Cadbury to begin 116m lawsuit against Amcor: reports

In a court case due to begin tomorrow (22 July) in Melbourne, Australia, the UK-based confectionery giant is to demand that Amcor repays AUS$235.8m for loss and damages that it believes it suffered as a direct result of the alleged Amcor/Visy cartel.

The case is understood to be the biggest-ever claim heard in Australia for cartel activity.

It will also be the first time that Amcor has had to publicly defend itself against the allegations of running a cartel with Visy.

Although Amcor blew the whistle on the four-year price fixing scandal, it has never publicly admitted to any breach of the Australian Trade Practices Act. In addition, in exchange for cooperation in investigations, it was granted immunity from prosecution by the Australian Competition and Consumer Commission.

However, according to a detailed report in Australian newspaper The Age, Amcor and Cadbury could yet reach an out-of-court settlement before the hearing, which is due to begin later in the week.

The hearing of the case comes more than two and a half years after Cadbury Schweppes, as the company then was, first filed documents claiming it was overcharged for PET bottles and cardboard boxes in December 2006.

Neither Amcor nor Cadbury commented on the upcoming case when contacted by Packaging News this week.

The Age claims that although it has been established that Amcor and Visy fixed prices for boxes between 2000 and 2004, this week’s case could throw light on an alleged secondary deal covering aluminium cans and PET bottles.

The paper said that Cadbury would argue that more than half of the $235.8m claim related to overpricing of cans bought from Amcor by the Schweppes drinks division. Schweppes was sold to Japanese group Asahi earlier this year.

Visy only ever supplied cold-fill PET bottles, and never cans, to Cadbury Schweppes. However, according to the newspaper, Cadbury will claim that Amcor never attempted to win Visy’s business and was therefore abiding terms of a secret agreement not to poach each other’s clients.

Cadbury is, according to the newspaper, only suing Amcor. However, Visy has become a co-respondent in the claims and will jointly defend the claim.

The case was due to be heard earlier this year, in May, but was delayed at Cadbury’s request.

At the time, the judge, Justice Michelle Gordon, said: “This case has long been delayed. There comes a point when a trial of the proceeding must commence. That time has come. In the circumstances, I will defer the commencement of the trial to 22 July 2009 to enable the parties to complete preparation.”

The start of the case comes as Cadbury faces down an industrial dispute closer to home. Trade union Unite is balloting members at three sites over what it has alleged as Cadbury reneging on a pay agreement.

It also comes as Amcor is thought to be close to completing a deal to buy a large chunk of Alcan’s packaging business, in a transaction that could be worth up to US$2.8bn. 

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