FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 4) [2017] FCA 1590 File number: NSD 2510 of 2013 Judge: WIGNEY J Date of judgment: 22 December 2017 Catchwords: TRADE PRACTICES – competition law – restrictive trade practices – cartel conduct – whether Respondent contravened ss 44ZZRK or 45(2) of the Trade Practices Act 1974 (Cth) – where Respondent and two other manufacturers and wholesale suppliers of laundry detergent in Australia transitioned to ultra concentrated laundry detergent and ceased supplying retailers with standard concentrates at about the same time – whether Respondent entered into an arrangement, or arrived at an understanding, with the other suppliers, in relation to the transition that included exclusionary provisions, or provisions that had the purpose, or had or were likely to have, the effect of substantially lessening competition in the market for laundry detergent in Australia – parallel conduct – exclusionary provisions – Jones v Dunkel inferences Held: applicant did not discharge its burden of proving on the balance of probabilities that the respondent entered into any such arrangement or arrived at any such understanding Legislation: Trade Practices Act 1974 (Cth) (repealed) ss 4D, 4E, 4F, 44ZZRD, 44ZZRK, 45(2), 45(3), 76 Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Cth) Evidence Act 1995 (Cth) ss 140, 191 Cases cited: ACCC v Universal Music Australia Pty Ltd (2001) 115 FCR 442 Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission (2005) 159 FCR 452; [2005] FCAFC 161 ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 Australian Competition and Consumer Commission v Air New Zealand Limited [2014] FCA 1157; (2014) 319 ALR 388 Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (2003) 198 ALR 657 Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (No 8) (1999) 92 FCR 375; [1999] FCA 954 Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2004] FCA 1678; (2004) 141 FCR 183 Australian Competition and Consumer Commission v Leahy Petroleum Ltd [2007] FCA 794; 160 FCR 321 Australian Competition and Consumer Commission v Pfizer Australia Pty Ltd [2015] FCA 113; 323 ALR 429 Australian Competition and Consumer Commission v Yazaki Corporation (No 2) [2015] FCA 1304 Australian Securities & Investments Commission v Australian Lending Centre Pty Ltd (No 3) (2012) 287 ALR 693 Australian Securities and Investments Commission v Hellicar & Ors (2012) 247 CLR 345 Brandi v Mingot (1976) 12 ALR 551 Briginshaw v Briginshaw (1938) 60 CLR 336 British Basic Slag Ltd v Registrar of Restrictive Trading Agreements [1963] 1 WLR 727; 2 All ER 807 Claremont Petroleum NL v Cummings (1992) 110 ALR 239 Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 44 ALR 173 Eastern Express Pty Ltd v General Newspapers Pty Ltd (1991) 30 FCR 385 Jones v Dunkel (1959) 101 CLR 298 L Grollo & Company Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 News Limited v Australian Rugby Football League Limited (1996) 64 FRC 410 News Limited v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 Norcast v Bradken (No 2) (2013) 219 FCR 14 Rural Press Limited v Australian Competition and Consumer Commission (2003) 216 CLR 53 Rural Press Limited v Australian Competition and Consumer Commission (2002) 118 FCR 236 Stationers Supply Pty Ltd v Victorian Authorised Newsagents Ltd (1993) 44 FCR 35 Stirling Harbour Services Pty Ltd v Bunbury Port Authority [2000] ATPR 41-783 Top Performance Motors Pty Ltd v Ira Berk (Qld) Pty Ltd (1975) 24 FLR 286 Trade Practices Commission v David Jones (Aust) Pty Ltd (1986) 13 FCR 446 Trade Practices Commission v Email Ltd (1980) 43 FLR 383 Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 Dates of hearing: 7-10 June, 14-17 June, 20-23 June and 5-6 July 2016 Date of last submissions: 1 August 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Economic Regulator, Competition and Access Category: Catchwords Number of paragraphs: 678 Counsel for the Applicant: Mr C M Scerri QC with DR R C A Higgins and Mr I J M Ahmed Solicitor for the Applicant: Norton Rose Fulbright Counsel for the Second Respondent: Mr M R Scott QC with Mr A D Barraclough Solicitor for the Second Respondent: Allens ORDERS NSD 2510 of 2013 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: PZ CUSSONS AUSTRALIA PTY LTD (ACN 004 164 827) Second Respondent JUDGE: WIGNEY J DATE OF ORDER: 22 DECEMBER 2017 THE COURT ORDERS THAT: 1. The applicant's originating application filed 12 December 2013 be dismissed insofar as it seeks relief against or concerning the second respondent, PZ Cussons Australia Pty Ltd, or has not otherwise previously been disposed of by order of the Court. 2. The applicant pay the second respondent's costs. 3. Pursuant to r 1.39 of the Federal Court Rules 2011 (Cth) (Rules), the time within which the applicant must file and serve any notice of appeal pursuant to rr 36.02 and 36.03 of the Rules is to commence to run from 29 January 2018. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COMMISSION'S PLEADED CASE IN SUMMARY [6] STATUTORY SCHEME [33] RELEVANT PRINCIPLES [45] Arrangement or understanding [46] Purpose [55] Substantial lessening of competition [60] Burden of and standard of proof [68] EVIDENCE AND FACTS [73] The Australian laundry detergent market [87] The genesis of the transition to ultra concentrates in the Australian market [100] The perceived risks and rewards of transitioning to ultra concentrates [107] Woolworths and Coles planning and review processes and timing [121] January 2008 meetings and communications [127] 8 January 2008 meeting between Colgate and Woolworths [128] 18 January 2008 meeting between Cussons and Coles [135] Colgate's Accord proposal [137] 10 March 2008 meeting between Colgate and Accord [138] 18 April 2008 email from Accord to Colgate, Cussons, Unilever and others [145] Cussons' initial reaction to the Accord proposal [148] Unilever's initial reaction to the Accord proposal [156] 30 April 2008 meeting of Accord attended by Colgate, Cussons, Unilever and others [158] Woolworths' visit to Unilever's Centre of Excellence in the United States [169] May 2008 meetings and communications [172] 15 May 2008 meeting between Colgate and Woolworths [173] May 2008 internal Colgate meetings [174] 22 and 29 May 2008 meeting between Unilever and Woolworths [175] June 2008 meetings and communications [178] Unilever "Fabric Summit" on 4 and 5 June 2008 [179] 13 June 2008 meeting of Cussons and Woolworths [181] Cussons' ultra concentrate workshop on 16 June 2008 [183] Colgate management committee meeting 16 June 2008 [189] Meeting between Cussons and Coles on 23 June 2008 [193] July 2008 meetings and communications [195] 4 July 2008 telephone conversations between Mr Ansell (Colgate) and Mr Campbell (Unilever) [196] 7 July 2008 internal Unilever email from Mr Campbell [199] Colgate July 2008 internal emails [201] Cussons' July 2008 internal emails concerning "timelines" [203] 23 July 2008 email from Accord to Colgate, Cussons and Unilever [210] 24 July 2008 email from Cussons to Accord, Colgate and Unilever [212] Cussons' Project Mastermind NPD Business Case – 28 July 2008 [216] 30 July 2008 meeting of Unilever and Woolworths [220] 31 July 2008 meeting between Colgate and Woolworths [229] August 2008 meetings and communications [230] 1 August 2008 - Woolworths "update" provided to Cussons [231] Cussons and Coles ultra concentrate "workshop" on 5 August 2008 [232] Telephone calls by Mr Campbell (Unilever) to Mr Ansell (Colgate) on 7 August 2008 [234] Meetings between Colgate and Woolworths on 8 and 11 August 2008 [235] 11 August 2008 telephone call by Mr Ansell (Colgate) to Mr Campbell (Unilever) [238] 11 August 2008 email from Mr Fuchs of Woolworths to "all vendors" [239] Meeting between Unilever and Woolworths on 12 August 2008 [246] 12 August 2008 email from Mr Fuchs of Woolworths [248] Meeting between Unilever and Coles on 12 August 2008 [250] 12 August 2008 internal Cussons emails [251] August 2008 communications between Unilever and Woolworths [254] August 2008 communications between Colgate and Woolworths [263] 19 August 2008 – Mr Basha (Unilever) calls Ms Gill (Cussons) [271] 21 August 2008 - Mr Campbell (Unilever) calls Mr Courtier (Cussons) [274] 21 August 2008 Cussons' board meeting [277] 25 August 2008 meeting between Cussons and Woolworths [298] The revised Accord proposal [302] Cussons' legal advice concerning the revised Accord proposal [303] 25 August 2008 meeting of Accord to discuss the revised proposal [306] 28 August 2008 internal Unilever email [316] 29 August 2008 internal Colgate email [318] September 2008 meetings and communications [319] 5 September 2008 meeting between Unilever and Woolworths [320] 8 September 2008 Cussons' meeting of Project Mastermind steering committee [321] Unilever "stress test" workshop – 9 September 2008 [323] Cussons' guidelines to Project Mastermind employees [327] 23 September 2009 meeting between Cussons and Woolworths [330] 29 September 2008 meeting between representatives of Accord and the ACCC [332] October 2008 meetings and communications [333] Cussons' Project Mastermind Steering Committee meetings 6 and 13 October 2008 [334] Meeting between Cussons and Woolworths on 7 October 2008 [336] Unilever communications [337] 10 October 2008 meeting of Accord, Colgate, Cussons and Unilever [341] Mr Fatouros (Cussons) calls Mr Christopher Pedersen (Colgate) [343] 21 October 2008 – Cussons' "war gaming" session [347] 31 October 2008 Woolworths' (Mr Fuchs') emails [351] November 2008 meetings and communications [352] Coles' and Woolworths' communications [353] Cussons' further war gaming session – 11 November 2008 [356] 24 November Woolworths' email to Colgate, Cussons and Unilever [357] Cussons' board approves NPD2 [358] December 2008 meetings and communications [360] Cussons [361] Unilever [362] Woolworths' December 2008 communications to the Suppliers [364] January and February 2009 meetings and communications [368] Woolworths' communications [369] The transition [372] Unilever and Woolworths' video in late 2009 [379] EXPERT EVIDENCE [381] Opinions about what would have occurred in the absence of coordinated action [383] Opinions concerning the effect of the Aligned Transition Arrangement [409] ISSUES FOR DETERMINATION [415] The Withhold Supply Arrangement issues [416] The Aligned Transition Arrangement [417] Other issues [418] The Withhold Supply Arrangement issues [421] Issues 1 and 2: did Cussons enter into an arrangement or understanding with Colgate and Unilever which included the Withhold Supply Provisions? [422] The circumstantial nature of the Commission's case [427] When, by whom and how was the Withhold Supply Arrangement entered into? [439] The Unilever witnesses [452] Colgate and Woolworths [465] The relevance and significance of the Accord proposal and discussions [467] Direct communications between Cussons and the other Suppliers [483] Communications between Cussons and Woolworths [485] Communications between Cussons and Coles [499] Communications between Cussons and Woolworths in late 2008 and early 2009 [502] "Hub and spoke" and vertical and horizontal arrangements [507] Cussons' witnesses [538] Mr Davey [539] Mr Cunningham [550] Mr Wilson [560] Mr Freene [563] Other Cussons witnesses [569] Jones v Dunkel inferences [570] Parallel conduct, economic irrationality and motive [588] The Withhold Supply Provisions [600] The first of the alleged Withhold Supply Provisions – prevent etc. supply of ultra concentrates until March 2009 [602] The second of the alleged Withhold Supply Provisions – prevent etc. supply of non-uniform ultra concentrates from March 2009 [607] The third of the alleged Withhold Supply Provisions – prevent etc. the supply of standard concentrates after March 2009 [620] Conclusion in relation to the alleged Withhold Supply Provisions [633] Conclusion in relation to issues 1 and 2 of the Withhold Supply Arrangement issues [634] Issues 3, 4 & 5 – were the Withhold Supply Provisions exclusionary provisions? [635] Issue 6 – giving effect to the Withhold Supply Arrangement [637] Issues 7 & 8 – contraventions [638] THE ALIGNED TRANSITION ARRANGEMENT ISSUES [639] Issues 1 & 2: did Cussons enter into an arrangement or understanding with Colgate and Unilever which included the Aligned Transition Provisions? [640] Issues 3 & 5: purpose of the Aligned Transition Arrangement and Provisions [646] Issue 4: the effect of the Aligned Transition Provisions [652] Issue 6: giving effect to the Aligned Transition Arrangement [675] Issues 7 & 8: contravention of s 45(2)(a)(ii), s 45(2)(b) and s 44ZZRK of the Act [676] CONCLUSION AND DISPOSITION [677] WIGNEY J: 1 In March 2009, there was a significant change in the market for laundry detergents in Australia. The three largest manufacturers and wholesale suppliers of laundry detergents in Australia, Colgate-Palmolive Pty Ltd, PZ Cussons Australia Pty Ltd and Unilever Australia Limited, each launched new formulations of their existing laundry powder brands which were twice the concentration of the existing standard concentration formulations. Each of those three Suppliers began supplying the new "ultra concentrated" formulations of their branded laundry powders to their main customers, including the major retailers Woolworths Limited and Coles Group Pty Ltd, and the major wholesaler Metcash Limited. The Suppliers also effectively ceased supplying their standard concentration detergents to Woolworths, Coles and Metcash, though they continued to supply some of those products to some independent and variety stores. 2 The Australian Competition and Consumer Commission alleged that the largely simultaneous and almost uniform transition from standard to ultra concentrated laundry detergents by the Suppliers in March 2009 was far from coincidental. It contended that the simultaneous transition was the result of an anti-competitive arrangement or understanding between the Suppliers, aided and abetted by Woolworths and an officer of Colgate. The alleged arrangement or understanding was said to be anti-competitive because it involved, in broad terms, the restriction of supply of each of the Supplier's ultra concentrated detergents before March 2009, and the restriction of supply of standard concentration products thereafter. 3 The Commission commenced proceedings against Colgate, Cussons, Woolworths and Mr Paul Ansell, who was the Sales Director at Colgate. The Commission alleged that Colgate and Cussons contravened ss 45(2)(a)(i) and (ii), 45(2)(b)(i) and (ii) and 44ZZRK of the Trade Practices Act 1974 (Cth) (the Act) (now the Competition and Consumer Act 2010 (Cth)) and that Mr Ansell and Woolworths were knowingly concerned in or a party to those contraventions. Proceedings were not commenced against Unilever, apparently because it was an immunity applicant. As events transpired, the Commission reached settlements with Colgate, Mr Ansell and Woolworths. Accordingly, only Cussons defended the proceedings. 4 The central and critical issue for resolution in the proceedings is whether Cussons was a party to any anti-competitive arrangement or understanding with Colgate and Unilever in relation to the transition to ultra concentrates. 5 There could be little doubt that Cussons' transition to the supply of ultra concentrated laundry powders to its major customers occurred largely in parallel with similar transitions by Colgate and Unilever. It would also appear that, by late 2008, Cussons was proceeding on the basis that Colgate and Unilever were, or were likely to, transition at the same time and in the same manner as it was. The central question, however, is whether that parallel conduct was the product of a collusive arrangement or understanding between Cussons and its competitors. Was there a meeting of the minds between Cussons and the other two Suppliers, such that Cussons assumed obligations, or gave or received assurances or undertakings vis-à-vis the other Suppliers, concerning the simultaneous transition? Or were Cussons' actions in transitioning at the same time and in the same manner as Colgate and Unilever the product of independent strategic and commercial decisions made by it, albeit decisions influenced or conditioned by information and expectations about what its competitors were likely to do, and by the preferences or dictates of its major customers, Woolworths and Coles? THE COMMISSION'S PLEADED CASE IN SUMMARY 6 Colgate, Cussons and Unilever competed in the Australian market for the wholesale supply of powdered and liquid laundry detergent products for domestic use. 7 From about early 2008, each of Colgate, Cussons and Unilever was separately considering the possible transition to ultra concentrated laundry detergents in the Australian market. Each of them considered that the transition to ultra concentrates would generate benefits, including significant cost savings and gross margin improvements as a consequence of reduced expenditure on ingredients, packaging, transport and other logistics. It was also considered that retailers, consumers and the environment would benefit from the transition. The transition had already occurred in Europe and in the United States. 8 The Commission alleged, however, that at some stage in 2008 or 2009, Colgate, Cussons and Unilever each came to the view that the transition would be unlikely to achieve the expected benefits unless they made the transition simultaneously. In simple terms, that was said to be because, if one or more of the Suppliers continued to supply some standard concentrates, consumers would be unlikely to see the value or benefit in the ultra concentrates and would continue to buy the standard concentrates. They would think that standard concentrates were better value because they were in bigger boxes but cost about the same. Manufacturers who held back transitioning all their brands to ultra concentrates might capitalise on this consumer confusion and thereby increase sales and market share. 9 That realisation, on the Commission's case, led each of Colgate, Cussons and Unilever to consider that the success, and consequential benefits, of the transition to ultra concentrates would be optimised if six things occurred: first, each of them effected a full category transition simultaneously; second, that "initiative" was led by an industry association or major retailer; third, each of them simultaneously withdrew the supply of standard concentrates; fourth, the withdrawal occurred simultaneously with the introduction of ultra concentrates; fifth, the ultra concentrates manufactured and sold by each of them were as uniform as possible in terms of the degree of concentration, packaging and product claims; and sixth, there was an agreed transition date. 10 In that context, the Commission alleged that in the period between 18 April 2008 and 31 January 2009, Colgate, Cussons and Unilever made or arrived at two arrangements or understandings concerning the transition. The first is referred to in the Commission's Amended Statement of Claim (ASOC) as the Withhold Supply Arrangement. The second is referred to as the Aligned Transition Arrangement. As will be seen, the two arrangements or understandings are really just alternative formulations of the one alleged arrangement or understanding. 11 The Commission's pleaded case (ASOC [57]) was that the Withhold Supply Arrangement contained provisions, the Withhold Supply Provisions, which were to the effect that Colgate, Cussons and Unilever would prevent, restrict or limit the supply of laundry detergent to Woolworths, Coles and Metcash in three respects. First, the supply of ultra concentrates would be restricted until a particular date, originally scheduled to be January 2009 but changed, before that date, to March 2009. Second, the supply of ultra concentrates other than those which met certain parameters (including in relation to concentration level and pack communication), would be restricted, again originally from January 2009, but then March 2009. Third, the supply of standard concentrates would be restricted from a particular date. That date was again originally January 2009, but changed, before that date, to March 2009. 12 The Commission alleged (ASOC [58]) that a substantial purpose of the Withhold Supply Provisions was to prevent, restrict or limit the supply of laundry detergent to Woolworths, Coles and Metcash, by Colgate, Cussons and Unilever. In simple terms, the purpose was to ensure that the new ultra concentrates would not be supplied before March 2009 (originally January 2009), and that the old standard concentrates, as well as ultra concentrates that did not meet certain specified parameters concerning concentration level, pack size and pack communication, would not be supplied after March 2009 (again originally January 2009). In those circumstances, it was contended that the Withhold Supply Provisions were exclusionary provisions within the meaning of s 4D of the Act (ASOC [59]) and satisfied the "purpose condition" in s 44ZZRD(3) of the Act (ASOC [60]). They were therefore "cartel provisions" for the purposes of s 44ZZRK of the Act (ASOC [61]). 