Australian Competition & Consumer Commission v Australian Safeway Stores Pty Limited [2003] FCAFC 149

FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Australian

Safeway Stores Pty Limited [2003] FCAFC 149

TRADE PRACTICES – Trade Practices Act 1974 (Cth) s 46(1)(a), (c) – operator of statewide supermarket chain acquiring bread from three large bakers – bakers supplying discounted bread to some retail competitors of operator – operator stopping acquisition of that baker's bread for its supermarket in competition with the retailer – whether operator had taken advantage of its power in the wholesale market for the acquisition of bread for the purpose of damaging competitors in the retail market or of preventing each of the bread manufacturers engaging in competitive conduct – whether contravention of s 46(1)(a) or (c) of the Trade Practices Act 1974 (Cth) PRACTICE & PROCEDURE – appeal – trial conducted on the basis that a request by the supermarket operator to the baker for a discount on proprietary bread products prior to the deletion was incompatible with a proscribed purpose under s 46(1) of the Trade Practices Act 1974 (Cth) – whether Commission should be permitted to change its case on appeal TRADE PRACTICES – primary Judge finds that in some incidents the supermarket operator had a proscribed purpose in deleting the bakers' products and in others that its purpose was competitive – whether findings should stand TRADE PRACTICES – identification of market – whether the primary Judge erred in identifying the relevant market as the wholesale market for the acquisition of bread products – no close competition between wholesale and retail markets – no error of principle TRADE PRACTICES – market power – whether supermarket operators had a substantial degree of market power in the wholesale market as a purchaser of bread products – monopsony power – whether supermarket operator had taken advantage of its market power – whether conduct was materially facilitated by the existence of the power – relevance of excess capacity – relevance of barriers to entry TRADE PRACTICES – exclusive dealing – expression "to a limited extent" concerned with a condition relating to quantity of goods to be supplied – primary Judge correct in finding no contravention of ss 47(4) and 47(5) of the Trade Practices Act 1974 (Cth) TRADE PRACTICES – Trade Practices Act 1974 (Cth), ss 45(2)(a)(ii), 45A – allegation that supermarket operator had made an arrangement or reached an understanding with a baker selling bread by retail to fix or control retail prices of bread – whether arrangement or understanding had been proved – whether primary Judge applied a more rigorous standard of proof than required – whether inference should be drawn whether particular person with relevant authority within corporation had authorised entry into arrangement or understanding Trade Practices Act 1974 (Cth) ss 4E, 4F(1)(b), 45, 45A, 46, 47, 48, 75B Evidence Act 1995 (Cth), ss 59(1), 60 Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 cited Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 cited Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 3) (2001) 119 FCR 1 varied Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238 cited Australian Competition and Consumer Commission v Boral Ltd (2000) 106 FCR 328 applied Briginshaw v Briginshaw (1938) 60 CLR 336 cited Boral Besser Masonry Ltd v Australian Competition and Consumer Commission (2003) 195 ALR 609 cited Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 cited British Basic Slag Ltd's Agreement, Re [1963] 2 All ER 807 cited Coulton v Holcombe (1986) 162 CLR 1 cited Crampton v The Queen (2000) 206 CLR 161 cited Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 cited Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43 cited Ermogenous v Greek Orthodox Community of South Australia Inc (2002) 209 CLR 95 cited Fox v Percy (2003) 197 ALR 201 cited Immigration, Local Government and Ethnic Affairs, Minister for v Hamsher (1992) 35 FCR 359 cited Klor's Inc v Broadway Hale Stores Inc, 359 US 207 (1959) cited Lennard's Carrying Company Ltd v Asiatic Petroleum Company Ltd [1915] AC 705 distinguished Media Council of Australia, Re [1996] ATPR 41-497 cited Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 205 CLR 1 applied Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 cited Peacock v Human Rights and Equal Opportunity Commission [2003] FCA 50 cited Queensland Co-operative Milling Association Ltd, Re (1976) 25 FLR 169 cited Queensland Wire Industries Pty Ltd v The Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 cited Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 213 cited Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The Palitana) (1924) 20 L1 L Rep 140 cited State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (1999) 160 ALR 588 cited Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 applied Taylor v Johnson (1983) 151 CLR 422 cited Tesco Supermarkets Ltd v Nattrass [1972] AC 153 cited Top Performance Motors Pty Ltd v Ira Berk (Qld) Pty Ltd (1975) 24 FLR 286 cited Trade Practice Commission v Service Station Association Ltd (1993) 44 FCR 206 distinguished United States v Griffith, 334 US 100 (1947) cited R D Blair and J L Harrison, "Antitrust Policy and Monopsony" (1990-1991) 76 Cornell L Rev 297 M Brunt, "'Market Definition' Issues in Australian and New Zealand Trade Practices Litigation" (1990) 18 Aust Bus L Rev 86 J I H Jacob and I S Goldrein, Bullen & Leake & Jacob's Precedents of Pleading (13th ed 1990) D Robertson, "The Primacy of 'Purpose' in Competition Law – Part 1" (2001) 9 CCLJ 101 AUSTRALIAN COMPETITION & CONSUMER COMMISSION v AUSTRALIAN SAFEWAY STORES PTY LIMITED AND MARK JONES V95 of 2002 HEEREY, SACKVILLE & EMMETT JJ 30 JUNE 2003 MELBOURNE