An ice cream brand has been fined $12 million after the Federal Court found it used a dispenser to prevent competitors from selling at convenience stores and gas stations.
In filings with the Australian Competition and Consumer Commission, Peters Ice Cream admitted that for five years after taking over PFD Food Services as a distributor, it used an exclusivity clause to prevent the company from supply ice cream made by other brands.
One of the conditions was that the company would not distribute or sell ice cream made by companies other than Peters without obtaining written permission, which lasted from November 2014 to December 2019.
The Federal Court ruled that the likely effect was that competition was significantly reduced for single-serve ice cream and frozen confectionery makers, the ACCC said in a statement Friday.
“This is an important competition law case involving products enjoyed by many Australians,” ACCC Chair Gina Cass-Gottlieb said on Friday.
“We took this action because we were concerned that Peters Ice Cream’s behavior would reduce competition in this market and impact the choice of single-serve ice creams available to consumers.
“Peters Ice Cream admitted that if PFD had not been prevented from distributing other manufacturers’ ice cream products, it was likely that one or more potential competitors would have entered or expanded in this market.”
A spokesperson for Australasian Food Group, which does business as Peters Ice Cream, said the company acknowledged the Federal Court’s findings and jointly proposed the $12 million fine with the ACCC.
“Although the distribution agreement with PFD did not have the actual purpose or effect of restricting competition, we accept that a likely effect of the distribution agreement was a substantial lessening of competition,” said the spokesperson.
“In closing this deal, AFG recognizes the constructive engagement with the ACCC and welcomed the opportunity to further strengthen its culture of regulatory compliance.”
The ice cream company, a subsidiary of the British company Froneri, was also ordered to pay part of the ACCC’s legal costs.
Peters Ice Cream owns brands such as Frosty Fruits, Drumstick, Maxibon and Connoisseur, and is one of two manufacturers stocked at convenience stores and gas stations.
PFD is the largest single-serve ice cream distributor in Australia and can reach 90% of postcodes in the country.
Australian Associated Press