13 The Aligned Transition Arrangement was alleged to contain similar, but slightly different provisions; the Aligned Transition Provisions. As already noted, the Aligned Transition Provisions were, in reality, simply a different or alternative formulation of the Withhold Supply Provisions. The Commission did not contend that there were two separate and distinct arrangements or understandings. The Withhold Supply Provisions were pleaded in such a way that they were likely to constitute an exclusionary provision as defined in s 4D of the Act, and therefore the Commission would not need to prove that the provisions had the purpose, or had or was likely to have the effect of, substantially lessening competition. The alternative formulation of the provisions, the Aligned Transition Provisions, would only give rise to a contravention if the Commission was able to prove that the provisions had that purpose or effect. 14 The Aligned Transition Provisions (ASOC [64]) were alleged to be that Colgate, Cussons and Unilever would, from a particular date, which was again originally January 2009, but then changed to March 2009, do three things: first, cease to supply standard concentrates to Woolworths, Coles and Metcash; second, simultaneously move to supply ultra concentrates to Woolworths, Coles and Metcash; and third, supply only ultra concentrates that met certain prescribed parameters in relation to concentration level, pack size and pack communication to Woolworths, Coles and Metcash. It was alleged that the Aligned Transition Provisions had a substantial purpose, or the effect or likely effect, of substantially lessening competition in the laundry detergent market for the purposes of s 45(2) of the Act (ASOC [65]), and the purpose of preventing, restricting or limiting the production or likely production of laundry detergent products for the purposes of s 44ZZRD(3)(a)(i) of the Act (ASOC [66]). They were therefore "cartel provisions" for the purposes of s 44ZZRK of the Act (ASOC [67]). 15 The Commission contended that, by making the arrangement, or arriving at the understanding, that contained the Withhold Supply Provisions, or the Aligned Transition Provisions, Cussons contravened s 45(2)(a)(i) of the Act (in the case of the Withhold Supply Provisions) (ASOC [114]) and s 45(2)(a)(ii) of the Act (in the case of the Aligned Transition Provisions) (ASOC [116]). 16 In the case of the Withhold Supply Provisions, as noted earlier, the Commission contended that such provisions would constitute exclusionary provisions as defined in s 4D of the Act. An arrangement containing such provisions would accordingly give rise to a per se contravention. The Commission did not contend, however, that the Aligned Transition Provisions were exclusionary provisions. Rather, it alleged that those provisions had a substantial purpose, or the effect or likely effect, of substantially lessening competition in the laundry detergent market (ASOC [65]). In short terms, the Commission alleged that, but for the Aligned Transition Provisions, one or more of the Suppliers would have continued to supply standard concentrates, that would have led to price competition between standard concentrates and ultra concentrates, and that in turn would have led to reductions in the price of the ultra concentrates. It also alleged that one or more of the Suppliers would have supplied laundry detergent with a variety of levels of concentration, with a variety of package sizes and with a variety of appearances. 17 The Commission also alleged that, from January 2009 until 31 December 2009, Colgate, Cussons and Unilever gave effect to the Withhold Supply Provisions and the Aligned Transition Provisions (ASOC [62] and [68]). The Commission's case in that regard was that on 2 March 2009, each of Colgate, Cussons and Unilever introduced ultra concentrates across each of their brands, and withdrew all of their previous standard concentrates from supply, save in respect of the "sell-down" of certain products (ASOC [48(a), (c)]). The ultra concentrates supplied by each of the Suppliers had two times (2x) the level of concentration of the previous standard concentrates; were priced in parity with the previous standard concentrates; and were marketed in similar packaging (ASOC [48(b), (d), (e)]). In giving effect to the Withhold Supply Provisions and the Aligned Transition Provisions, Cussons was alleged to have contravened s 45(2)(b)(i) or (ii) of the Act, respectively, and, from 24 July 2009 onwards, s 44ZZRK of the Act (ASOC [115] and [117]). 18 It should be noted that the Commission ultimately did not press the parity pricing allegations. 19 Needless to say, Cussons denied that it made any arrangement, or arrived at any understanding, with Colgate or Unilever that contained either the Withhold Supply Provisions or the Aligned Transition Provisions. Equally, it denied giving effect to any arrangement or understanding containing those provisions. 20 Before embarking on a detailed consideration of the facts and evidence, it may be useful to note some features of the Commission's pleaded case concerning the alleged arrangements or understandings. The particulars that the Commission supplied in relation to the making of the Withhold Supply Arrangement and the Aligned Transition Arrangement were effectively identical. Following are the important points. 21 First, the Commission did not, no doubt because it could not, plead or particularise exactly when the alleged arrangements were made, or the understandings arrived at. The best the Commission could do was to contend that the arrangements were made, or the understandings were arrived at, some time between 18 April 2008 and 31 January 2009. 22 Second, the Commission did not, no doubt again because it could not, plead that certain specific officers or employees were responsible for causing Cussons to enter into the alleged arrangements, or arrive at the alleged understandings. A corporation can only relevantly act, or have a state of mind, through its officers or employees. Yet the Commission was unable to say, at least in its pleaded case, who the relevant officers or employees of Cussons were. Indeed, it did not specify who the relevant officers or employees of Colgate or Unilever were either, save for Mr Ansell in Colgate's case. That was particularly unusual in the case of Unilever, since Unilever was an immunity applicant and its officers and employees gave evidence in the Commission's case. 23 Third, the Commission's case concerning Cussons' entry into the arrangement, or its arrival at the understanding, was essentially circumstantial. It relied on inferences that it contended could and should be drawn from a series or pattern of meetings and other communications which occurred between 18 April 2008 and 31 January 2009. Most of those meetings and communications did not involve each of the Suppliers directly meeting or communicating with each other. They mostly involved meetings or communications between one or other of the Suppliers and Woolworths. Cussons was not directly involved in many of the meetings and communications relied on by the Commission. 24 There was no real dispute that most of the meetings and communications relied on by the Commission occurred. There was also, for the most part, very little dispute about what was said at the meetings or otherwise communicated between the Suppliers, Accord and Woolworths. Almost all of the meetings and communications were documented in some way. The main issue is what can and should be inferred from the pattern of meetings and communications, considered in the context of what in due course occurred in March 2009. 25 It is useful to briefly identify the specific meetings and communications that the Commission contended gave rise to, or resulted in, or somehow evidenced, the alleged arrangements or understandings. The content of the meetings and communications will be considered in detail later. The relevant meetings and communications were: A meeting on 8 January 2008 between representatives of Colgate and Woolworths (ASOC [13], [14]). A meeting held on 10 March 2008 between representatives of Colgate and Accord Australasia Limited (ASOC [15], [16]). Accord was the national industry association for the Australasian hygiene, cosmetic and speciality products industry. An email from Accord to Colgate, Cussons, Unilever and others sent on 18 April 2008 (ASOC [17]). A meeting held on 30 April 2008 between representatives of Accord, Colgate, Cussons and Unilever (ASOC [22]). Telephone conversations on 4 July 2008 between a representative of Colgate and a representative of Unilever (ASOC [27]). An internal Unilever email sent on 7 July 2008 (ASOC [28]). A communication involving representatives of Colgate and Unilever on 7 August 2008 (ASOC [32]). An email sent by a representative of Woolworths on 11 August 2008 which was received by representatives of Colgate, Cussons, Unilever and other vendors who supplied laundry detergent to Woolworths (ASOC [36]). An email sent by a representative of Woolworths on 12 August 2008 to representatives of Colgate, Cussons, Unilever and other vendors who supplied laundry detergent to Woolworths (ASOC [37]). A telephone conversation on 19 August 2008 between a representative of Unilever and a representative of Cussons (ASOC [38]). A telephone conversation on 21 August 2008 between a representative of Unilever and a representative of Cussons (ASOC [39]). Telephone conversations on 21 and 22 August 2008 between representatives of Unilever (ASOC [40]). A conversation between a representative of Unilever and a representative of Woolworths on or about 21 August 2008 (ASOC [41]). A meeting between a representative of Woolworths and representatives of Cussons on 25 August 2008 (ASOC [42]). An email sent by a representative of Unilever to a representative of Woolworths on 26 August 2008 (ASOC [43]). A meeting between a representative of Woolworths and representatives of Unilever on 27 August 2008 (ASOC [44]). An email between representatives of Colgate sent on 29 August 2008 (ASOC [45]). Emails sent by a representative of Woolworths to representatives of Colgate, Cussons and Unilever on 22 December 2008 (ASOC [46]). An email sent by a representative of Woolworths to representatives of Colgate, Cussons and Unilever on 5 January 2009 (ASOC [47]). 26 As can be seen, less than half of the pleaded meetings or communications directly involved Cussons. Even fewer involved a direct communication between Cussons and one of the other Suppliers. 27 It should be noted that the evidence concerning the specifically pleaded meetings and communications did not comprise the entirety of the evidence relied on by the Commission as supporting the inference or inferences that the alleged arrangements or understandings were made or arrived at. Those were, however, the meetings or communications that the Commission specifically identified as supporting the alleged agreement or understanding (see particular 1 to ASOC [56] and [63], and ASOC [13]-[17], [19]-[22], [27], [28], [32] and [36]-[48]). 28 Fourth, the Commission's case was that the Withhold Supply Arrangement and the Aligned Transition Arrangement were partly written and partly oral (particular 4 to ASOC [56] and [63]). To the extent that they were in writing, the Commission identified the writing as being the pleaded written communications, mostly emails, to which reference has just been made. Likewise, to the extent that they were oral, the Commission identified the discussions that occurred in the pleaded meetings and telephone conversations to which reference has just been made. 29 Fifth, the Commission also alleged that the Withhold Supply Arrangement and the Aligned Transition Arrangement were "wholly or partly implied from the facts, matters and circumstances" relating to the specifically pleaded meetings and communications (particular 5 to ASOC [56] and [63]). 30 In its submissions, the Commission sought, at times, to characterise the alleged arrangement or understanding as a "hub and spoke" arrangement whereby the individual Suppliers, Colgate, Cussons and Unilever, made or arrived at the arrangement or understanding by communicating not directly, but mostly through a common "hub". The "hub" was alleged to be Accord, in the first instance, and then later, Woolworths. That submission was probably made in an effort to explain or account for the limited number of direct communications between Cussons and the other two Suppliers. 31 Cussons complained that the Commission's "hub and spoke" submission went outside the Commission's pleading. It submitted that the Commission should be held to its pleaded case. As will be seen, there was some merit in Cussons' complaints in that regard, though ultimately it is unnecessary to consider the implications of that pleading point. 32 The final general point to note is that the Commission's case at trial turned out to be largely documentary in nature. While the Commission adduced affidavit evidence from a number of officers or employees of Unilever, ultimately their evidence added little, in terms of support for the Commission's case, to the content of the documents. That, in many respects, very much reflected the way that the case had been pleaded. STATUTORY SCHEME 33 Cussons admitted that, at the relevant time, there was a market in Australia for the wholesale supply of powdered and liquid laundry detergent products for domestic use within the meaning of s 4E of the Act. It also admitted that it was in competition with Colgate and Unilever in that market within the meaning of ss 45(3) and 4D of the Act and, from 24 July 2009 onwards, within the meaning of s 44ZZRD(4) of the Act. 34 The alleged arrangement and understanding (be it the Withhold Supply Arrangement or the Aligned Transition Arrangement) was said to have been entered into in the period 18 April 2008 to 31 January 2009. During that period, s 45(2) of the Act provided as follows: 45 Contracts, arrangements or understandings that restrict dealings or affect competition … (2) A corporation shall not: (a) make a contract or arrangement, or arrive at an understanding, if: (i) the proposed contract, arrangement or understanding contains an exclusionary provision; or (ii) a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition; or (b) give effect to a provision of a contract, arrangement or understanding, whether the contract or arrangement was made, or the understanding was arrived at, before or after the commencement of this section, if that provision: (i) is an exclusionary provision; or (ii) has the purpose, or has or is likely to have the effect, of substantially lessening competition. 35 Section 4D of the Act defined the circumstances in which a provision of a contract, arrangement or understanding was taken to be an "exclusionary provision". Section 4D provided as follows: 4D Exclusionary provisions (1) A provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be taken to be an exclusionary provision for the purposes of this Act if: (a) the contract or arrangement was made, or the understanding was arrived at, or the proposed contract or arrangement is to be made, or the proposed understanding is to be arrived at, between persons any 2 or more of whom are competitive with each other; and (b) the provision has the purpose of preventing, restricting or limiting: (i) the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons; or (ii) the supply of goods or services to, or the acquisition of goods or services from, particular persons or classes of persons in particular circumstances or on particular conditions; by all or any of the parties to the contract, arrangement or understanding or of the proposed parties to the proposed contract, arrangement or understanding or, if a party or proposed party is a body corporate, by a body corporate that is related to the body corporate. (2) A person shall be deemed to be competitive with another person for the purposes of subsection (1) if, and only if, the first-mentioned person or a body corporate that is related to that person is, or is likely to be, or, but for the provision of any contract, arrangement or understanding or of any proposed contract, arrangement or understanding, would be, or would be likely to be, in competition with the other person, or with a body corporate that is related to the other person, in relation to the supply or acquisition of all or any of the goods or services to which the relevant provision of the contract, arrangement or understanding or of the proposed contract, arrangement or understanding relates. 36 In relation to s 45(2)(b)(ii) and the element that the relevant provision of the contract, arrangement or understanding "has the purpose, or has or is likely to have the effect, of substantially lessening competition", s 4F of the Act provided that a provision will be deemed to have a particular purpose if it was included in the contract, arrangement or understanding for that purpose, or for purposes that include or included that purpose and that purpose was or is a substantial purpose. Section 4G provided that references to the lessening of competition shall be read as including preventing or hindering competition. 37 It was alleged that Cussons gave effect to the relevant arrangement or understanding between 2 March 2009 to 31 December 2009. The Commission alleged that in the period up to 24 July 2009, by giving effect to either the Withhold Supply Arrangement or the Aligned Transition Arrangement, Cussons contravened s 45(2)(b)(i) and (ii) respectively. 38 Section 4 of the Act defined "give effect to", in relation to a provision of a contract, arrangement or understanding, as including "do an act or thing in pursuance of or in accordance with or enforce or purport to enforce". 39 With effect from 24 July 2009, the Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009 (Cth) inserted a new Division 1 in Part IV of the Act dealing with cartel conduct. Section 44ZZRK provided as follows: 44ZZRK Giving effect to a cartel provision (1) A corporation contravenes this section if: (a) a contract, arrangement or understanding contains a cartel provision; and (b) the corporation gives effect to the cartel provision. (2) Paragraph (1)(a) applies to contracts or arrangements made, or understandings arrived at, before, at or after the commencement of this section. (Note omitted.) 40 Section 44ZZRD defined the circumstances in which a provision of a contract, arrangement or understanding was a "cartel provision". Section 44ZZRD(1) provided as follows: 44ZZRD Cartel provisions (1) For the purposes of this Act, a provision of a contract, arrangement or understanding is a cartel provision if: (a) either of the following conditions is satisfied in relation to the provision: (i) the purpose/effect condition set out in subsection (2); (ii) the purpose condition set out in subsection (3); and (b) the competition condition set out in subsection (4) is satisfied in relation to the provision. 41 Section 44ZZRD(2) defined the circumstances in which the "purpose/effect condition" is satisfied. It is not relevant for present purposes. Section 44ZZRD(3) defined the circumstances in which the "purpose condition" is satisfied. Relevantly, for present purposes, s 44ZZRD(3)(a)(i) provided that the purpose condition is satisfied if the provision has the purpose of directly or indirectly preventing, restricting or limiting the production, or likely production, of goods by any or all of the parties to the contract, arrangement or understanding. 42 Section 44ZZRD(4) defined the circumstances in which the "competition condition" is satisfied. Relevantly, the effect of s 44ZZRD(4)(a), (b) and (f) was that where s 44ZZRD(3)(a)(i) applies, the competition condition is satisfied if two or more parties to the contract, arrangement or understanding are or are likely to be, or but for any contract, arrangement or understanding would be or would be likely to be, in competition with each other in relation to the production of the relevant goods. 