Small businesses that took part in the class action against packaging giants Amcor and Visy over their operation of a cartel between 2000 and 2005 will be in line for a payment of up to $21,000 after the case was officially settled.
In what is the largest settlement for a price-fixing cartel, Amcor will pay two thirds of the settlement ($63.3 million, made up of $37.7 million in damages and $25.6 million in interest) while Visy will pay a total of $31.7 million.
While the class action had originally sought damages as high as $500 million, Bernard Murphy, the chairman of lawfirm Maurice Blackburn which ran the class action, said outside the court that the settlement was “a good figure and within our expectations”.
He was also quick to point out the settlement was about three times the $36 million fine imposed on Visy by the Australian Competition and Consumer Commission.
“The settlement sends a strong message to corporate Australia: obey the law, respect corporate governance standards, or you will be forced to pay compensation.”
Many of the companies 4,500 companies involved in the class action were SME businesses, mainly in food and agribusiness sector.
Based on the total payout of $95 million, the companies could receive as much as $22,000 each, although the exact amount will depend on whether they were customers of Visy, Amcor or both.
The settlement will mean Amcor and Visy avoid having the details of their cartel rehashed in what could well have been a lengthy trial.
It should also put to an end any legal action over the cartel in which the late Visy chief Richard Pratt admitted involvement in early 2007.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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