ACCC takes court action against fresh produce suppliers for alleged price fixing cartel

The Australian Competition and Consumer Commission (ACCC) has commenced civil proceedings in the Federal Court of Australia against four fresh produce suppliers and three senior executives for alleged price fixing while supplying fresh vegetables to Aldi, in breach of Australia’s cartel laws.

According to a release from the ACCC, the alleged cartel conduct involved price fixing in the supply of fresh produce, including broccoli, cauliflower, iceberg lettuce, cucumber, Brussels sprouts and zucchini, to Aldi stores in New South Wales, Victoria and Queensland between 2018 and 2024.

The ACCC alleges cartel conduct by Perfection Fresh Australia and Hydro Produce (Aust). Veli Velisha Fresh Produce – which ceased operations around June 2019 when its business was sold to Velisha National Farms – and Velisha National Farms, its director and chief executive Catherine Velisha, and its senior sales manager Kaushik Vora. As well as M Fragapane & Sons – trading as Fragapane Farms – and its general sales manager Roberto Nave.

“Cartel conduct, whether by coordinating prices or agreeing on terms of bids with competitors, is anti-competitive, and is illegal,” said ACCC chair Gina Cass-Gottlieb.

“Businesses acting together instead of competing can drive up prices and harm consumers, while disadvantaging other businesses that are seeking to compete fairly.

“In this instance, we allege that price fixing conduct involving some essential household vegetables took place across three states,” Cass-Gottlieb said.

“Protecting competition in our fresh food supply chains is extremely important to drive price competition for the benefit of Australian consumers.”

The ACCC alleged that on 28 occasions, two or more of the suppliers made, or attempted to make, arrangements or understandings that had the purpose, effect or likely effect of fixing, controlling or maintaining the price of broccoli, cauliflower, iceberg lettuce, cucumber, Brussels sprouts or zucchini.

The ACCC also alleged that on 48 occasions, one or more of the suppliers then submitted prices to ALDI in accordance with these arrangements or understandings.

“The ACCC continues to prioritise investigating allegations of cartel behaviour and will bring enforcement action where appropriate,” said Cass-Gottlieb.

The ACCC said it is seeking declarations, civil penalties, compliance orders and costs against the businesses, and declarations, civil penalties, disqualification orders, non-indemnification orders and costs against the individuals.

Perfection Fresh Australia released the following statement in response to the proceedings: 

The ACCC has commenced civil proceedings against Perfection Fresh and others alleging anti-competitive conduct in relation to a small number of fresh produce that was supplied to one customer. Perfection Fresh has been working with the ACCC with a view to resolving these proceedings,” a spokesperson for the company said.

“It would not be appropriate for Perfection Fresh to provide further comment on the matter while it is before the courts. Perfection Fresh remains committed to conducting its business with integrity, transparency, and in full compliance with all applicable laws and regulations.”

Velisha National Farms said it would be defending the proceedings.

“Velisha Farms acknowledges the proceedings commenced by the  Australian Competition and Consumer Commission today (1 September). The allegations being made by the ACCC are very serious and we do not accept them. We have retained lawyers and intend on defending the proceedings,” Velisha Farms said in a statement.

“As this matter is currently before the Federal Court, it is not appropriate that we make any further comments at this stage. Velisha Farms remains focused on supplying high-quality fresh produce to all our customers including Aldi and supporting growers, partners and all employees as it has done for many years.”

According to a report from the Australian Financial Review, Sheena Vinden, a lawyer representing Hydro Produce, said the company is “cooperating with ACCC” but was not making any admissions or able to discuss the case.

Fragapane Farms has also been contacted for comment.