A sustainable packaging company has been warned over cartel conduct after a rival reported it for proposing price fixing.
According to New Zealand’s Commerce Commission, The Better Packaging Co was warned for attempting to enter into a “customer allocation agreement” by one of the company’s directors, Rebecca Percasky, also known as Rebecca Plummer.
After a competitor approached one of Better Packaging’s customers offering cheaper pricing for sustainable packaging, Percasky contacted the supplier via email raising concerns about being undercut.
“No one wins if we get into a bidding war, aggressively go after each other’s customers and all drop our prices”, she wrote.
The commission said that Percasky’s emails went beyond “challenging any insinuations” and were likely an attempt to enter into a cartel agreement. “Ensuing emails also invited a response from the competitor and enquired about the competitor’s plans for future approaches to Better Packaging’s customers with discounted offers,” according to a statement by the commission. No such pricing agreement was entered into between Better Packaging and the competitor, however.
Despite the evidence, and the rebuke from the commission, Better Packaging and Percasky still deny they were attempting to enter into what would have been a cartel agreement.
Antonia Horrocks, the Commission’s GM of competition, said cartel conduct harms businesses trying to compete fairly and prevents consumers from accessing better quality services and prices.
“The warnings issued to Better Packaging and its director highlight the importance of avoiding discussions with competitors about pricing or customer allocation even if an actual agreement is not reached,” she said.
While competing businesses may have “legitimate reasons” to communicate with each other, such communications are not opportunities to try to reach unlawful cartel agreements with rivals.
Since April last year, individuals involved in cartel conduct can be liable to a prison term of up to seven years.
