ACCC accuses Peters of freezing out competition in ice-cream monopoly
Australia’s competition watchdog has sued confectionary giant Peters for allegedly creating an ice cream monopoly for the sale of its frozen treats in service stations and convenience stores across the country.
The Australian Competition and Consumer Commission (ACCC) said on Friday it has instituted Federal Court proceedings against Peters, claiming the ice cream maker had engaged in anti-competitive conduct to boost sales of its single-wrapped ice creams throughout Australia.
The competition watchdog’s claims centre on a deal between Peters and major food distributor PFD over a five-year period between 2014 and 2019. Peters makes a number of popular ice cream brands including Maxibons, Drumsticks, Icypoles and Frosty Fruits.
The deal between Peters and PFD allegedly contained a condition that PFD could not supply any ice cream brands from Peters’ competitors to its service station and convenience store clients. This was despite requests from PFD to distribute other ice creams, which were knocked back by Peters, the ACCC claims.
The watchdog says that new entrants into the ice cream market could not seek out other distributors other than PFD to circumvent the alleged freeze-out as PFD was the only suitable distributor for this market.
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.
ACCC chair Rod Sims
“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,” ACCC Chair Rod Sims said.
“Our case is that the distribution agreement and Peters’ conduct effectively raised barriers of entry, which hindered or prevented potential new entry into the market to supply single serve ice cream products to petrol and convenience retailers.”
Mr Sims has also claimed that a “substantial purpose” of Peters striking the deal was to protect its market position and edge out competitors. Peters is one of just two major suppliers of single-wrapped ice-creams in Australia alongside Streets, with the two companies owning 95 per cent of the local market.
“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,” Mr Sims said.
Peters has since told the ACCC that it has struck a new deal with PFD which no longer includes the restrictive term. However, this does not constitute an admission of guilt by the company.
Peters was founded in 1907 in New South Wales by an American expatriate and grew into a major confectionery brand. Having changed hand a number of times since, it is currently owned by European food giant Froneri.
The ACCC is seeking declarations, pecuniary penalties, a compliance program order and costs.
Peters has been contacted for comment.
Dominic Powell writes about the retail industry for the Sydney Morning Herald and The Age.
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