43 Part VI of the Act contained provisions relating to enforcement and remedies for contraventions of Part IV, including relevantly contraventions of ss 45(2) and 44ZZRK of the Act. Section 76(1), which for present purposes remained relevantly identical before and after the July 2009 amendments, provided that if the Court is satisfied that a person has contravened, inter alia, a provision of Part IV, the Court may order the person to pay to the Commonwealth a pecuniary penalty. Section 76(1A) set out the maximum pecuniary penalties that could be imposed. In the case of contraventions of s 45(2) and, after 24 July 2009, s 44ZZRK, the maximum penalty, in broad terms, was the greater of $10 million and either three times the total value of the benefits attributable to or obtained as a result of the contravention, if the benefit is able to be determined by the Court, or otherwise 10% of the annual turnover of the body corporate. 44 The important point to note, for present purposes, is that if the Commission succeeded in proving that Cussons contravened s 45(2) or s 44ZZRK of the Act, Cussons would be liable to pay a pecuniary penalty of up to at least $10 million for each separate contravention. RELEVANT PRINCIPLES 45 The parties were in broad agreement concerning the relevant principles to be applied in addressing the Commission's case. The real issue was the application of those principles to the facts as found. Arrangement or understanding 46 The words "contract, arrangement or understanding" are not relevantly defined in the Act. They embrace a "spectrum of consensual dealings" between two or more parties: Australian Competition and Consumer Commission v Leahy Petroleum Ltd [2007] FCA 794; 160 FCR 321 at [24]. The nature of a "contract", which lies at one end of the spectrum, is well understood. In simple terms, a contract is made when an offer made by one party is accepted by another, supported by consideration, and there is an intention to create a legally binding relationship. Once made, a contract gives rise to enforceable legal obligations, subject to defences such as illegality. Perhaps not surprisingly, anti-competitive arrangements are rarely, if ever, enshrined in formal contracts. The Commission did not allege that Cussons entered into a contract with Colgate or Unilever. 47 Arrangements and understandings are, generally speaking, less formal and less clearly defined than contracts. 48 An arrangement generally connotes a consensual dealing between parties that is less formal and lacks some or more of the elements that are necessary for the creation of a contract: Leahy at [26]. The parties need not, for example, intend to create a binding legal relationship. The use of the word "make" in s 45(2), in the case of both contracts and arrangements, would tend to suggest that, like a contract, an arrangement would generally require some degree of negotiation or communication between the parties concerning the terms of provisions of the arrangement: Leahy at [26]; Australian Competition and Consumer Commission v Air New Zealand Limited [2014] FCA 1157; (2014) 319 ALR 388 at [463] (overturned on appeal on findings of fact but without criticism of the primary judge's recitation of principles in respect of "arrangement or understanding") citing Leahy at [26], [27]-[28]. 49 An "understanding", which perhaps lies at the other end of the spectrum, generally connotes a consensual dealing between parties that is even less formal or less precise than an arrangement: Leahy at [26]; Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2004] FCA 1678; (2004) 141 FCR 183 at [54]. That would appear to follow not only from the ordinary meaning of an understanding, but also from the fact that, for the purposes of s 45(2) of the Act, an understanding is "arrived at", rather than made. The concept of an understanding is broad and flexible: Trade Practices Commission v David Jones (Aust) Pty Ltd (1986) 13 FCR 446 at 463 citing Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 at 25; see also Leahy at [27] citing L Grollo & Company Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 at 89. 50 Unlike an arrangement, an understanding "can be tacit, in the sense that it can be arrived at by each party, either by words or acts, signifying an intention to act in a particular way in relation to a matter of concern to another party": Leahy at [28]. It can, in other words, be arrived at without any express negotiation or communication between the parties. 51 Discrete characteristics aside, a core element of both an arrangement and an understanding is that there must be some "meeting of the minds" of those who are said to be party to the arrangement or understanding, or some consensus as to what is to be done or not to be done: Top Performance Motors Pty Ltd v Ira Berk (Qld) Pty Ltd (1975) 24 FLR 286 at 291. In that case, in a passage that has been cited and approved in many subsequent cases, Smithers J (with whom Evatt J agreed) said (at 291): … the existence of an arrangement of the kind contemplated in s.45 is conditional upon a meeting of the minds of the parties to the arrangement in which one of them is understood, by the other or others, and intends to be so understood, as undertaking, in the role of a reasonable and conscientious man, to regard himself as being in some degree under a duty, moral or legal, to conduct himself in some particular way, at any rate so long as the other party or parties conducted themselves in the way contemplated by the arrangement. It seems to me also that an understanding must involve the meeting of two or more minds. Where the minds of the parties are at one that a proposed transaction between them proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct, it would seem that there would be an understanding within the meaning of the Act. 52 Both an arrangement and an understanding require that at least one party assume an obligation, or give an assurance or an undertaking, that they will act in a particular way; a mere expectation as a matter of fact that a party will act in a certain way is not enough: Air New Zealand at [463]; Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (No 8) (1999) 92 FCR 375; [1999] FCA 954 at FCR 408 [141]; Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 at [79]; Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission (2005) 159 FCR 452; [2005] FCAFC 161 at FCR 464 [45]. An independently held belief will also not be sufficient to create an arrangement or understanding: Trade Practices Commission v Email Ltd (1980) 43 FLR 383 at 385. 53 Whether a degree of mutuality or reciprocity of obligations is a necessary component of an understanding is not entirely settled. The authorities tend to suggest that, while it is in theory possible that an understanding might be established where one party has committed to behave in a certain way without some commitment by another party, in practice, reciprocity will ordinarily, if not always, be present: see Air New Zealand at 463; Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 at 230-231. 54 Two final observations can be made for the purposes of this case. First, a meeting of the minds can be inferred from circumstantial evidence: ACCC v Universal Music Australia Pty Ltd (2001) 115 FCR 442 at [490]; News Limited v Australian Rugby Football League Limited (1996) 64 FRC 410 at 563 (the Super League Case). Second, and more holistically, for the purpose of establishing whether an arrangement or understanding was reached, the Court must consider the documentary and testimonial evidence as a whole: Australian Competition and Consumer Commission v Yazaki Corporation (No 2) [2015] FCA 1304 at [77]. Purpose 55 As has been explained, the Commission's case in respect of the Withhold Supply Provisions was that they were exclusionary provisions as defined in s 4D of the Act, and had the purpose of preventing, restricting or limiting the supply of goods to particular persons or classes of persons, as well as the purpose of preventing, restricting or limiting the production or likely production of detergent products for the purpose of s 44ZZRD(3)(a)(i). In respect of the Aligned Transition Provisions, the Commission alleged that each had the purpose of substantially lessening competition in the whole laundry detergent market for the purpose of s 45(2) of the Act. 56 The purpose of a provision is the end sought to be accomplished by the provision; the subjective purpose of the participants in the arrangement or understanding: News Limited v South Sydney District Rugby League Football Club Ltd (2003) 215 CLR 563 at [18]; [43]; [63], [212]. 57 Section 4F of the Act provides that a provision will be deemed to have a particular purpose if it was included in the contract, arrangement or understanding for that purpose, or for purposes that include or included that purpose, and that purpose was a substantial purpose. That "requires one to look to the purpose of the individuals by whom that provision was included in the contract, arrangement or understanding in question": ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 at 476. The proscribed purpose need only be one of a number of purposes, so long as it was substantial: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (2003) 198 ALR 657 at [30]. 58 The effect of an arrangement or understanding is irrelevant to a consideration of its purpose: South Sydney District Rugby at 631. 59 The words "restricting" and "limiting", in the context of the s 4D definition of "exclusionary provisions", and the purpose condition in s 44ZZRD(3)(a)(i), do not have any discernibly different meaning; they connote a circumstance where supply is not prevented, but less than full supply is maintained: South Sydney District Rugby at 575-576 [25]. Substantial lessening of competition 60 As explained earlier, the Commission's case is that the Aligned Transition Provisions had, or were likely to have had, the effect of substantially lessening competition in the market for laundry detergents in Australia. 61 In assessing whether there has been a substantial lessening of competition, a "with and without" or "but for" approach or test is generally applied: the Court considers the likely state of competition in the relevant market "with" the relevant conduct (here, the making of an arrangement, or arrival at an understanding, including the Aligned Transition Provisions) and compares it with the likely state of the market "without" or "but for" the conduct: Stirling Harbour Services Pty Ltd v Bunbury Port Authority [2000] ATPR 41-783 at [12]. The hypothetical market without the impugned conduct is commonly referred to as the "counterfactual". 62 The test is not a "before and after" test, although "as a matter of fact, the existing state of competition in the market may throw some light on the likely future state of competition in the market absent the impugned conduct": Stirling Harbour at [12]. 63 Conduct "has the effect of lessening competition in a market only if it involves a reduction in the level of competition which would otherwise have existed in that market but for the conduct in question": Stirling Harbour at [66]. In Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 44 ALR 173, Smithers J explained the relevant inquiry in the following terms (at 191-192): To apply the concept of substantially lessening competition in a market, it is necessary to assess the nature and extent of the market, the probable nature and extent of competition which would exist therein but for the conduct in question, the way the market operates and the nature and extent of the contemplated lessening. To my mind one must look at the relevant significant portion of the market, ask oneself how and to what extent it would have been competition therein but for the conduct, assess what is left and determine whether what has been lost in relation to what would have been, is seen to be a substantial lessening of competition … Accordingly, in my opinion, competition in a market is substantially lessened if the extent of competition in the market which has been lost, is seen by those competent to judge to be a substantial lessening of competition. Has competitive trading in the market been substantially interfered with? 64 The comparison should be conducted having regard to commercial realities and normal commercial practices, as opposed to theoretical models: Eastern Express Pty Ltd v General Newspapers Pty Ltd (1991) 30 FCR 385 at 421-422; Stirling Services at [66]. The focus is not on the effect of the conduct on particular competitors, but rather its effect on the state or condition of the market generally: Pont Data at 478. 65 The word "lessening" in this context should be construed qualitatively, as opposed to quantitatively, and involves forming judgments about the likely impact of the conduct on the market in general: Eastern Express at 421. 66 Section 4G provides that references to the "lessening of competition" shall be read as including preventing or hindering competition. The phrase "preventing or hindering" should be given a broad construction: Australian Competition and Consumer Commission v Pfizer Australia Pty Ltd [2015] FCA 113; 323 ALR 429 at [74]. 67 A "substantial" effect is one that is "substantial in the sense of meaningful or relevant to the competitive process": Stirling Harbour at [114]; Rural Press Limited v Australian Competition and Consumer Commission (2003) 216 CLR 53 at [41]. Burden of and standard of proof 68 The Commission bears the burden of proving that Cussons contravened s 45(2)(a)(i) and (ii), s 45(b)(i) and (ii) and s 44ZZRK as alleged. 69 Given that this is a civil proceeding, the Court must find the Commission's case proved if it is satisfied that the case has been proved on the balance of probabilities: s 140(1) of the Evidence Act 1995 (Cth). 70 There could be little doubt that the nature of the causes of action pleaded by the Commission, the subject matter of the proceeding, namely serious allegations of the Act by Cussons, and the gravity of the matters alleged, are all very serious. If the Commission proves its case, Cussons could be liable for pecuniary penalties of up to $10 million for each separate contravention. These are matters that the Court is required to take into account in deciding whether it is satisfied that the Commission has proved its case on the balance of probabilities: s 140(2) of the Evidence Act. 71 Section 140(2) of the Evidence Act in large measure encapsulates in statutory form the relevant observations of Dixon J (and the equivalent observations of Rich J) in Briginshaw v Briginshaw (1938) 60 CLR 336, including the following frequently cited passage (at 361-362): The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitively developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences. 72 The so-called Briginshaw standard is apposite to the circumstances of this case. The Commission did not suggest otherwise. The nature of the allegations and the gravity of the consequences mean that a close examination and careful weighing of all the evidence and facts proved as a basis for inference is warranted. All of the factual issues that require determination by the Court have been approached on that basis. EVIDENCE AND FACTS 73 Many of the primary facts were not significantly in dispute. The critical question is what inferences can and should be drawn from the primary facts. 74 The parties produced and signed an agreed statement of facts for the purposes of s 191 of the Evidence Act 1995 (Cth). The facts in the agreed statement of facts, for the most part, concerned the meetings and communications relied on by the Commission and pleaded in the ASOC. 75 The Commission relied on affidavit evidence from eight lay witnesses. Those witnesses were all former officers or employees of Unilever: Mr Sebastian Lazell, who was Chairman of Unilever Australia and New Zealand; Mr Peter Campbell, who was Vice President, Customer Development for Australia and New Zealand; Mr David McNeil, Vice President, Marketing; Mr Ken Basha, who was the Customer Director for Woolworths; Ms Jennifer Moss, who was Regional Design Centre and Technical Management Director; Mr Geoff Bellingham, who was Customer Manager for Woolworths; Ms Michelle Katz, who was Marketing Manager, Homecare; and Ms Amanda Tilley, who was a Customer Director for Coles. As will be seen, the affidavit evidence in chief of those witnesses was to a large extent a chronological excursion through contemporaneous documentation of Unilever's internal and external deliberations, discussions and dealings concerning its transition from standard to ultra concentrated laundry powder in early 2009. In many respects, their evidence did not greatly travel beyond commentary on the documentation. All of the Commission's lay witnesses were cross-examined. 76 Ultimately, there was no issue concerning the credit of any of the Commission's lay witnesses, or the reliability of their evidence generally. Cussons did not submit that any of their evidence should not be believed or accepted. On the whole, each of the witnesses presented as a witness who was endeavouring to give an honest and accurate account of events that occurred some time ago. 77 The Commission also relied on expert opinion evidence from an economist, Professor Philip Williams. The nature of Professor William's opinion evidence will be addressed later. 78 The Commission also tendered a very large volume of documentary evidence, mainly comprising documents that the Commission was able to obtain from Colgate, Cussons, Unilever and Woolworths in the course of its investigation. The documentary evidence really provided the backbone of the Commission's case. 79 It should be emphasised that it was and is important to carefully consider the statements in each of the documents relied on by the Commission in context. The relevant context includes the author of the document, the date the document was created, the nature of the document in question and the circumstances in which the document was created. Many of the documents were prepared by sales and marketing people, and comprised either internal presentations to persons involved in considering and making decisions about the transition to ultra concentrates, or external presentations to Woolworths and Coles. There was, it must be said, a tendency in the Commission's case, to seize on certain statements in some of the documents and consider them in isolation and out of context. 80 Cussons relied on affidavit evidence from seven witnesses. Each of them was an officer or employee of Cussons at the time they gave evidence. Those witnesses were: Mr Mark Davey, who was Director, Business Development; Mr Mark Cunningham, who was Product Development Manager, Homecare; Mr Guy Freene, who was National Field Manager and National Grocery Operations Manager; Mr Scott Wilson, who was General Manager of Sales or Sales Director; Ms Rebekah Phillips, who was Human Resources Advisor; Mr Steven Messina, who was the Customer Analyst – Woolworths; and Mr Matthew Stewart, who was General Manager, Finance and Information Technology. Only Ms Phillips, Mr Messina and Mr Stewart, whose evidence did not directly relate to the relevant events, meetings and communications during the period 2007 to 2009, were not cross-examined. 81 With one exception, there was no real issue concerning the credibility and reliability of any of the witnesses called by Cussons. Like the Commission's witnesses, on the whole, the witnesses called by Cussons presented as honest and reliable witnesses who were endeavouring to give a truthful and accurate account of events that occurred some time ago. The Commission did not submit otherwise. 82 The one possible exception was Mr Davey. The Commission submitted that, in the course of cross-examination, Mr Davey exhibited a willingness, either consciously or subconsciously, to give answers that he perceived to be beneficial to Cussons' case and to refuse to give proper concessions that might harm Cussons' case. In the Commission's submission, the Court should exercise caution before accepting Mr Davey's evidence and should only do so in circumstances where it was corroborated by a contemporaneous document or evidence given by another witness. In support of that submission, the Commission contended that Mr Davey's evidence about two specific matters was implausible and unbelievable. The first matter concerned the interpretation of an email that Mr Davey received from Ms Sarah Baldwin (the Category Marketing Manager for Laundry at Cussons) in July 2008. The second concerned a document that Mr Davey received for the purposes of a board meeting in August 2008. 