An ice cream brand has been slapped with a $12 million fine after the Federal Court found it used a distributor to stop competitors being sold in convenience stores and petrol stations.
In filings brought by the Australian Competition and Consumer Commission, Peters Ice Cream admitted that for five years after taking on PFD Food Services as a distributor, it used an exclusivity clause to block the company supplying ice creams made by other brands.
One of the conditions was the company would not distribute or sell ice creams made by companies other than Peters without getting written permission, which lasted from November 2014 to December 2019.
The Federal Court found the likely effect was that competition was substantially lessened for manufacturers of single service ice cream and frozen confectionary, the ACCC said in a statement on Friday.
"This is an important competition law case involving products enjoyed by many Australians," said ACCC Chair Gina Cass-Gottlieb on Friday.
"We took this action because we were concerned that Peters Ice Cream's conduct could reduce competition in this market and impact on the choice of single serve ice creams available to consumers.
"Peters Ice Cream admitted, that if PFD had not been restricted from distributing other manufacturers' ice cream products, it was likely that one or more potential competitors would have entered or expanded in this market."
A spokesperson from Australasian Food Group, which trades as Peters Ice Cream, said the company acknowledged the findings of the Federal Court, and had jointly proposed the $12 million penalty with the ACCC.
"While the distribution agreement with PFD did not have the purpose or actual effect of constraining competition, we accept that a likely effect of the distribution agreement was a substantial lessening of competition," the spokesperson said.
"In concluding this matter AFG acknowledges the constructive engagement with the ACCC, and has welcomed the opportunity to further strengthen its culture of regulatory compliance."
The ice cream company, a subsidiary of British company Froneri, was additionally ordered to pay part of the ACCC's legal costs.
Peters Ice Cream owns brands including Frosty Fruits, Drumstick, Maxibon and Connoisseur, and is one of two manufacturers stocked in convenience stores and petrol stations.
PFD is the largest distributor of single-serve ice creams in Australia and can reach 90 per cent of the country's post codes.
