Australian Competition Law Guidelines

Private Label Manufacturers Association Australia/New Zealand (PLMA) Association) takes compliance with competition laws very seriously and is committed to ensuring that the Association and all of its representatives as well as members comply with those laws.

As some or all members of the Association are actual or potential competitors, these Guidelines are intended to assist the Association and its representatives and the members and their representatives to understand their responsibilities and obligations under the law.

These Guidelines should not be considered as legal advice. If you have any concerns in relation to competition law issues, you should seek legal advice as soon as possible.

What are the relevant laws?

Australian competition law prohibits a company making or giving effect to an agreement or understanding with a competitor to:

  • fix, control or maintain prices (including any aspect of a price, rate, discount etc.);

 

  • allocate markets (including dividing markets by geography, customer or product type);

 

  • agree the terms on which each will deal with third parties (such as suppliers); and

 

  • agree the manner in which bids for a tender are made (or withheld).

 

An agreement or understanding will breach the law even if it is verbal and informal (i.e. a ‘nod or wink’ arrangement is sufficient).

 

How does this apply to the Association?

Although the Association itself is not a competitor, it could be involved in or knowingly concerned in illegal conduct as between members. This may occur because it may instigate or be involved in meetings and discussions with members, it may provide a forum for members to exchange information or it may share information between members.

What are the consequences of a breach?

A breach of competition laws can have very serious consequences.

Individuals who knowingly engage in cartel conduct can face a maximum penalty of 10 years in jail and/or a maximum civil penalty of $500,000.

Companies can face significant monetary penalties of up to $10 million, three times the illegal benefit derived from the contravening conduct or 10% of their annual turnover. A breach can also result in other remedies such as damages and injunctions as well as expensive court processes, loss of reputation, personal stress and diversion of management time.

Guidelines

In order to minimise the risk of Private Label Manufacturers Association Australia / New Zealand or its members engaging in conduct in contravention of competition law, all members must follow these rules:


Do Not:

Do not discuss, exchange or otherwise share commercially sensitive information with a competitor about prices, promotions, rebates, costs, profit margins, trading terms, tendering, distribution methods, marketing or other strategic plans, output, capacity, new products, market shares or any other matter of competitive significance.


Do not make or give effect to any agreement with a competitor about prices, promotions, rebates, costs, profit margins, trading terms, tendering, distribution methods, marketing or other strategic plans, output, capacity, new products, market shares or any other matter of competitive significance.


Do not allocate as between you and a competitor customers, product lines or territories in which you will compete.


Do not agree with a competitor that each of you will limit or restrict products or services to certain suppliers or customers.


• Do not agree with a competitor as to how you will respond to a tender.
The Association and its representatives must not do anything to facilitate any of the above.

 

The Association and its representatives must not do anything to facilitate any of the above.


Do:


Do freely discuss issues that are not of competitive significance, such as industry safety and regulation.


• Do continue to make independent and unilateral decisions about prices, promotions, rebates, trading terms, output and all other matters of competitive significance.


• Do make and maintain clear and accurate records of all meetings.


• Do obtain independent legal advice before entering arrangements or understandings with competitors about any matter of competitive significance.

 

Meetings of the Association (involving members)

All Association meetings where more than 1 member is present will have a standing agenda item called “Competition Law Compliance Statement” before any other substantive agenda items.

In addressing this agenda item, the Chairperson will read out the following text which will be minuted: “Everyone present at today’s meeting acknowledges and understands competition law principles and will abide by them at this meeting. No-one will discuss confidential matters of competitive significance. Anything agreed between members in relation to matters of competitive significance will be subject to competition law approval. Members should refer to the Competition Law Guidelines which have been circulated to all members and obtain independent legal advice where necessary.”

 

Inappropriate discussion at an Association meeting (involving members)

If discussion takes place at an Association meeting that the Chairperson or Association representative believes is not in compliance with competition laws, he or she must take the following steps:

  • interrupt the discussion by stating that the subject matter is inappropriate and may contravene competition laws;

 

  • request that the parties terminate the discussion and move to the next subject topic;

 

  • suggest the parties (and the Association separately) obtain independent legal advice to determine whether the topic may be discussed at any future meeting; and

 

  • record the above in the minutes.

 

If the discussion continues, the Association must terminate the meeting, its representatives must leave the meeting and this should be recorded in the minutes.