83 Mr Davey's evidence about those matters will be considered in detail and in context later. It suffices at this stage to note that the Commission's criticisms of Mr Davey's evidence have little or no merit. Indeed, the parts of Mr Davey's evidence that were criticised by the Commission, when carefully analysed in context, were for the most part credible and not as implausible as contended by the Commission. In any event, even if there was some merit in the Commission's criticisms, it could not fairly be said that Mr Davey's evidence about those matters infected the whole of his evidence. 84 Like the other Cussons witnesses, on the whole Mr Davey presented as a credible and reliable witness who was endeavouring to give honest evidence about what he recalled. Indeed, the Commission itself relied on some parts of Mr Davey's evidence, even parts that may not have been fully corroborated by documentary or other evidence. While his evidence, like the evidence given by all the witnesses, was required to be carefully weighed and analysed in the context of the evidence as a whole, the Commission's submission that his evidence should only be accepted where it was corroborated by other evidence is rejected. 85 Cussons also relied on some additional documentary evidence, though most of Cussons' internal documents appeared to have been obtained by the Commission in the course of its investigation and were tendered as part of the Commission's case. 86 Following is a summary of the evidence and facts. Given the considerable length of the affidavit evidence and the very large number of documentary exhibits relied on by the parties (the Commission's exhibits alone filled over 15 lever arch folders), it is obviously not possible to refer to all the evidence. The evidence referred to in this summary is the evidence to which the parties gave particular emphasis in their respective submissions. Other aspects of the evidence will be addressed in the context of considering whether the Commission made out its case. The Australian laundry detergent market 87 It was common ground that, when the relevant events occurred during 2008 and 2009 there was a market in Australia for the wholesale supply of laundry detergent products for domestic use. Although laundry detergent was manufactured and supplied in powder and liquid form, powder laundry detergents led the market and accounted for approximately two thirds of sales. 88 A number of manufacturers made wholesale supplies of laundry detergent in Australia. The manufacturers included Colgate, Cussons, Unilever, Kao Australia Pty Ltd and Amway of Australia Pty Ltd. 89 Colgate supplied laundry detergents under a number of brand names, including 'Cold Power', 'Dynamo', 'Fab', 'Spree', 'Hurricane' and, up to and including February 2009, 'Love N Care'. During 2008 and 2009, Colgate's liquid laundry detergents were manufactured at plants in Villawood, New South Wales and its powdered laundry detergents were manufactured at plants in Labrador, Queensland. 90 Cussons supplied laundry detergents under the brand names 'Radiant', 'Duo' and 'Down to Earth'. During 2008 and 2009, Cussons' laundry detergents were manufactured at a plant in Dandenong, Victoria. 91 Unilever supplied laundry detergents under the brand names 'Omo', 'Surf' and 'Drive'. During 2008 and 2009, Unilever's laundry detergents were manufactured at a plant in Petone, located in the region of Wellington, New Zealand. 92 Kao supplied laundry detergents under the brand name 'Biozet'. 93 Amway's laundry detergents were sold directly to consumers and were not supplied wholesale to supermarkets and other stores. 94 Colgate, Cussons and Unilever were the major wholesale suppliers of laundry detergents in Australia. Together, they accounted for approximately 80% of the market. There was no dispute that Colgate, Cussons and Unilever were relevantly in competition with each other in relation to the production and wholesale supply of laundry detergents in Australia. For the sake of simplicity, and because the other wholesale suppliers were generally considered to be "minor players", Colgate, Cussons and Unilever have and will continue to be referred to collectively as the Suppliers unless stated otherwise. 95 Throughout 2008 and 2009, Colgate, Cussons, Unilever, Kao and Amway were members of Accord. As noted earlier, Accord was the national industry association for the Australasian hygiene, cosmetic and speciality products industry. 96 The main retailers to whom the Suppliers supplied laundry detergents were Woolworths and Coles. The main wholesaler to whom the Suppliers made supplies was Metcash. Other retailers or wholesalers to whom at least some Suppliers made some supplies included Big W, Franklins, Statewide Independent Wholesalers, API, Sigma, Symbion, Priceline and smaller independent retailers. From time to time, particular laundry detergent products were supplied on an exclusive basis to a particular retailer. 97 In early 2008, the Suppliers were experiencing rising manufacturing costs. The rising costs were in part due to the rising costs of sodium tripolyphosphate, one of the inputs for the production of powdered laundry detergents. 98 At the same time, the Suppliers were experiencing extensive price competition. Throughout 2008 and 2009, more than half of the retail sales of laundry detergents were at promotional or discounted prices. 99 The result was that the laundry detergent market was generally considered to be performing poorly for both the Suppliers and their retailers. The market had not experienced any growth for some time. There was evidence that the Suppliers were faced with declining margins. The genesis of the transition to ultra concentrates in the Australian market 100 During 2008, the majority of powdered and liquid laundry detergent products sold in Australia for domestic use were formulated in a way that was, or came to be regarded, as standard concentration. By at least January 2008, however, each of the Suppliers was aware of a global trend towards the introduction of so-called ultra concentrate laundry detergents. In the previous year, there had been an industry-wide transition to ultra concentrated laundry detergents in Europe and the United States. 101 Ultra concentrated detergents, as the name would suggest, contained less inert or inactive ingredients, so a smaller quantity of the product could produce the same results or number of washes as a larger amount of standard concentrate detergents. The commercial or economic benefits of ultra concentrates included lower production costs and lower costs of transportation and storage given the smaller packages that were required. From the retailer's perspective, the benefits of ultra concentrates included that they occupied smaller supermarket shelf space. Ultra concentrates were also seen as being better for the environment and therefore "sustainable". 102 It should be noted, in the context of the global trend towards ultra concentrates, that each of the Suppliers was a subsidiary of a large multi-national corporate group. In circumstances where the Suppliers' parent or related companies overseas had transitioned to ultra concentrates in overseas markets, it is difficult to imagine that the transition to ultra concentrates in some form or another in the Australian market was anything other than inevitable. The only real question was the timing and scope of the transition. 103 By late 2007 or early 2008, each of the Suppliers had independently begun to explore the possibility of transitioning to ultra concentrates. Each was aware that their competitors were likely to transition at some stage. Each was weighing up the benefits and the risks of transitioning, including in light of the overseas experience. A change to ultra concentrates was seen by the Suppliers as providing potentially significant cost savings, including packaging and logistic costs. 104 Colgate's internal project for a complete transition to ultra concentrates was called (somewhat unimaginatively) Ultra. It was well in train by late 2007. An internal Colgate email in November 2007 noted that the preferred transition plan was to "encourage a paradigm shift towards a total market transition by Jan[uary] 2009". An accompanying presentation made it clear that Colgate did not know if or when its competitors would be launching ultra concentrates, though it plainly expected that they would do so in the not too distant future. It also indicated that Colgate recognised that there were risks for it if the entire market did not move at the same time. It noted that "Colgate does risk losing share and sales if the market does not move, so in a scenario where there is no indication of competitive launch in January 2009, Colgate's transition could be reduced in scale, or postponed altogether" but that "[i]n the interim, it is imperative that we prepare so that we can meet a full transition in January 2009". 105 Cussons' internal project for the transition to ultra concentrates was called Project Mastermind. Project Mastermind was approved by Cussons' "New Activities Review Team" on 9 January 2008. The "target implementation date" noted in the initial documentation was January or February 2009. As will be seen, by as early as April 2008, Cussons had conducted a feasibility study which had concluded that "[c]oncentration (2X) of RADIANT and DUO is feasible and recommended by Feb[ruary] 2009". 106 Unilever's internal project for the introduction of ultra concentrated detergents was called Project Faster. Unilever had initiated Project Faster by about November 2007. An internal Unilever brief for approval by Unilever's senior management in January 2008 recorded that "Project Faster is the development of a new "super [c]oncentrate range across the Unilever powders portfolio for launch in Q1 2009". It noted that it was "envisaged that the super [c]oncentrate range will supersede all current powder offerings, and will require a complete review of pack sizes and dosage". From as early as January 2008, the planned launch date for the introduction of ultra concentrated powders was February 2009. The proposed timings included testing by the end of the second quarter of 2008, the product being market ready by the third quarter of 2008, production in the fourth quarter of 2008 and stock being available in the first quarter of 2009. The perceived risks and rewards of transitioning to ultra concentrates 107 It was clear that each of the Suppliers saw considerable commercial benefits in transitioning to ultra concentrates. It was essentially common ground that each of the Suppliers saw that transitioning to ultra concentrates gave them the opportunity to increase their margins on the sale of their products because they would be able to significantly reduce their production, packaging and transportation costs. That was seen as being particularly important in the face of the increasing manufacturing costs, discounting, poor growth and declining margins that each of the Suppliers had been experiencing. 108 Equally, however, each of the Suppliers perceived that there were some risks involved in transitioning to ultra concentrates if one or other of their main competitors did not also fully transition to ultra concentrates at about the same time. The perceived risks mostly related to the high potential of consumer confusion. In simple terms, it was thought that a consumer, faced with two products, both at about the same price, but one of which was in a larger package and appeared to contain more detergent, would be more likely to purchase the product in the larger package. That was thought to be the case even if the product in the smaller package was an ultra concentrate and could produce as many washes as the product in the larger package. In simple terms, each of the Suppliers were concerned that if they fully transitioned to ultra concentrates and one or more of their competitors did not, they would lose sales to the Supplier or Suppliers who continued to supply some standard concentrates. 109 Mr McNeil of Unilever put the matter this way in his evidence: It was my view, upon taking responsibility for marketing of laundry, that this move to compaction was high on the agenda. Although I cannot recall with whom I had the conversation, I believe that, early in 2008, I was told that a successful move to compaction would have to be conducted on an industry-wide basis. The key concern communicated to me was that, if there were any standard concentrate available for purchase, in a large box, consumers would default to purchasing that product, as opposed to adopting ultra concentrates. My view was that as long as there were options in the market that (even if incorrectly) appeared to be better value, that would slow down the process of consumers adopting ultra concentrates. That is, my view, which was the commonly expressed view within Unilever at the time, was that the conversion was going to be better for Unilever if it was everything and everyone – all products and all suppliers, as this would minimise consumer confusion. 110 The evidence of Mr Lazell of Unilever was largely to the same effect. 111 Internal Colgate documents record the same concerns. An internal Colgate presentation slide from later 2007, for example, noted that the "[c]oncentration [r]isks" included "[m]essage complexity precludes 'product +' proposition" and "Price | Unit Size equation disrupted". Another slide, which dealt with the question of what was the "best range / bundle to go to the market with", stated: Do we risk losing share and sales by moving entirely to Ultra? • Anything less than a full transition to Ultra will result in increased manufacturing complexity, eroding the margin benefit of Ultra • Colgate does risk losing share and sales if the market does not move, so in a scenario where there is no indication of competitive launch in January 2009, Colgate's transition could be reduced in scale, or postponed altogether … (Emphasis in original.) 112 As for Cussons, Mr Davey, when examined by the Commission prior to the trial, frankly acknowledged that he saw that there was a risk for Cussons if it unilaterally lead the way to ultra concentrates: Q: Assuming technical feasibility and if the product was otherwise possible to manufacture, did you believe it was likely, as at June 2008, that Cussons could successfully unilaterally lead the way on a transition to concentrated laundry powders? A: No. Q: And why is that? A: The – the consumer behaviour change was – in my opinion, was too great that actually what would happen is the consumer would have ended up double dosing and – and then realise that, from a value point of view, they're washing with – PZ Cussons was costing them a lot of money, or they would just see the smaller box, get confused and stick with – with whatever else they – they had. For – for – for me, in my mind, the consumer education was so critical and bigger than PZ Cussons could do. 113 Mr Davey did not resile from that position in his evidence in this proceeding. Indeed, it was fairly clear from the evidence that, initially at least, Mr Davey was not convinced about the merits of the transition from Cussons' perspective. 114 The apparent concerns that each of the Suppliers had about the commercial risks of fully transitioning alone or before the other Suppliers, to a certain extent explains, or puts in context, evidence in respect of three aspects of the conduct or communications of the Suppliers during 2008. 115 First, as their planning for the transition of their own products to ultra concentrates progressed during 2008, perhaps not surprisingly each of the Suppliers endeavoured to work out or anticipate what their competitors' plans were, or were likely to be, in relation to the transitioning of their various brands to ultra concentrates. As will be seen in the detailed factual chronology that follows, there is evidence of a number of some instances during 2008 where a representative of one of the Suppliers contacted a representative of one of the other Suppliers apparently with a view to ascertaining what that Supplier's plans were in relation to the transition. Equally, there were occasions where, in the course of a meeting or meetings with either Woolworths or Coles about their own transition plans, there was discussion about the transition progress and plans of one of or more of the other Suppliers. 116 Second, in planning their own transition, as again will be seen in the detailed chronology that is to follow, there is evidence that at various times each of the Suppliers gave some consideration to the possibility of some form of industry initiative or agreement, perhaps through an industry association, or perhaps led by one of the major retailers. For example, in the case of Cussons, an invitation to a meeting to be held on 11 February 2008, apparently authored by Mr David Bergmann, Cussons' Research and Development Manager at the time, which was sent to the "Mastermind Team" stated as follows: Welcome to the Mastermind Team. I need the best minds to determine the initial feasibility and implications of superconcentrate laundry powder in our business. It is effectively a paper-based exercise over the next couple of weeks. I have committed to an end of Feb (29th) deadline. On the surface of it, concentrating our laundry powders has the potential for large material, packaging, warehousing, and freight savings. We need to make a critical assessment of our capability, and the potential costs and savings, so that an informed recommendation can be made to the business regarding how to pursue this opportunity. Do we take the initiative, to achieve a competitive advantage? Do we need an industry agreement to make it viable and reduce risk? Do we resist and hope that the trade will not force the issue? (Emphasis added.) 117 Other documents which refer to the possibility or desirability of an industry agreement or something similar are included in the detailed chronology that follows. Not surprisingly, the Commission seized on all such references as evidence that the Suppliers understood that collective action was necessary. The Commission submitted that it was that understanding which drove the Suppliers to make or arrive at the alleged arrangements or understandings. 118 That submission will be of course be addressed in more detail in due course. It suffices at this stage to note that considerable care and caution must be exercised in considering the references in the documentary evidence the desirability of, or in some cases the existence of, an industry agreement. Each such reference must be read and considered in context, including in the context of the evidence as a whole. Expressions such as "industry initiative" and "industry agreement" are somewhat vague and could encompass many things, including agreements and initiatives that involve little or nothing more than consumer education or the use of common ratings, standards or terminology to avoid customer confusion. It may generally be accepted that the evidence showed that the Suppliers, including Cussons, saw that there may have been some scope for, or potential benefits in pursuing, some form of industry agreement or initiative in relation to the transition to ultra concentrates. Ultimately, however, the key question is whether Cussons in fact entered into any such agreement, arrangement or understanding with the other Suppliers and, even more significantly, whether any such agreement, arrangement or understanding contained the provisions alleged by the Commission. 119 Third, in their internal discussions and communications, and in their communications with retailers, in particular Woolworths, in relation to the transition to ultra concentrates, the Suppliers occasionally referred to the desirability of "the trade" taking leadership in relation to the transition. The reference to "the trade" was a reference to the major retailers. The evidence tended to show that the Suppliers at times thought that, if one or other of the major retailers took a lead role in driving the transition to ultra concentrates, that might produce the desirable result of encouraging a uniform and simultaneous transition to ultra concentrates by all the Suppliers, and thereby avoiding the consumer confusion that might accompany a staggered or partial transition. For example, an internal Colgate email sent in November 2007, at the very early stages of Colgate's "Ultra" planning, stated: Ultra Transition Recommendation As you read through the presentation, you will see our recommended transition plan. The preferred route is to encourage a paradigm shift towards a total market transition by Jan 2009. Some of this is driven by technical and manufacturing readiness which we can take you through on our phone call. We also believe that it is in the interests of the consumer to present a clear, new Ultra shelf at once without a 'mixed shelf' of Ultra and non-Ultra products. To achieve a category transition we would like to engage the trade's support and leadership. (Emphasis added.) 