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ACCC accuses Peters Ice Cream of freezing out the competition

  • November 23 2020
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ACCC accuses Peters Ice Cream of freezing out the competition

By Cameron Micallef
November 23 2020

One of Australia’s largest ice cream suppliers has allegedly engaged in conduct which hinders or prevents competition for the supply of single-wrapped ice creams to petrol and convenience retailers.

ACCC accuses Peters Ice Cream of freezing out the competition

ACCC accuses Peters Ice Cream of freezing out the competition

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  • November 23 2020
  • Share

One of Australia’s largest ice cream suppliers has allegedly engaged in conduct which hinders or prevents competition for the supply of single-wrapped ice creams to petrol and convenience retailers.

ACCC accuses Peters Ice Cream of freezing out the competition

The Australian Competition and Consumer Commission (ACCC) has accused Australasian Food Group, which trades under Peters Ice Cream, as engaging in anti-competitive dealings to stop other companies from selling ice cream.

Peters, which is best known for brands including Drumstick, Billabong, Frosty Fruits and Maxibon, is one of two major suppliers of single-wrapped ice cream in Australia, which hold roughly 95 per cent of the market.

The competition watchdog has launched Federal Court action against Peters, alleging that between 2014 and 2019 Peters engaged in exclusive dealing by entering into an agreement with food delivery company PFD Food Services to distribute its single-wrapped ice creams across the country.

It is alleged that Peters entered into exclusive dealings which occur when one person trading with another imposes some restrictions on the other’s freedom to choose with whom, in what, or where they deal. Exclusive dealing is against the law only when it has the purpose or effect or likely effect of substantially lessening competition.

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During the term of the distribution agreement, PFD made requests to distribute competing ice cream products to petrol and convenience retailers nationally, but these requests were rejected by Peters.

The ACCC also said that it was not commercially viable for new entrants to incur the cost of establishing their own distribution network to distribute single-wrapped ice creams nationally.

“We allege that, as a result of the agreement and Peters’ conduct, other ice cream suppliers had no commercially viable way of distributing their single serve ice creams to national petrol and convenience retailers,” ACCC chair Rod Sims said.

“Our case is that the distribution agreement and Peters’ conduct effectively raised barriers of entry, which hindered or prevented potential new entry into the market to supply single serve ice cream products to petrol and convenience retailers.”

The Australasian Food Group (AFG), trading as Peters, has denied the allegations in a written statement, saying it intends to “vigorously defend” any court proceedings.

Full statement from Australasian Food Group:

AFG notes today’s announcement by the ACCC and intends to vigorously defend any proceedings. AFG has confidence in its position and the arguments that support it.

For many years, there have been an extensive number of commercially viable distribution options available for the delivery of ice cream products around Australia to petrol and convenience retailers. 

It is our position that other manufacturers have not been prevented from supplying their products to retailers by virtue of AFG’s distribution arrangements with PFD.

ACCC accuses Peters Ice Cream of freezing out the competition
ACCC accuses Peters Ice Cream of freezing out the competition
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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