ACCC Sues Vegetable Suppliers for Price-Fixing at Aldi, Impacting abc Sector Pricing

Australia's competition regulator, the Australian Competition and Consumer Commission (ACCC), has launched legal proceedings in the Federal Court against four vegetable suppliers and three executives, implicating them in a price-fixing scheme related to fresh produce sold in Aldi stores across New South Wales, Victoria, and Queensland between 2018 and 2024. The ACCC claims this alleged cartel conduct involved essential vegetables such as broccoli, cauliflower, iceberg lettuce, cucumber, Brussels sprouts, and zucchini.

The ACCC has prioritized safeguarding consumer interests and ensuring fair trading practices in the supermarket sector, with a strong emphasis on preventing misleading pricing strategies for the fiscal years 2025/2026. Gina Cass-Gottlieb, ACCC's chair, emphasized the adverse effects of businesses acting in concert rather than competing, which can elevate prices, harm consumers, and disadvantage honest competitors. She further underscored the necessity of maintaining robust competition in fresh food supply chains to secure competitive pricing for Australian consumers.

The legal action names Perfection Fresh Australia, Hydro Produce, Velisha Farms, Velisha National Farms, and M. Fragapane & Sons as the companies involved. In addition to the corporate entities, the ACCC's allegations extend to Catherine Velisha, CEO of Velisha National Farms; Kaushik Vora, senior sales manager at Velisha Farms; and Roberto Nave, general sales manager at M. Fragapane & Sons. The companies and individuals could face substantial penalties, with businesses facing fines up to $50 million and individuals potentially liable for up to $2.5 million.

Perfection Fresh Australia, the country's second-largest vegetable supplier, expressed its commitment to resolving the issue alongside the ACCC while withholding further comment due to ongoing court proceedings. Meanwhile, Velisha Farms has openly disputed the ACCC's allegations, stating their intention to challenge the proceedings legally and maintaining their stance on the seriousness of the accusations.

The allegations detail 28 occasions where two or more suppliers allegedly coordinated or attempted to coordinate efforts to control or sustain vegetable prices. Additionally, the ACCC cites 48 instances where suppliers reportedly submitted pricing to Aldi under the contested arrangement. The practices in question frequently involved agile pricing, which entails suppliers providing weekly price quotes to supermarkets, allowing for adaptable pricing strategies based on market dynamics.

Griffith University's competition and retail expert Graeme Hughes highlighted the significance of this civil action, noting its alignment with the ACCC's persistent focus on competition within the supermarket sector. Success in court could yield enhanced market transparency, potentially fostering more competitive pricing for fresh produce.

The ACCC's recent actions dovetail with the federal government's strategy to mitigate upward pressures on the household budget caused by inflated supermarket prices. The government's increased funding to the ACCC—surpassing $30 million—is aimed at tackling deceptive pricing tactics employed by supermarkets. In March, an ACCC inquiry into the supermarket sector called for increased transparency in wholesale fresh produce prices, following findings that suppliers disproportionately absorbed supply chain risks.