120 In that regard, it would appear that the Suppliers were all aware, or at least became aware during 2008, of the lead role that the large retailer, Wal-Mart Stores, Inc. (Walmart), played in the transition to ultra concentrates in the United States. The evidence of Mr Campbell, of Unilever, was that Walmart's role included using point of sale educational material to explain the change to ultra concentrates to ensure that consumers were aware that the value of the new ultra concentrate range was the same as the equivalent standard concentrate product, even though the ultra concentrate product was smaller in size. Other evidence suggested that Walmart's role may have been somewhat more forceful. The evidence of Mr Bellingham, of Unilever, for example, was that he understood that Walmart basically told laundry suppliers that if they wanted to be on Walmart's shelves beyond a certain date, they needed to move to ultra concentrates. It would appear to have been envisaged, by some at least, that Woolworths might play a similar role in relation to the transition in Australia. Woolworths and Coles planning and review processes and timing 121 Woolworths and Coles had two range reviews per year for the laundry category. The first was a major review which occurred in or around February each year. The second was a minor review which occurred in or around July each year. A major range review involved the retailer reviewing and reconsidering the entire range of stock keeping units (SKUs) for the relevant category. 122 The evidence of Mr Wilson, of Cussons, was that in major range reviews, Woolworths and Coles reconsidered the entire range of SKUs that they acquired for the relevant category. For the laundry category, therefore, the major review by both Woolworths and Coles involved the reconsideration by them of the entire range of laundry detergents that each of the Suppliers supplied to them. Mr Wilson's evidence was that, to assist the retailers in their major reviews, Cussons gave them a series of presentations which included consumer and industry insights, the performance of the category, the developments in Cussons' products, and the SKUs that Cussons wanted to supply to the retailer for the coming 12 months and why those SKUs should be ranged. Once Woolworths and Coles decided which SKUs they wanted to acquire, they developed "planograms". A planogram was a document that set out the location of each relevant SKU on the supermarket shelf. 123 Mr Wilson's evidence was: Range reviews were generally the only time that Coles and Woolworths agreed to acquire new products from Cussons. On occasions, it was possible to persuade Coles and Woolworths to accept a new product outside of a range review process, but in my experience that occurred very rarely. 124 The evidence of Mr Basha, of Unilever, was to the same effect. His evidence included that: A major review would be when the bulk of the innovation was to come to the category. It would also be where the retailer would make potentially [sic] shelf changes and changes to the overall flow of the category. A minor review would be where there's just very few changes, very little done to the shelf and impacting in store. 125 Mr Basha understood that if a manufacturer, such as Unilever, wanted to make a large category change, such as changing its whole range of products to ultra concentrates, it would have to meet the retailers' timetable. He also understood that if the manufacturer did not meet the retailers' timetable for a major review, then it would "miss the boat until the following year". He did not come across anybody in Unilever at the time that had a different understanding or expectation in relation to major reviews. 126 As will be seen, the evidence concerning Woolworths' and Coles' major range reviews was important. It explained, to an extent at least, why each of the Suppliers met with Woolworths on a number of occasions, particularly in the latter half of 2008. More significantly, it undoubtedly bore on the timing of and simultaneous nature of the transition that ultimately occurred in March 2009. The extent to which it bore on that issue was a matter of some considerable contention and debate between the parties. The Commission contended, in short, that the retailers could not dictate what the Suppliers manufactured. Cussons submitted that ultimately Woolworths and Coles drove the timing and scope of the transition. Suffice it to say at this stage that, if all the Suppliers were planning to introduce ultra concentrates at broadly the same time, it seemed fairly logical from the retailers' perspective that such a major change would occur all at once and in the context of a major review. January 2008 meetings and communications 127 Even though their planning was at a very early stage, by January 2008, each of the Suppliers had begun discussing the potential transition to ultra concentrates with their major customers, including Woolworths and Coles. 8 January 2008 meeting between Colgate and Woolworths 128 On 8 January 2008, representatives of Colgate and Woolworths attended a meeting. This was one of the meetings included in the Commission's pleading (ASOC [13], [14]). The Colgate attendees included: Mr Ansell; Mr Sean Bone, the Marketing Manager for Colgate's Consumer Innovation Centre; Mr Eric Jeanmaire, who was the Business Development Manager for Woolworths; Mr Nick Ryan, who was the Customer Development Team Leader for Woolworths; Mr Adam Simmons, who was the Customer Development Team Leader, Woolworths; and Mr Simon Russell, who was the Business Manager Woolworths, Home Care. The Woolworths attendees included Mr James Aylen, General Manager, Longlife Supermarkets; Mr Gordon Duncan, Senior Business Manager, Grocery; and Mr Stanley (Stan) Fuchs, who was Business Manager, Cleaning. 129 An internal Colgate "Negotiating Tool Kit" prepared by Mr Simmons revealed that it was Colgate's intention to attempt to persuade Woolworths to encourage the "whole market" to change over to ultra concentrates in 2009. The document suggested that Colgate planned to tell Woolworths that "a staged approach is unlikely to work, full changeover is the fastest and best way to implement to avoid shopper/consumer confusion". It also indicated that Colgate was aware that Woolworths may consider that there was a "legal risk" to it if it led the "discussion with all vendors". 130 At the 8 January meeting, the Colgate representatives gave a presentation to the Woolworths representatives concerning Colgate's planned transition to ultra concentrates. The slides of the presentation included a recommendation that there be a "full category transition" to ultra concentrates in January 2009. The reference to "full category transition" appears to have been a reference to all suppliers of laundry detergents transitioning to ultra concentrates. In that context, the presentation slides suggested that "category leadership" was required and referred to the transition that occurred in the United States where the transition to ultra concentrates was led by a major retailer, Walmart. The Walmart "paradigm" for transition was said to include that "[a]ll vendors agree to transition by [a] fixed date" and an opportunity for "industry sustainability initiative" and "significant environmental savings while reinvigorating category". The suggestion appears to have been that Woolworths should act as Walmart did in the United States and drive a full transition by all suppliers on the same date. 131 Importantly, the presentation also referred to the possibility of an "environmental proposal". That proposal would be put to the Australian Food and Grocery Council (AFGC) or Accord, or both, and would cover all laundry detergent manufacturers, wholesalers and retailers in Australia and New Zealand. The proposal appeared to involve the AFGC or Accord, or both, acting as "enablers to an industry-wide, non-partisan sustainability initiative with agreement to transition to higher concentration detergent formulas by end-January 2009". 132 An internal Colgate email that followed the meeting indicated that Woolworths were "on [the] same page" as Colgate in terms of the benefits of the transition to ultra concentrates. The email stated: … The net issue is that they WILL NOT provide retailer leadership in the same way as Walmart US has done. (this is what we were trying to achieve) They will be supportive on our launch, they will share and encourage others (if we wish) but they WILL NOT take punitive action against any supplier who does not convert to Ultras in 2009. … 133 Minutes of the meeting prepared by Mr Jeanmaire record Woolworths' response to Colgate's proposal in the following terms: … We will be very happy to support you, to stand up in a profession meeting and say that it sounds a very good way to do it, but not beyond this. … We can't influence other vendors, we can only mention them that some vendors go in that direction. We won't do anything against vendors who don't go in that direction. When you'll have a legal approvement [sic] you have to lead the transition with the others. … Your timing is good: aligned with the 2009 category review timing (january) … 134 The meeting minutes also indicated that Colgate was aware that Woolworths might tell other suppliers about the proposal. In a part of the minutes dealing with "[n]ext steps", the minutes stated: "[n]eed to clarify what we are confortable [sic] with WW [Woolworths] sharing with other suppliers. We need to have 100% alignement [sic] on this". 18 January 2008 meeting between Cussons and Coles 135 At about the same time that Colgate was meeting with Woolworths, representatives of Cussons met with representatives of Coles. That of itself was not unusual. Nor could it be considered in any relevant sense to be untoward or improper. No doubt representatives of each of the Suppliers regularly met with the retailers. 136 On 18 January 2008, Mr Wilson of Cussons, met with Mr Paul Schadel, who was the buyer at Coles responsible for the laundry category. The discussions at that meeting addressed a number of issues in the laundry category. In the course of the meeting, Mr Schadel told Mr Wilson that both Colgate and Unilever would be launching ultra concentrate powders in February 2009. Colgate's Accord proposal 137 As Colgate had foreshadowed during its 8 January presentation to Woolworths, Colgate did in due course approach Accord about a proposed "sustainability initiative". 10 March 2008 meeting between Colgate and Accord 138 On 3 March 2008, Mr Andrea Lagioia, Colgate's General Manager at the time, sent an email to Ms Bronwyn Capanna, who at the time was an Executive Director at Accord. In that email, Mr Lagioia explained that he wanted to discuss the following proposal with Ms Capanna: Ultra concentration of household laundry detergents is emerging as a major sustainability opportunity across the globe. As a need-driven category that reaches into every home, it is almost unique among grocery goods in terms of both its physical ability to be further 'concentrated' and, with annual consumption of approximately 150,000,000 kilograms/litres, the scale of benefit that can be achieved. Recognising this, Colgate-Palmolive has developed a proposal for a voluntary, industry-wide and non-partisan sustainability initiative, in relation to higher concentration detergent formulas across Australia and New Zealand. I would like to explain this to you in a little more detail and discuss what potential role ACCORD could possibly play in making this happen. I can go into detail with you in conference. 139 A meeting between Colgate and Accord was subsequently arranged. It occurred on 10 March 2008. This is one of the Commission's pleaded meetings (ASOC [15], [16]). The representatives of Colgate who attended the meeting included: Mr Bone; Mr Lagioia; Mr Andrew Shepard, who was a Marketing Director at Colgate; and Ms Sarah Whitaker, Colgate's Corporate Counsel. The Accord attendees were Mr Craig Brock, the Director of Policy and Public Affairs; and Ms Capanna. 140 At the meeting, Colgate gave a presentation to Accord concerning the proposed "Household Laundry Detergent Environmental Proposal". The slides to the presentation described the proposal in the following terms: … Proposal to ACCORD as enablers to an industry-wide, non-partisan sustainability initiative with agreement to transition to higher concentration detergent formulas in 2009. … It is intended for this agreement to cover all manufacturers of laundry detergent in Australia and New Zealand (recognising near-universal common supply) and all retailers and wholesalers of those detergents. This includes, but is not limited to: 1. Colgate-Palmolive 2. Unilever Australasia 3. PZ Cussons Australia 4. Woolworths 5. Coles Group 6. Metcash 7. Franklins 141 The "Key Success Factors" for the proposal were said to include: "[f]ull category transition to [u]ltra concentrates" and "[a]ll vendors to align on category initiative" with "[i]ndustry body to lead" and "[a]greed transition date". The "Key Points" of the proposal included that January or July 2009 were the "best opportunities to implement" because those dates aligned with "key 'trade windows' for Woolworths and Coles". 142 An internal Colgate email that reported on the meeting recorded that the "agreed outcomes" included that "ACCORD agreed to adopt the SI [Sustainability Initiative] proposal and will approach the General Managers of each manufacturer of household detergents, seeking their voluntary agreement". The "next steps" were recorded as including "ACCORD to obtain the input of the ACCC. Will not proceed as coordinator without firm indication that ACCC was supportive". 143 On 26 March 2008, Colgate sent Accord a four page document that was said to be the proposal. The summary of the proposal was in the following terms: It is proposed that participants in this scheme will: (1) Agree to adopt voluntary agreement to transition all currently non-complying laundry detergents by an agreed date in 2009 (2) Agree to the definition of sustainable concentration (3) Agree to the introduction of a compliance logo which will be applied to the main consumer panel of those products that meet the standard agreed … (4) Where appropriate the relevant company will modify formulations of certain products so that they may comply with the standard and carry the logo. New products will comply with the standard. 144 The Commission submitted that the key elements of the proposal were: first, that there would be a joint and uniform transition by all Suppliers to ultra concentrates; second, that the transition would occur in early 2009; and third, that the ultra concentrates would have a concentration of 2x. That is neither a fair nor accurate summary of the proposal. In any event, it was simply a unilateral proposal by Colgate. As will be seen, there could be no doubt that Cussons did not agree to it. 18 April 2008 email from Accord to Colgate, Cussons, Unilever and others 145 On 18 April 2008, at 2.32 pm, Ms Capanna of Accord sent an email to Mr Lagioia of Colgate; Mr George Fatouros, Managing Director of Cussons at the time; Ms Moss of Unilever; Mr Doug French of Kao; and Mr Ian Gamble, General Manager of Amway. There was no dispute that Mr Fatouros received the email. This email is one of the communications included in the Commission's pleading (ASOC [17]). The email stated that the "Secretariat has received a proposal for an industry code to be developed for concentrated laundry products – see attached paper". The email attached a document titled 'Household Laundry Detergent Sustainability Initiative (Proposal)'. The email went on to state that Accord wanted to explore the proposal with "relevant member companies at a senior level in the first instance" and inquired whether the recipients were available to attend a meeting on 30 April 2008. 146 The attached proposal was the document that Colgate had sent to Accord on 26 March 2008 and largely mirrored the presentation that Colgate had earlier given to Accord. 147 The circulation of the proposal was an important part of the ACCC's case. It submitted that from the time the proposal was circulated, the Suppliers evinced a commitment to a joint transition to ultra concentrates with a 2x concentration level in early 2009. That submission, however, is not supported by the evidence. All that had occurred at this stage was that Accord had circulated a proposal that had been unilaterally authored by one of the Suppliers. It did not evince any commitment on the part of Cussons. That submission also ignores the surrounding context. It must be considered in light of the fact that, as already indicated, each of the Suppliers already had independent plans to introduce ultra concentrates in early 2009. It must also be considered in the context of the evidence concerning the initial internal reaction of Cussons' management to the proposal, the reaction of Unilever's management, and the evidence concerning the outcome of the Accord meeting that went ahead on 30 April. Cussons' initial reaction to the Accord proposal 148 The initial internal reaction of Cussons' management to the proposal was, for the most part, fairly negative. 149 Mr Fatouros forwarded the Accord email and attachment to Mr Davey. A few days later, Mr Davey circulated an email to Mr Fatouros and other Cussons managers which proposed a meeting to discuss the proposal and set out his initial thoughts concerning the proposal as follows: On the assumption that we will be finished by then, can we meet after the Board S&OP meeting on Thursday, at 3:00 ? To help with preparation here are my thought starters :- Issues/Negatives • I would have thought that out of courtesy ACCORD should communicate ahead of any meeting who has tabled this proposal • ACCORD cannot be serious in targeting sign-up to an initiative agreement by end April ! If nothing else there are legal ramifications to such an agreement which each individual manufacturer will [have] to thoroughly assess e.g. issues with the potential anti-competitive nature of such an agreement. Also, we need more time to fully assess the cost impact. • There is a danger that this document could be construed (in parts) on doubling up on the role of the Trade Practices Agreement i.e. in controlling misleading claims. • When compared to the European A.I.S.E. Laundry Sustainability Project, this agreement is much more specific and prescriptive – an approach that I believe we should not support (as it limits out [sic] flexibility to be competitive with the way that we formulate and make claims). For example, any reference to branded product as performance standards should be rejected – if nothing else then what happens if the branded benchmark is reformulated (?). As principle, I would be recommending that PZ Cussons should not agree to use a competitor's product as a performance benchmark for any of our products (whether a current or a new brand). • PZ Cussons should reject use of an independent body to review product performance until an industry-accepted protocol for laundry detergent wash performance is in place (such a document does not exist and would take a long time to develop due to the complex nature of laundry detergency). Positives/Areas of improvement • I do see value in an industry standard/code of practice for a term such as super-concentrate, such as to avoid consumer confusion and thus ensure environmental benefits can be realized i.e. by the consumer buying into the segment. In this context I would only specify maximum dosages (by weight) for such a term to be used • I do see a need to communicate to consumers the importance of cost per wash (not just cost per kg) – whether through media, on-pack information and/or in-store pricing information. This is not mentioned in the agreement but should be a critical component, in my view i.e. how to communicate to consumers such as to bring about a behavioural shift in buying on cost per kg to buying on cost per wash. • Having ACCORD as the central contact point is a good way to manage this initiative with the retailers – assuming we are not looking for any first mover advantage. Should be linked with the Washwise initiative. 