Exclusive dealing: why blocking a competitor’s ice creams cost $12 million
You pull up at a petrol station to fill up. The kids cry out for ice cream. One wants a Creamy Classic Choc Top Salted Caramel. The other wants a Mango Lime Ripple Pure Pop. You return with ice creams in hand, but not the two they wanted. Sorry kids, all they had was the honeycomb Maxibon and a lemonade Icy Pole. Tears and unhappy kids in the back seat. You are a failure as a parent.
What the family didn’t know was that they were the victims of anti-competitive conduct involving exclusive dealing, which is a breach of competition and consumer law.
What is exclusive dealing?
Exclusive dealing occurs when one person trading with another imposes some restrictions on the other’s freedom to choose with whom, in what, or where they deal. It breaches the Competition and Consumer Act when such restrictions have the purpose, effect or likely effect of substantially lessening competition.
Peters Ice Cream found that out in March 2022, when the Federal Court ordered the Australasian Food Group, trading as Peters Ice Cream and owned by British giant Froneri, to pay a $12 million fine for anti-competitive conduct. (Please see Australian Competition and Consumer Commission v Australasian Food Group Pty Ltd  FCA 308).
The Australian Competition and Consumer Commission took Peters to court for breaching section 47 of the Competition and Consumer Act 2010, which concerns exclusive dealing.
Peters’ secret deal for petrol stations and convenience stores
Peters admitted to the court that from November 2014 to December 2019 it had a secret deal with a distributor of single serve ice creams, PFD Food Services, to distribute only Peters Ice Creams to petrol stations and convenience stores across Australia.
This meant dad couldn’t buy a Creamy Classic as it is made by Bulla, nor a Pure Pop which is made by another company. All he could get was the Maxibon and the Icy Pole, which are both made by Peters.
ACCC’s concerns with exclusive dealing
ACCC chair Gina Cass-Gottlieb said it was an important competition law case involving products enjoyed by many Australians. (Please see Peters Ice Cream to pay $12 million penalty for anti-competitive exclusive dealing.)
“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,” Ms Cass-Gottlieb said.
“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 (such as Bulla and Pure Pop) would have entered or expanded in this market.”
So, because of exclusive dealing the kids were denied their favourite ice cream, and ice cream makers were denied the right to sell their ice creams at the petrol station.
The law struck, and for Peters it was a $12 million ice cream meltdown.