amcor warns of fallout Amcor warns of falloutBlair SpeedyJanuary...

amcor warns of fallout Amcor warns of fallout
Blair Speedy
January 04, 2006

AMCOR has warned US investors that it could lose customers angry about its alleged involvement in a price-fixing cartel in the cardboard box industry.

This comes as alleged conspirator Visy works on its own defence to an upcoming Federal Court case brought by the competition regulator.

In a document filed with the US Securities and Exchange Commission yesterday, Amcor also warned that while the Australian Competition and Consumer Commission had granted it immunity from prosecution in return for co-operating with the investigation, the company could still face damages claims from third parties who might have been affected by the alleged cartel.

In addition, the New Zealand Commerce Commission is still investigating cartel conduct on the other side of the Tasman, where Amcor has also been granted conditional immunity.

"It is not possible at this stage to predict whether any alleged cartel conduct in Australia or New Zealand will result in third party proceedings for damages against Amcor or the loss of customers by Amcor," the company said.

At least two major law firms have canvassed alleged victims of the cardboard box cartel to mount a multi-million-dollar civil action.

"There can be no assurance that any damages which ultimately may be awarded will not be material to the results of operations or the financial condition of Amcor," it said.

The ACCC's statement of claim against Visy says corporate giants such as Foster's, Lion Nathan, Coca-Cola Amatil, Goodman Fielder and Nestle Australia were targeted by the alleged cartel.

The ACCC has alleged that Visy, its chairman and owner Richard Pratt, Visy Board chief executive Harry Debney and former Visy Board general manager Rod Carroll breached the Trade Practices Act by striking deals with Amcor.

Mr Pratt and Mr Debney deny the allegations, and Mr Carroll is yet to comment.

Neither they nor Visy have yet filed a defence to the case, which will first come before the court in a directions hearing scheduled for February 10.

Visy could try to derail the competition watchdog's price-fixing case by launching action against its key witnesses.

It is understood the company is considering targeting ACCC witnesses such as former Amcor boss Russell Jones in a private legal action, alleging they breached the Trade Practices Act.

The immunity granted to Mr Jones and other Amcor witnesses protects them only from the ACCC, not other parties.

If Visy were to launch a case, it could make a Federal Court application to add the Amcor witnesses as respondents to the ACCC's action, effectively removing the immunity.