150 In a later email to Mr Fatouros, sent shortly before the 30 April meeting that Mr Fatouros was to attend on behalf of Cussons, Mr Davey made the following points: As promised, attached is a one pager with my bullet points on specific issues with the proposal submitted to ACCORD – I will update and resend after our meeting with the lawyers but I am sending this now in case I am unable to get the update to you in time for your meeting. The attached document deals with issues and can certainly assist in prolonging industry discussions - but IF we wanted to take a more positive stance towards an industry agreement then I would summarise this by encouraging industry to the following 5 simple elements of an agreement :- 1. Agree on a simple definition to sustainable concentrates – simply based on maximum dosage by weight for a normal load. DON'T apply any other criteria (such as % reductions in materials, performance standards, density controls and packaging sizes). This simple approach will still deliver the desired end result – massive reduction in environmental impact 2. Agree on a timing to roll all products out together – assists with the following 2 points 3. Industry agree on a move to communicate no. of washes per pack at shelf (via packaging or shelf communication) 4. Industry communication program educating consumers of the environmental benefits – and explaining how price per wash will not increase even though price per kg will clearly go up 5. Agreed approach for engaging the trade at industry level 151 The "one pager" referred to in the email referred to nine key issues or difficulties that Mr Davey had with the proposal. Those issues included that "[w]e should not enter any agreement that restricts our ability to be competitive" and that "the entire timetable in the proposal needs further review … legal advice required if nothing else …". Mr Davey's evidence was that when he spoke with Mr Fatouros, he said that in light of the concerns he had identified with the proposal, "there was no way that Cussons could agree to it". 152 Importantly, it is readily apparent from Mr Davey's emails that he recognised that there were likely legal ramifications arising from the potentially anti-competitive nature of some aspects of the proposal. He obtained legal advice in relation to that issue. That legal advice, which was given in conference on 29 April 2008 by a solicitor from a large and reputable law firm, was that Mr Fatouros could attend the meeting of Accord on 30 April 2008 and engage in discussions regarding the proposal, but that he should not agree or give any impression that Cussons would agree to any aspect of it. Mr Davey relayed that advice to Mr Fatouros. 153 The solicitor retained by Cussons to provide legal advice in relation to the proposal did not initially reduce his advice to writing. In August 2008, however, Mr Davey sought further advice from the solicitor in relation to what was said to be a revised version of the proposal. That advice was sought before a further meeting of Accord was to be held. The written advice provided by the solicitor at that time, which is addressed in more detail later, confirmed the content of the advice that the solicitor had given in conference on 29 April. 154 The Commission criticised Mr Davey and Cussons in relation to this legal advice. It pointed out that the advice was only directed to the Accord proposal, that Mr Davey did not seek general advice about the proposed transition to ultra concentrates, that the advice was not reduced to writing until much later, and that the advice was not distributed to nor understood by "all relevant persons". Those criticisms have no merit and in any event entirely miss the point. While Mr Davey did specifically seek advice about the proposal, it is readily apparent from the written advice subsequently provided that the advice extended well beyond the terms of the proposal. And while Mr Davey initially only relayed the advice to Mr Fatouros, that was no doubt because it was Mr Fatouros who was to attend the first Accord meeting concerning the proposal. Mr Davey's evidence was that the advice was subsequently discussed more generally at Cussons in any event. Mr Davey was also later involved in issuing guidelines to all persons involved in Project Mastermind. The main point, however, is that Mr Davey's actions in obtaining advice revealed a concern that Cussons not enter into any sort of arrangement or understanding that might limit Cussons' ability to compete and might contravene competition laws. 155 It should also be noted in this context that, in late April 2008, a presentation about Project Mastermind was given to the Cussons board. That presentation included a brief reference to Accord's sustainability proposal, together with a note: "should be modelled on best-practice from Eurocompact and developed over the next 18-24 months". It would appear from some of the accompanying slides that "Eurocompact" was a "laundry sustainability project" in Europe which commenced as early as 2005 and involved a "steering group and several task forces for marketing, legal and scientific issues" to promote a shift to new laundry products which required lower doses. The project included a communication and education campaign and the adoption of "'washright' symbolism" to "reduce the environmental impact of household laundry detergents". Unilever's initial reaction to the Accord proposal 156 The reaction of Unilever's management to the Accord proposal was equally negative. 157 Ms Moss' evidence was that she had a number of concerns about the proposal. They included that the proposal was too controlling from a competition law perspective. She subsequently raised the proposal with Unilever's general counsel, who indicated that, from a legal point of view, the proposal was not something that Unilever would agree to, in its then current form. Ms Moss subsequently sent an email to others at Unilever which stated that while "conceptually [Unilever] are on board with the benefits of a [sic] industry led sustainability project … in reviewing the ACCORD proposal we strongly believe the executional details of the proposal are poor and have many fundamental flaws". The email then set out a long list of flaws. Prior to attending the Accord meeting, Ms Moss received advice from Unilever's general counsel that Unilever could not agree to the Accord proposal because it was anti-competitive and that any code would have to be drafted with extreme care to ensure that it was not anti-competitive. 30 April 2008 meeting of Accord attended by Colgate, Cussons, Unilever and others 158 On 30 April 2008, Accord held a meeting to discuss the proposal that had been put forward by Colgate and sent to the other laundry detergent suppliers. The meeting was attended by Mr Lagioia of Colgate; Mr Fatouros of Cussons; Ms Moss of Unilever; Mr Gamble of Amway; and Mr Brock and Ms Capanna of Accord. Mr French of Kao sent an apology and did not attend the meeting. This was one of the meetings included in the Commission's pleading (ASOC [22]). 159 At the meeting, Mr Lagioia of Colgate revealed that Colgate was the author of the proposal. 160 Following the meeting, Ms Moss sent an email to other Unilever officers and employees which her version of what occurred at the meeting: This meeting went well with overall agreement in principle to a Laundry Sustainability Project that looks to agree a standard for the densification of powders & liquids. Cussons (George Fatouros - MD), Ian Gamble (Amway GM) and I were all in agreement that while we agree with the principle we do not agree with the executional details of the specific proposal. Cussons in particular was highly concerned with the restrictive nature around formulations and timings of the proposal. They admitted they would not be able to move to such a concentration level until end 2009 minimum. Andrea Lagiola [sic] (Colgate VP South Pacific - Chairman - Australia) started with an announcement that it was Colgate who had put forward the proposal. Hence he did not have any concerns. However he strongly pushed that what Colgate wants from the programme is a signed agreement that we all agree to move quickly all skus to super concentrates in liquids & powders. They do not want any of us to have any current concentrates left in the market after the agreed transfer time. We would all have a min concentration level (e.g. 2x from current). Next steps: 1) ACCORD to seek Legal and ACCC advise [sic] on the principles of the industry group working on such a standard. This would be presented as an entire Laundry Sustainability programme (including the Phosphate Code, Wash right initiative and densification code). 2) Once we have ACCC agreement in principle each company will put forward Technical representatives as a working sub group to agree ways forward on specific details. It was agreed that in principle the proposal should be kept simple focus on how we define [the] dosage per wash which would be a super concentrate. There was recognition that given the work required with legal/ACCC and the technical working group that the timing proposed would not be achievable. However once we have agreement from the ACCC there would be urgency for the initiative to be put in place. Let me know if there are any questions, 161 Ms Moss' evidence concerning the meeting was broadly consistent with the account given in her email. She confirmed that Mr Fatouros of Cussons was particularly concerned with the proposal's restrictions regarding formulations and timings. She also confirmed that Mr Fatouros agreed that Accord would have to obtain legal advice and approval from the Commission before the proposal could be progressed. 162 Importantly, in her evidence Ms Moss explained what she understood to be involved in the "Laundry Sustainability Project" which, she had suggested in her email was the subject of an "agreement in principle": The principle was a code or an initiative which would help consumers understand the transition. So a principle of a sustainability initiative which helped – which helped consumers, whether it was a three times or a two times or a one time, understand and hence allow us to be competitive to each other. So a sustainability rewarding system was the principle. 163 Thus, from Ms Moss' perspective at least, any "agreement in principle" appeared to be limited to some form of consumer education and a star ratings scheme. 164 It would appear that Colgate had a different and more positive take on what had occurred, or was likely to occur, in relation to the Accord proposal. An internal Colgate document which purported to provide an Accord "update" stated, somewhat ambiguously and optimistically: "agreement in principle to contract with next steps to gain ACCC approval". The note did not explain exactly what had been agreed in principle. 165 The outcome of the meeting, from Accord's perspective, was summarised in an email that Ms Capanna sent to the meeting attendees some time later (23 July 2008): In summary the consensus of those present at the meeting was: • In principle support was provided, noting that the project should be a part of ACCORD's overarching sustainability framework and a component of the Washwise initiative • Similarities were raised with the Phosphate Code • Any such code needs to be open to members and non-members, voluntary, and compliant with the Trade Practices Act • Pending final requirements, thought may need to be given to access to any specific and necessary technology being made available to all industry players • Specifics need to be considerably reviewed and redrafted e.g. needs to be simplified, less prescriptive, original timing is unrealistic, and a communication campaign would need to be better developed • Any learnings from similar approaches overseas could also be considered • Proposal should be recast into preferably a one/two page document, reviewed by the CEOs of this group prior to being sent for subsequent review by our lawyers Middleton's • Proposal then to be taken up with ACCC for discussion 166 Despite the references in Ms Capanna's email and the Colgate document to an agreement in principle, it is far from clear exactly what, if anything, was agreed between the participants at the meeting. Ms Capanna's "draft outcomes" tends to suggest that the agreement in principle related to some part of the proposal that involved a "sustainability" initiative. That appeared to be confirmed by Ms Moss in her evidence. As noted earlier, in her evidence, Ms Moss explained that the sustainability initiative was, in effect, an initiative which involved a communication campaign the purpose of which was to ensure that consumers would understand and appreciate terminology such as "three times" or "two times" concentration. Whatever it was that was supported or agreed in principle, it appeared to be somewhat ill-defined, if not quixotic. The high-level generality of the initiative was reflected in an email that Mr Fatouros subsequently sent to Ms Capanna and others which referred to a "collective industry opportunity to shape the market's direction towards a more all-round sustainable future". That email is discussed in more detail later. 167 In any event, the in principle support or agreement was heavily qualified. That was reflected in the fact that Ms Capanna's draft outcomes recorded that, whatever it was that was supposedly agreed in principle, that agreement was subject to the review and redrafting of "specifics", was subject to review by the Suppliers' CEOs and Accord's lawyers, and was to be sent to the Commission for discussion. Ms Capanna's note also recorded that any "code" would have to be "compliant with the Trade Practices Act". 168 The Commission submitted that an agreement in principle was reached between the Suppliers at the 30 April meeting "in relation to transitioning to [u]ltra [c]oncentrates". That submission was as vague and ambiguous as the documentary evidence that was said to support it. The evidence, such as it was, concerning the 30 April meeting was far from compelling. The evidence certainly did not suggest that there was any agreement concerning issues such as the timing of any transition or the degree of concentration. Colgate may well have been pushing for some sort of agreement in that regard, but there was considerable push-back from Cussons and Unilever. And, as already noted, if there was to be any such agreement, it had to clear two other significant hurdles: first, it had to effectively be signed-off by Accord's lawyers; and second, and more significantly, it had to be submitted to and approved by the Commission. Woolworths' visit to Unilever's Centre of Excellence in the United States 169 On 28 April 2008, representatives of Unilever and Woolworths were present at a North American study tour organised between the two companies, held at Unilever's Centre of Excellence in New Jersey in the United States. The representatives for Unilever at the study tour were: Mr Basha; Mr Campbell; and Mr McNeil. The Woolworths representatives were: Mr Aylen; Mr Duncan; and Mr Bradshaw McCarry, the Senior Business Manager, Grocery Division. 170 During the 2008 Centre of Excellence visit, the Unilever and Woolworths representatives attended a number of different sessions with representatives of Unilever in the United States. Those sessions included a presentation on new health and beauty products, and a briefing in respect of the launch of ultra concentrated laundry products in North America. It would appear that the discussions during those sessions included discussions about the role that Walmart had played in the United States in coordinating the transition to concentrated products in such a way as to avoid consumer confusion. 171 There was no evidence that Cussons knew anything about this engagement between Unilever and Woolworths. It is difficult to see how this evidence advanced the Commission's case against Cussons in any material way. May 2008 meetings and communications 172 During May 2008, both Colgate and Unilever met with Woolworths. Colgate, it seems, remained optimistic that some form of industry initiative could be the subject of agreement through Accord. Cussons was not involved in any meetings or communications of any particular relevance or importance. 15 May 2008 meeting between Colgate and Woolworths 173 On 15 May 2008, Mr Ansell and Mr Ryan of Colgate met with Mr Aylen and Mr McCarry of Woolworths. During the meeting, Colgate presented a "Business Update". The slides for that presentation referred to a "[p]roposal to ACCORD as enablers to an industry-wide, non-partisan sustainability initiative seeking agreement to transition to higher concentration detergent formulas in Q1 2009". It was suggested that the "member companies" were aiming for an in principle agreement in May 2008. Those rather optimistic statements concerning the Accord proposal must be considered in the context of what the Accord proposal in fact involved and, even more significantly, the fact that, contrary to what the Colgate presentation appeared to suggest, any agreement in principle that had apparently been reached at the 30 April Accord meeting was highly qualified and concerned only high-level or general principles. May 2008 internal Colgate meetings 174 Colgate held an internal mid-year review meeting over a number of days in mid-May 2008. One of the presentations given to the meeting concerned "Execution of Smooth Transition to Ultra Detergents in 2009". The presentation referred to the Accord proposal in the same terms as the "Business Update" presentation given to Woolworths on 15 May. It was not suggested that there had been any agreement or agreement in principle in relation to the specifics of the proposal. Notes of the discussion that occurred during or in relation to the presentation referred to an "industry desire to create [a] new charter for detergents, to be more sustainable". 22 and 29 May 2008 meeting between Unilever and Woolworths 175 On 22 and 29 May 2008, Mr Geoffrey (Geoff) Bellingham, who by this time was Unilever's Customer Manager for Woolworths, met with Mr Fuchs and Ms Susan Jones of Woolworths. Ms Jones was the Promotional Manager at Woolworths. 176 In an email Mr Bellingham sent to Mr Fuchs and Ms Jones after the 22 May meeting, Mr Bellingham confirmed that one of the things that he was actively pursuing was to "[w]ork with all manufacturers to drive super-concentration in powders". Similarly, one of Mr Bellingham's presentation slides for the 29 May 2008 meeting stated: "Work with all manufacturers to implement a category wide solution for super-concentration in powders". 177 In his evidence, however, Mr Bellingham said that the reference to "work with all manufacturers" was not a reference to Unilever working with Colgate and Cussons. He said that: "at no point in time am I planning on getting on the phone and ringing up Colgate and Cussons" because he thought that would be "inappropriate". Rather, his evidence was that this was a reference to Unilever working with Woolworths in the same way that Walmart had driven industry transition to ultra concentrates in the United States. In any event, Mr Bellingham's evidence was that Mr Fuchs and Ms Jones did not agree that Woolworths would lead any initiative in Australia as Walmart had done in the United States. According to Mr Bellingham, there was "certainly no commitment that they [Woolworths] would take the Walmart role on at that point in time". June 2008 meetings and communications 178 During June 2008, each of the Suppliers conducted internal workshops or management meetings to discuss their respective plans and proposals in relation to the transition to ultra concentrates. At those meetings, each of the Suppliers appeared to be weighing up the pros and cons of the transition. Importantly, despite what had been discussed in the context of the Accord proposal, there still appeared to be considerable uncertainty concerning the timing of the transition. Each of the Suppliers still appeared to be proceeding on the basis that there may not be any industry-wide transition. Unilever "Fabric Summit" on 4 and 5 June 2008 179 On 4 and 5 June 2008, Unilever held a "Fabric Summit", to discuss, amongst other things, its options for improving its underperforming laundry business. The "action plan" for turning the business around included transitioning Unilever's "Omo" laundry detergent to an ultra concentrate in the second quarter of 2009, and transitioning its "Surf" detergent to an ultra concentrate in the third quarter of 2009. 180 The evidence of Mr Lazell, who attended the meeting, was that there was a lot of discussion at the meeting concerning the benefits of an industry-wide changeover. It was, however, implicit, if not explicit, in his evidence that, at this time, Unilever was not certain that there would be an industry-wide transition. There remained a possibility that Unilever might transition alone. Unilever therefore factored into its business plan the possibility that the transition might result in a 10% reduction in sales growth. Despite this, Unilever appeared to calculate or estimate that the transition would still be beneficial for it because it would achieve greater margins on the smaller volumes and therefore still earn more profit. 