ACCC takes produce suppliers to court over alleged cartel activity in supplying ALDI

The competition authority has raised the spectre of alleged cartel activity in the Australian supermarket sector after taking legal action against four suppliers and three senior executives for alleged price fixing while supplying fresh vegetables to supermarket group ALDI.

The Australian Competition and Consumer Commission (ACCC) has launched civil proceedings in the Federal Court alleging the parties had engaged in contraventions of national cartel laws.

The alleged conduct involved price fixing in the supply of fresh produce, including broccoli, cauliflower, iceberg lettuce, cucumber, Brussels sprouts and zucchini, to ALDI stores in NSW, Victoria and Queensland between 2018 and 2024.

The civil action has been levelled against Perfection Fresh Australia; Hydro Produce (Aust); Veli Velisha Fresh Produce and Velisha National Farms, as well as its director and CEO Catherine Velisha and its senior sales manager Kaushik Vora; and M. Fragapane & Sons and its general sales manager Roberto Nave.

The NSW-based Perfection Fresh Australia is the second largest fresh vegetable supplier in Australia, while Velisha National Farms is a fresh produce wholesaler and grower of a limited range of produce based in Victoria.

Veli Velisha Fresh Produce was a grower and supplier of fresh produce based in Victoria, but it ceased operations around June 2019 when its business was sold to Velisha National Farms.

M. Fragapane & Sons Pty Ltd, which trades as Fragapane Farms, is a fresh produce grower and supplier based in Victoria.

“Cartel conduct, whether by coordinating prices or agreeing on terms of bids with competitors, is anti-competitive, and is illegal,” says 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.

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

The ACCC alleges 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 alleges 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,” says Cass-Gottlieb.

The ACCC 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.