Ice cream chain accused of sour deal

Australia’s consumer watchdog has launched legal action against Australian ice cream giant Peters over allegations the company attempted to freeze out competitors.

The Australian Competition and Consumer Commission (ACCC) announced on Friday it had started Federal Court proceedings against Australasian Food Group (AFG), which trades as Peters.

Peters, which owns well-known brands like Drumsticks, Connoisseur, Maxibon, Icy Poles, Frosty Fruits and Billabong, is accused of hindering or preventing competition for the supply of single-wrapped ice creams to petrol and convenience stores.

media_cameraPeters, the company behind well-recognised ice cream brands like Drumsticks, is accused of hindering or preventing competition for the supply of single-wrapped ice creams to petrol and convenience retailers across Australia.

The ACCC alleges Peters engaged in exclusive dealing with PFD Food Services between 2014 and 2019 to distribute its own products to the retailers, with a condition it not distribute competing products in certain locations across Australia.

Exclusive dealing is considered against the law only when it has the effect of substantially lessening competition.

“PFD was the only distributor capable of distributing single-wrapped ice cream products to national petrol and convenience retailers on a commercially viable basis,” an ACCC spokesman said.

“Unlike PFD, other potential distributors did not have a national frozen food route to these retailers.”

During the relevant period, Peters directly distributed most of its ice creams to areas in Sydney, Melbourne and Brisbane, while PFD distributed or resupplied Peters’ ice creams in the majority of other areas.

ACCC Chair Rod Sims. Picture: NCA NewsWire / Gary Ramage
media_cameraACCC Chair Rod Sims. Picture: NCA NewsWire / Gary Ramage

It is further alleged it was not commercially viable for new entrants to establish their own distribution network to sell the ice creams nationally.

ACCC Chair Rod Sims said Peters’ alleged conduct was to protect its market position as one of only two major suppliers for single-wrapped ice creams.

He said together, the companies at the time held a combined market share of more than 95 per cent.

The ACCC is seeking declarations, pecuniary penalties, a compliance program order and costs.

In a statement, AFG said it would “vigorously defend” any court proceedings.

Originally published as Ice cream chain accused of sour deal

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