The Australian Competition and Consumer Commission (ACCC) has alleged Peters Ice Cream prevented competition in the supply of single-wrapped ice creams to petrol and convenience retailers for five years, as part of its agreement with PFD Food Services.
The ACCC has called for Federal Court proceedings against Peters, which trades as Australasian Food Group. Its brands include Drumstick, Maxibon, Connoisseur, Frosty Fruits and BillaBong.
The commission alleges that between November 2014 and December 2019, the company’s distribution agreement with PFD had a condition that PFD “could not distribute any competing ice cream products in certain locations around Australia”.
ACCC chair Rod Sims said the watchdog’s case was that the distribution agreement and Peters’ conduct raised barriers of entry, hindering or preventing potential new entries into the market to supply single serve ice cream products to petrol and convenience retailers.
“We allege that, as a result of the agreement and Peters’ conduct, other ice cream suppliers had no commercially viable way of distributing their single serve ice creams to national petrol and convenience retailers,” said Sims.
“We also allege that a substantial purpose of Peters engaging in the conduct was to protect its market position from competitors, as one of only two major suppliers of single-wrapped ice creams, who together held a combined market share of over 95 per cent during the relevant time.”
“We allege that this conduct reduced competition, and may have deprived ice cream lovers of a variety of choice or the benefit of lower prices when purchasing an ice cream at one of these stores.”
The ACCC states that exclusive dealing occurs when one person trading with another “imposes some restrictions on the other’s freedom to choose with whom, in what, or where they deal”. It is against the law only when it has the purpose or effect, or likely effect, of substantially lessening competition.
Peters told the ACCC during its investigation, “without admission”, that it has recently entered into a new agreement with PFD, which no longer includes a term restricting PFD from distributing ice cream products for other ice cream producers.
The ACCC is now seeking declarations, pecuniary penalties, a compliance program order and costs.
Peters ranked in at #66 in Australia’s Top 100 Food & Drink Companies 2019 report.
