and Consumer Commission welcomes today's Full Court of the Federal Court decision partially upholding the ACCC's appeal against a decision of a single judge of the Federal Court who dismissed proceedings brought by the ACCC against Australian Safeway Stores Pty Limited, trading as Safeway, alleging price-fixing and misuse of market power and other provisions of the Trade Practices Act 1974 in the Victorian bread market.
Unanimously, the Full Court held that the ACCC had established that Safeway had engaged in price-fixing in relation to the price of bread to be sold at Tip Top Bakeries store located in Preston markets.
A majority of the Court found that on four of the nine instances pleaded against Safeway the company had misused its market power.
The allegations concerned the supply of bread by Tip Top, Buttercup and Sunicrust bakeries to retailers who discounted the price of bread. The ACCC alleged that Safeway took action against each of the bread manufacturers to induce them, or attempt to induce them, to take action to have the discounting cease.
The ACCC notes that in this judgment the Full Federal Court appears to have placed more emphasis on the actual conduct of Safeway rather than Safeway's stated policy.
It was alleged that Safeway refused to accept further supplies of bread from the bakers where the baker was supplying retailers who were discounting the price of bread. The ACCC alleged that Safeway recommenced purchasing bread from the manufacturer concerns once the discounter had ceased discounting.
The successful allegations related to bread sales by discounters in Frankston, Cheltenham, Vermont, and Albury (May 1995). The Court held that Safeway had not engaged in a misuse of market power in respect of the other five instances pleaded by the ACCC.
"This has been a tough fight on behalf of consumers", ACCC Chairman, Professor Allan Fels, said today.
"Given this judgment contains a lengthy detailed and complex analysis of the ACCC's allegation regarding misuse of market power and that the ACCC only succeeded in four of the nine instances – on a majority basis – the ACCC will need to carefully study the judgments for their future implications".