13 June 2008 meeting of Cussons and Woolworths 181 On 13 June 2008, Mr Ben Appleby, Cussons' National Account Manager for Woolworths, and Ms Kym Gill, Cussons' Senior Category Development Manager met with Mr Fuchs of Woolworths. Ms Gill's email note of the discussions with Mr Fuchs included the following: Notes from super concentrate discussion with Stan: Super Concentrates - communication is CRITICAL - if Coles change to SC & WW don't it would be disastrous (implement in all accounts at the same time) - concerned about ALDI picking up laundry sales if customers don't buy into SC … - Stan's understanding is that the industry will move to SC in June/July 09 as a category hard change - Colgate's will move to SC liquid in Jan 09 & powder in June 09 - Unit pricing impact – concerned about impact if the whole category does not move to SC at the same time … - Pricing – as there are savings for both – parity pricing 182 As Mr Fuchs did not give evidence, the basis or source of his understanding that the industry would move to "SC" – super or ultra concentrates – in June or July 2009 was unclear. In any event, it would appear from this note that Mr Fuchs, on behalf of Woolworths, saw that there were possible adverse impacts for Woolworths if the "industry" did not "move" together and that Woolworths' preference was for that not to happen. Cussons' ultra concentrate workshop on 16 June 2008 183 On 16 June 2008, Cussons conducted an internal workshop in relation to Project Mastermind and the proposed transition to "superconcentrated" laundry powder. The workshop was attended by, amongst others, Mr Davey, Ms Baldwin, Mr Wilson, Mr Courtier, Ms Gill and Mr Cunningham. Notes of the meeting prepared by Mr Wilson clearly indicated that the discussions at the meeting revolved around the opportunities and risks of the many different scenarios and options that existed in relation to the proposed transition to ultra concentrates. 184 One of the presentation slides prepared for the purpose of the meeting referred to "Industry (ACCORD) agreed initiative" and included the statement: Pursuing an industry initiative enables us [to] capture the MI [margin improvement], and mitigate risk by compelling the consumer to change. However, this merely maintains status-quo, and provides no opportunity in itself to grow market share by being first. 185 Another slide contained an "[a]ctivity [m]ap" which referred to an "[i]ndustry [a]greement". Mr Davey's evidence was that the reference to "industry agreement" was a reference to the Accord proposal. 186 In an email sent following the workshop, Mr Bergmann summarised the main points to emerge from the workshop in the following terms: Thanks for participation in the Superconcentrate LP Workshop. I think that the session can be summarized as follows: • 'Lead the way' with the full range is potentially the highest payback option (MI plus market share growth), but also the highest risk. • The Radiant brand would be the most amendable to being concentrated. • Starting with a sub-range (ie Aquasave-style) is the simplest way to mitigate risk, but is unlikely to convert the consumer. • Pursuing an industry initiative enables us [to] capture the MI, and mitigate risk by compelling the consumer to change. However, this merely maintains status-quo, and provides no opportunity in itself to grow market share by being first. Sarah & I are proposing the following Project Statement and Objectives, and will endeavour to get the NPD1 raised soon. Project Statement: • Introduce Superconcentrate Laundry Powders (2X) into the Australian market by July09. Project Objectives: • Complete Consumer Research to validate concept and how to execute. • Take opportunity of 2X to return RADIANT's 'reason-for-being' based on consumer research. • Lead Retailers understanding of Superconcentrates. • Engage at industry level to define initiative. • Launch first superconcentrate as industry in July09 Any thoughts/feedback before we raise NPD1? 187 Mr Davey's evidence was that he again understood that the reference to "[e]gage at industry level to define initiative" was a reference to the discussions that were occurring through Accord. 188 It seems tolerably clear from Mr Wilson's notes and Mr Bergmann's email that, as at mid-June 2008, Cussons was still uncertain about exactly what its competitors were doing, or likely to do, and was weighing up the respective advantages and disadvantages of pursuing various different options in response to various different potential scenarios. The various different scenarios and options included Cussons "lead[ing] the way" with either a full range transition, or a partial range transition; Cussons fully or partially transitioning with "Full Retailer Support"; and Cussons fully transitioning, or transitioning with Radiant only, along with the "industry". And while Cussons' internal emails and documents refer to an "industry agreement" or "industry initiative", that would appear to have been no more than a reference to the discussions that had taken place through Accord. That was certainly Mr Davey's evidence and there was no sound reason to disbelieve him on that point. There was certainly no evidence of any other agreement between the Suppliers having been reached, or even discussed or contemplated, as at June 2008. Colgate management committee meeting 16 June 2008 189 On 16 June 2008, Colgate's management committee met to consider recommendations concerning the implementation of Ultra – the transition to ultra concentrates. The presentation made to the committee indicated that there were three options: the first was a "[f]ull [t]ransition" in January 2009; the second was a transition of all liquid detergents in January 2009 and all powder detergents in April 2009; and the third was all liquids in January 2009 and all powders in August 2009. 190 The committee was provided with the following "[c]ompetitive [a]ssumptions" to enable it to consider those options: Competitive Assumptions Unilever • Already 100% transitioned to Ultra Liquid • Assumption move to 100% Ultra powder in line with January Category Review • Huge supply chain savings due to NZ manufacturing • Demonstrated willingness to transition with liquids portfolio with significant success Cussons • Already launched 2 Ultra Liquids SKU's • Assumption Cussons replace existing non-Ultra liquids in January • Resistance to transition given poor success of existing Ultra SKU's • Assumption will move all powders with exception of Aquasave to Ultra late 2009 ACCORD Sustainability Charter • Earliest expected final transition date would be late 2009 • Pending ACCC approval • Multi-Company Sustainability taskforce to be set up and timelines agreed • Remains high likelihood not all manufacturers will sign the charter 191 The committee was also provided with information concerning the attitude of Woolworths and Coles to the timing of the transition. It was noted that Woolworths' preference was "to go all in together in line with Category Review". That preference appeared to be linked to logistical issues, including that the transition may require new shelving that would require six months approval. As for Coles, it was noted that it was "[n]ot interested in doing another layout in April- have to be inline with Category Reviews". 192 It would appear that the committee decided to go with the first option: full transition in January 2009. Meeting between Cussons and Coles on 23 June 2008 193 On 23 June 2008, Ms Gill of Cussons met with Mr Schadel of Coles. Ms Gill's notes of the meeting record the substance of the discussion that occurred concerning ultra concentrates: Long discussion had on Super Concentrates. Paul was very please [sic] we were starting this discussion with him as both Unilever & Colgate have already been talking to him. Initial timing given was that at least one would be ready to go in Feb. His preference is for everyone to go at once and further discussion resulted in estimated timing for our competitors of Apr/May09. He alluded that both our competitors were planning to take their entire ranges to super concentrate & this is the direction he prefers. Given the move to SC he expects that the next review will be cancelled & he will wait for the launch of SC. 194 It is fairly clear that, as at the end of June 2008, Cussons understood, based on what its representatives had been told by Coles, that Colgate and Unilever were likely to transition to ultra concentrates in about April or May 2009 and that the preference of Coles was for the Suppliers to "go at once". It should also perhaps be noted in this context that an internal Coles email authored by Mr Schadel some weeks before his meeting with Ms Gill revealed that Coles was already aware that Colgate and Unilever were committed to converting to ultra concentrates by February 2009, that Coles saw the shift to ultra concentrates to be in its interests, and that it saw the benefit in leading the conversion process and thereby gaining a "PR" (public relations) initiative over Woolworths. July 2008 meetings and communications 195 The evidence indicated that as at July 2008, each of the Suppliers was still actively considering their options and capabilities in relation to a transition to ultra concentrates at some time during 2009. They were also actively engaging with the major retailers, Woolworths and Coles, in relation to their plans and options. In the course of that engagement with the retailers, each of the Suppliers appeared to have obtained some information from the retailers which indicated what the other Suppliers were planning. The evidence suggests, however, that each of the Suppliers was still not sure exactly when the others were proposing to launch. 4 July 2008 telephone conversations between Mr Ansell (Colgate) and Mr Campbell (Unilever) 196 On 4 July 2008, Mr Ansell of Colgate had a telephone conversation with Mr Campbell of Unilever. This was one of the Commission's pleaded communications (ASOC [27]). 197 Mr Campbell's evidence was that Mr Ansell had called his mobile phone earlier in the day and that he called Mr Ansell back later in the day. At some stage during the conversation, Mr Campbell said: "Where are you guys at with the launch of concentrated powders next year? We are hearing from Woolworths that we are dragging the chain and that everyone else is ready to go at the end of January". Mr Ansell said in reply: "We would prefer a February launch as we would have everything ready by then, but we could go with a January launch, it just wouldn't be as complete as we would like it". Mr Campbell then said: "Well, we'll have the conversation with them. Our preference is later rather than earlier and that is what we will try and push for". 198 Mr Campbell's evidence was that in this discussion with Mr Ansell he was seeking to obtain reliable information that would assist Unilever about how best to advance the transition to ultra concentrated detergents. He did not suggest that his purpose was to facilitate or make an arrangement or understanding with Colgate. In any event, while it is perhaps not difficult to see why this communication might be significant in any case against Colgate, and perhaps Unilever, it is not so easy to see its probative value in the Commission's case against Cussons. 7 July 2008 internal Unilever email from Mr Campbell 199 On 7 July 2008, Mr Campbell sent an email to Mr Lazell, Ms Moss and others at Unilever. This was one of the Commission's pleaded communications (ASOC [28]). In the email, Mr Campbell reported what he had learnt from Mr Ansell and gave his thoughts about Unilever's preferred launch timing. The email stated: I have heard that Colgate are struggling to meet the Q1 timeline and would prefer a Q2 industry launch. Certainly the retailers would prefer to change their layouts once, rather than twice as the costs are quite prohibitive. Given our concerns below, maybe we are better off telling the trade that our preferred timing is Q2 and therefore get them to change the date of the category review? By the way, I don't think us going earlier will give us a competitive advantage as I understand that Colgate will have something to take to the trade in January if everyone else goes at the same time. 200 Mr Campbell's evidence was that his reference to "Q2" in this email was a typographical error and that he had intended to refer to "month 2" – meaning February 2009. It would appear that Mr Campbell's email, and his typographical error, caused some consternation amongst others at Unilever working on the project. Ms Moss was concerned that Mr Campbell's reference to a potential launch in the second quarter of 2009 would have "resulted in an extension to the deadlines that we were under pressure to meet". Ms Katz's understanding at the time was that "Colgate was working to launch super concentrates in the first quarter of 2009, and we were working very hard at Unilever to launch our super concentrates at that time". Colgate July 2008 internal emails 201 An internal Colgate email dated 15 July 2008 included the following observations: Latest is that Woolworths have effectively 'demanded' we be ready for January - as April has been categorically ruled out. <== is this a sign that Lever is ready to move to 2x on their powders? If we're not ready, what are they going to do? - Woolworths have said – 'the category review date has been published for 2 years now - and it's not moving'. Cussons was never a difficult formula to develop in 'Ultra'. It's dry mix and lower performance. Unilever could be moving at a lower density, or could have utilised some expertise from their European operations… or they could be doing a 'Small & Mighty' on the powders, and deformulating. - We have to assume January is it for everyone, even though Coles are still flagging April. - The plan below is our best option formula-wise regardless of whether we launch in Jan or April. 202 A document circulated internally at Colgate on 23 July 2008 contained a recommendation that, with one exception, Colgate launch all of its ultra concentrated laundry powders by January or February 2009. The exception was the Dynamo brand. The reason that Dynamo was an exception was that Colgate had been experiencing some difficulties in achieving a satisfactory ultra concentrated version of Dynamo. That document also indicated that Colgate believed or understood that Unilever was likely to launch a "deformulated" Omo powder in January 2009, and that Cussons would attempt to launch "outside review" in April or August 2009. Cussons' July 2008 internal emails concerning "timelines" 203 It would appear that at the meeting between Coles and Cussons in June, Mr Schadel had requested Cussons' timing for the release of its ultra concentrates. On 11 July 2008, Mr Stephen Biddlecombe, Cussons' National Account Manager for Coles, sent an email to Ms Baldwin which inquired of her whether she had the exact date for availability of Cussons' ultra concentrates. Ms Baldwin replied in the following terms: the dates we are working towards is presentation to the trade April with stock avails Monday 1st June 09. As discussed please seek out any information from Paul as to Colgate and Unilevers actions so that we can stay on top of their movements. 204 It would seem, however, that by the end of July, Cussons had brought forward its proposed transition date to February 2009. In an internal email sent to various senior Cussons employees or officers, including Mr Fatouros, Mr Freene, Mr Davey and Mr Cunningham, Ms Baldwin provided the following "super concentrate update": this is a FYI email to ensure you are all hearing the one thing (instead of hallway theories). We as a category team have committed to the business that we will deliver project Mastermind (super concentrate), which is a x2 formulation for Radiant and Duo standard supermarket lines - ie up to 5kg packs in time for Feb 09 on shelf dates. This means presentations to the trade in Dec for production of actual stock in Dec / Jan to meet planogram dates. Can you please communicate this plan to your sales accounts and continue to give us all feedback that you are hearing so that we can make informed decisions. I am especially keen to hear about pack size, pricing, level of concentrate, number of washes etc from the trade. I also ask for updates where known to presentation dates, new line cut off dates (for paperwork) and actual stock availability dates so that we can ensure timeline is managed to deliver. The size of this project is significant and therefore so too is the risk so it is imperative that this is a GOLD star launch with all the bells and whistles. Faster, better and stronger than AquaSave! There will be follow meetings called for discussions around variety, pharmacy, and alternative channel products in due course. In the meantime any questions sing out (Emphasis added.) 205 Mr Davey's evidence was that he could not remember receiving or seeing this email at the time it was sent. He was nonetheless cross-examined at considerable length about what he thought was meant by the request for "feedback". He said that he thought that Ms Baldwin was requesting feedback from the retailers ("the trade") about Cussons' proposed pack size, pricing, level of concentrate and number of washes. He disagreed that it meant feedback about the other Suppliers' products. His evidence was that it "would be quite normal for PZ Cussons on a product change or a new product introduction to communicate that to the customer, to the retailer to get their feedback as part of … engaging the retailer". 206 Mr Freene and Mr Wilson were also cross-examined about Ms Baldwin's email of 22 July. Mr Freene said that he thought that the customer managers were being asked to provide "any trade information that may come through from our wholesaling partners". That might include information received from the retailers about Cussons' competitors' plans. Mr Wilson initially said that he did not recall what his understanding was at the time, however he then said that he understood that the request was for "[a]ny trade intelligence" that might include the plans of Cussons' competitors, as well as the retailers' plans. His evidence was that the retailers "did often give us their opinion" and that they "would share what they thought we should do based on their requirements". 207 The Commission submitted that Mr Davey's evidence concerning this email was implausible, if not absurd. In the Commission's submission, Mr Davey's evidence about this email tended to show a willingness to give answers that he perceived to be advantageous to Cussons' case and to refuse to give proper concessions that might harm its case. This evidence was one of the two examples given by the Commission in support of its submission that the Court should only accept Mr Davey's evidence when it was corroborated. 208 That submission is rejected. Mr Davey's interpretation of the email was not so untenable as to cast any real doubt on his credibility as a witness, particularly in circumstances where, perhaps not surprisingly, he did not recall receiving or seeing the email at the time it was sent. While Mr Davey's interpretation of the email differed from Mr Freene's and Mr Wilson's, it does not follow that their interpretation was necessarily correct, let alone that Mr Davey's was absurd. 209 In any event, ultimately not a great deal turns on precisely what Ms Baldwin meant by the request for feedback. Even if it did mean that Ms Baldwin was asking Cussons' customer managers to provide feedback or "trade intelligence" from the retailers which might include information about Colgate and Unilever's plans, that would not be particularly probative of whether Cussons had reached or arrived at, or planned to reach or arrive at, an arrangement or understanding with either or both of Colgate or Unilever about the transition. Indeed, on one view, the fact that Cussons might have been seeking trade intelligence about its competitors' plans would tend to suggest that it had not reached or arrived at any arrangement or understanding. If it had, it would have been unnecessary for it to seek out such information from Woolworths or Coles. 23 July 2008 email from Accord to Colgate, Cussons and Unilever 210 On 23 July 2008, Ms Capanna of Accord sent an email to Colgate, Cussons, Unilever and others. The email contained what was said to be "draft outcomes" of the meeting held on 30 April 2008. That evidence concerning the meeting was referred to earlier, as was Ms Capanna's "draft outcomes". 211 The email also stated that a revised draft proposal based on the discussions at the meeting had been prepared and sent to Colgate, as the originator of the proposal, for its review and comment. It was, however, noted that Accord's lawyers had recommended that the draft proposal be reviewed by them prior to circulation to member companies. It would seem tolerably clear that Accord's lawyers wanted to ensure that the revised proposal did not raise any potential competition law issues or concerns. 24 July 2008 email from Cussons to Accord, Colgate and Unilever 212 On 24 July 2008, Mr Fatouros of Cussons sent a reply to Ms Capanna's email. The reply email was also sent or copied to Ms Moss of Unilever, officers of Kao and Amway, Accord's lawyers and officers of Colgate. In the email, Mr Fatouros said as follows: Dear Bronwyn, Indeed the update was useful. There seems to be significant traction (and gaining momentum) in this area, with the major retailers. I strongly feel we have a collective industry opportunity to shape the market's direction towards a more all round sustainable future BUT we need to do so with a sense of urgency and coordination, which I believe is very much up Accord's alley! It is therefore important to swiftly review the proposed draft and thereafter, under Accord's auspices, have a transparent and inclusive but also pragmatic and results oriented steering team from key manufacturers to nut out consumer, commercial, legal, technical aspects etc, so that we make things happen sooner rather than later without compromising either integrity or voluntary nature of the initiative. Happy to have further feedback, George. 213 Ms Moss, who received the email, said in her evidence that she did not interpret the email as suggesting any change in the position that Mr Fatouros had taken at the Accord meeting. Ms Moss said that Accord often took a long time to take any action, and she interpreted Mr Fatouros' email as meaning "just get on with it", though in polite terms. 214 The Commission appeared to contend that this email supported the inference that Mr Fatouros was in some way implicated or involved in causing Cussons to enter into the alleged arrangement or understanding with Colgate and Unilever. It submitted that such an inference could more easily be drawn because Cussons did not call Mr Fatouris to explain this email, or otherwise give evidence concerning his dealings with the other Suppliers in the context of the Accord proposal. In fact, the Commission appeared to contend that this email was direct evidence that Cussons was a party to the Withhold Supply Arrangement. 215 The Commission's submissions in that regard are addressed in detail later. It suffices to note at this stage that they have little or no merit. In that email, Mr Fatouris seemed to be saying little more than that Accord had a useful role to play in relation to the industry shift to ultra concentrates, but that there was much work to be done to develop and refine the initiative. That appeared to be how Ms Moss interpreted the email. Perhaps more significantly, the nature of the "collective industry opportunity" referred to by Mr Fatouros was, to say the very least, somewhat unclear. The very fact that the "draft" had to be referred to a "steering team" suggested that the detail and mechanics of the initiative, whatever it was, had not yet been fully developed, let alone agreed. And, as will be seen, ultimately the Accord proposal went nowhere, so it is hard to see how that email somehow implicated Mr Fatouros in any relevant sense. Cussons' Project Mastermind NPD Business Case – 28 July 2008 216 On 28 July 2008, Ms Baldwin sent an email to Ms Michelle Noisette, copied to Mr Bergmann, which attached a document titled, "NPD Business Case". Mr Davey's evidence was that Ms Noisette had previously worked for Cussons and had been re-engaged by Cussons to manage the Project Mastermind process. Cussons had in place a system pursuant to which the business case for projects were presented, developed and approved (or not approved, as the case may be) by reference to documents known as "NPD" documents. NPD documents contained information about the nature and objectives of the project. Projects had four stages or "gates" through which they had to proceed. The first gate, NPD1, was the proposal to develop a prototype; the second gate, NPD2, was the proposal to approve major capital expenditure; the third gate, NPD3, was a proposal to launch the new product; and the fourth gate was review of the project. Each of the NPD documents ultimately went to the Cussons' board for approval. 217 The NPD document that Ms Baldwin sent to Ms Noisette and Mr Bergmann in late July 2008 was a NPD1 in respect of Project Mastermind. It described Project Mastermind as "a project to super concentrate current powder formulations to a x2 level". It stated that the project involved "a hard change over for all lines (complete replacement of entire grocery ranges for both brands) – execution is critical to the business achieving the desired goals otherwise risk to business is significant". In a section of the NPD headed "Marketing Mix Review", the following statement is made under the subheading "Situation Analysis – Category, Segment, Brand & Competitor Review": Complete hard change over for all products and brands in the upcoming grocery range review – December presentations for January manufacturer and on shelf availability February 2009. Retailers are driving timing based on collaborative advice and agreement to launch between Colgate, Unilever and PZC. Retailers are also driving the hard change over – consumers will need to come on this journey otherwise the impact will be felt category wide. (Emphasis added.) 218 Needless to say, the Commission placed considerable reliance on the emphasised portion of this statement in the NPD document. 219 Copies of this NPD document were sent to members of the Cussons board of directors on 12 August 2008, in advance of a board meeting that was to be held on 21 August 2008. The evidence concerning the NPD document, and the 21 August 2008 board meeting, is discussed further in that context. 30 July 2008 meeting of Unilever and Woolworths 220 On 30 July 2008, a fairly high level meeting was held between representatives of Unilever and representatives of Woolworths in relation to Unilever's proposed ultra concentrated range of laundry detergents. Mr Fuchs was one of the Woolworths attendees. The Unilever attendees included Mr Basha, Mr Bellingham and Ms Katz. 221 A document purporting to be minutes of the meeting prepared by Mr Bellingham records the following under the heading "Powder Concentration": Powder Concentration • Critical that the changeover to "super-concentrates" is managed in a consistent manner across all manufacturers: a) Peter Campbell to discuss with James Aylen how best to tackle communication between manufacturers i.e. using Accord, with the goal of achieving a way forward on industry collaboration for the benefit of the consumer. b) In the interim, Stan to meet with Colgate & Cussons to discuss "state of play" and provide generic feedback to all manufacturers (to ensure consumers are not confused with multiple different approaches to powder concentration) – key areas of focus are; Launch timing, on pack communication of washes, pack sizes. • Unilever powder "super concentrate" current launch plan: 1. Omo & Surf Small & Mighty Powder packs to be in 500g, 1kg and 2kg; stock available 26th January, 2009 2. Omo WW's exclusive pack (850g) to replace the 1.7kg exclusive line available w/c 2nd March 3. Drive super concentrate (1kg or 1.5kg) also available w/c 2nd March Issues to resolve: a) Timing of Omo exclusive pack and Drive different to core range & do not meet current review schedule. b) Changeover planning required re: carton sizes / rundown of deleted lines. c) Unilever currently plan to have "old" Omo & Surf in Variety channels. Action to review this approach and also let WW's know the current existing mix of products in retail channels. d) Number of washes on pack needs to take into account the different machine sizes available in today's market • Opportunity to build on Small & Mighty liquid activation and develop a joint activation around the "sustainability" platform 222 A meeting of Unilever's Homecare Leadership Team (HCLT), the members of which included Ms Katz, was held the following day, on 31 July 2008. It would appear that someone gave a report to that meeting concerning the 30 July meeting with Woolworths. The minutes of the HCLT meeting include the following: Woolworths Strategy Meeting - WOW surprised that all Manu not aligned through ACCORD - Expectation that total world was going to super concentrates (inc Drive) - Clear expectation around 875g needs to be part of the mix. - Expectation that we can hit wk 4. If to change, PC and SL to engage WW top to top. - 2 bays to come from Laundry - Key KPI for Woolworths will be share – Input for AP planning in 2009. (Emphasis in original.) 223 The evidence of both Ms Katz and Mr Bellingham concerning this meeting was, regrettably, far from clear. That is perhaps understandable given the effluxion of time. Ms Katz appears to have been unable to add anything to what was recorded in Mr Bellingham's minutes and the report given to the HCLT meeting. Mr Bellingham's recollection of what was said at this meeting was also poor. Mr Bellingham's evidence was that Unilever attempted to emphasise to Woolworths the importance of there being a simultaneous changeover to ultra concentrates so as to avoid the risk of consumer confusion. In that regard, Unilever attempted to persuade Woolworths that it should perform a role similar to that which had been assumed by Walmart in the United States. In response, Woolworths expressed surprise that the Suppliers were not already "aligned" through Accord. Woolworths' expectation had been that the "total world" was going to ultra concentrates. 224 It would appear that Unilever also told Woolworths that it was not intending to convert its "Drive" brand detergent to an ultra concentrate at the same time as its other brands. Mr Bellingham's evidence was that Woolworths' response to that advice was to make it clear that it did not want to purchase standard concentrates from Unilever once it had transitioned. If Unilever was unable to ensure that Drive met the changeover schedule, Woolworths said that it would not continue to buy that brand and it would be "de-ranged" until the "Q3 review" [July/August 2009]. 225 In his evidence, Mr Bellingham was unable to shed any real light on what was said and by whom in relation to Mr Fuchs providing "generic feedback to all manufacturers". He said that he did not expect feedback from Woolworths on what either Colgate or Cussons was doing. Rather, he wanted Woolworths, at some stage, to tell all the Suppliers that it wanted to "do concentration" on a particular date and to "make sure you're doing it". That was his understanding of what was meant by Woolworths doing what Walmart had done. In other words, he wanted Woolworths to effectively compel each of the Suppliers to transition on a particular date. Mr Bellingham's evidence was that there was nothing said at this meeting about what Unilever's competitors were doing in relation to the transition. 226 It should also be noted that Mr Bellingham's evidence was that, after the meeting concluded, he had a brief conversation with Mr Fuchs during which Mr Fuchs told him that Unilever's plans were too conceptual compared to its major competitor. Mr Bellingham understood that to be a reference to Colgate, but he did not seek any information from Mr Fuchs about Colgate's or Cusson's plans. 227 An internal Unilever Project Faster update prepared in early August 2008 also outlined Unilever's understanding of the position being taken by Woolworths. It recorded, amongst other things, that Woolworths wanted "all brands to move to super-concentrates from Q1 to ease consumer confusion and reduce shelf space without requiring rationalisation" and that Unilever should have an ultra concentrated version of Drive ready for the "Q1 review date" or it would be "de-ranged" by Woolworths until the "Q3 review" [July/August 2009]. The update recorded, in that context, that it was therefore "critical to include Drive in the mix". The update also included the following notes under the heading "STT [ship to trade] timing": - Still aiming for week 4 STT date in Australia (excl. Omo 850g) … - Lower risk (about half) if delay AU STT until week 10. - Should get an indication this week whether the AU STT date can be moved following WW meetings with competitors. Pushing the STT date out may require top to top discussion. 228 It would thus appear that Woolworths had made it abundantly clear to Unilever that it expected Unilever to convert all its brands to ultra concentrates, that it would not continue to purchase Drive if it remained in a standard concentrate format, and that the launch or transition would occur in February 2009. For its part, Unilever wanted to push out the launch date, but that might require a "top to top" meeting between Mr Campbell and Mr Aylan. 31 July 2008 meeting between Colgate and Woolworths 229 The day after their meeting with Unilever, Woolworths representatives, including Mr Fuchs, met with Colgate in relation to the transition to ultra concentrates. An internal Colgate email records that "[b]ased on WW [Woolworths] feedback, we are currently better prepared than our competition". Minutes of the meeting prepared by a manager at Colgate record that Woolworths, presumably Mr Fuchs, discussed the "option" of the Suppliers working together in relation to planograms, joint advertising and point of sale communication. August 2008 meetings and communications 230 There were numerous meetings and communications concerning the transition to ultra concentrates between the individual Suppliers and the retailers, in particular Woolworths, during August 2008. Woolworths' preferences and expectations concerning the launch were becoming clearer and it was making them known to the Suppliers. In that context, there was some contact between Colgate and Unilever, and Unilever attempted to obtain some information from Cussons about Cussons' plans. There was also a further meeting of Accord. 1 August 2008 - Woolworths "update" provided to Cussons 231 On or shortly before 1 August 2008, it would appear that Mr Fuchs contacted Mr Appleby of Cussons and provided him with a "super concentrate update". Ms Gill conveyed the substance of that update to other Cussons employees by email sent on 1 August. That email stated: Super concentrate update just in from WW (via Ben): 1. Unilever & Colgate both talking 500g & 1kg pack sizes 2. Both looking at around 60g scoop size 3. Both actively looking at ways to communicate/have 2x concentrate message on pack 4. WW (Stan) looking to bring range review forward to October 08 - does not expect final 'paperwork' etc but looking for mock-up samples/pricing direction etc - wants time to plan for the changeover so actual implementation timing likely not to change 5. Pick-slot management will be critical to changeover - suggest Matt McMillan attend WW Workshop now confirmed for 25th August Cussons and Coles ultra concentrate "workshop" on 5 August 2008 232 On 5 August 2008, Cussons and Coles conducted a workshop concerning the launch of ultra concentrates. Mr Schadel attended on behalf of Coles. Ms Gill and others attended on behalf of Cussons. The notes of this workshop prepared by Cussons record that Mr Schadel gave Cussons the following information concerning Coles' objectives for the ultra concentrates launch: • Over the next two weeks he is meeting with suppliers in similar forum, and will be taking information back to CGL for internal planning • His objective is to have CGL take a leadership role in the market (outtake: and for laundry (Paul) within the CGL business to take a category leadership role of sustainability improvement) • Sees this as an opportunity to rebuild the category entirely 233 In relation to "[s]helf management impact", it would appear that Mr Schadel advised Cussons that the change to ultra concentrates was "[p]roposed as a hard change for all suppliers". Telephone calls by Mr Campbell (Unilever) to Mr Ansell (Colgate) on 7 August 2008 234 On 7 August 2008, Mr Campbell of Unilever telephoned Mr Ansell of Colgate. This is one of the Commission's pleaded communications (ASOC [32]), though it did not involve anyone from Cussons. Mr Campbell's evidence was that he telephoned Mr Ansell because he wanted to find out what Colgate's position was on "washes on pack" and its preferred timing for the launch of ultra concentrates. Mr Ansell told Mr Campbell that Colgate could launch in January 2009 if required, but it would prefer February 2009. Meetings between Colgate and Woolworths on 8 and 11 August 2008 235 On 8 August 2008, Mr Ryan of Colgate met with Mr McCarry of Woolworths. The notes of that meeting, which appear to have been prepared by Mr Ryan, include the following under the subject heading "Industry Initiative Status": Brad was keen to know where the industry initiative approach was at with ACCC / Accord etc. I responded that it appears that this is going slow and that they need their own plan to make it work, I also said that we are the best placed supplier to make it work with them given our size & brands. (He did make the comment that apart from Omo Colgate are the only ones with brands that mean anything, he also conveyed his thoughts that Liquids users are more loyal & a more knowledgeable consumer – so that was good to hear) So what is the official answer to this Accord status? We need to consider what the Ultra message will end up looking like between retailers are we aiming for consistency? What will we pay for / not pay for? In Stan's communication yesterday he quotes "It is my understanding that all vendors will be changing over to super / ultra concentrates in line with our next laundry review (in store 11/02/2009)" Does this mean Unilever are calling their product "Super Concentrate", what does this mean as far as in-store communication of a Category move? 236 In relation to "Project Next Steps", the notes recorded: Woolworths have meet [sic] with Unilever (& us), and are meeting with Cussons next week. After that they will form a working group that Brad is already coordinating (so that objective is happening). … 237 Another meeting between Colgate and Woolworths took place on 11 August 2008. That meeting was attended by Mr Ansell, Ms Tina Stoian, who was Colgate's Customer Service and Logistics Director at the time, and Mr Ryan of Colgate, and Mr Naum Onikul and Mr Aylen of Woolworths. Colgate's presentation to the meeting included a slide which stated: "Detergent change over is significant in size & opportunity. Will require additional resources from Woolworths and Colgate". Draft notes of the meeting prepared by Woolworths and circulated by Mr Ryan for feedback included the statement: "Ultra Conversion for detergent Category – major opportunity requiring major resource focus by Woolworths & Colgate (& all suppliers)". Mr Ansell reviewed the minutes prepared and noted "I would not reference other suppliers". The final version of the minutes did not include the words "(& all suppliers)". 11 August 2008 telephone call by Mr Ansell (Colgate) to Mr Campbell (Unilever) 238 The Commission relied on the agreed fact that Mr Ansell of Colgate telephoned Mr Campbell of Unilever on 11 August 2008. The duration of that call was just under two and a half minutes. There was no evidence about what was discussed. It is unclear how this agreed fact advanced the Commission's case in any material respect. 11 August 2008 email from Mr Fuchs of Woolworths to "all vendors" 239 On 11 August 2008, Mr Fuchs of Woolworths sent an email to all of the vendors who supplied Woolworths with laundry products. It was received by, relevantly, Mr Russell of Colgate, Mr Appleby of Cussons and Mr Bellingham of Unilever. The email stated: G'day All, This is a generic e-mail being sent to all of the laundry vendors. It is my understanding that all vendors will be changing over to super / ultra concentrates in line with our next laundry review (in store 11/02/2009) If this is not the case please can you let me know as soon as possible in order for us to plan this changeover project? Please can you also let me know if you will be selling regular and concentrate laundry powders into any other channels? Attached, please find a spreadsheet for you to enter all the new dimensions as we will need to do a few POG mock ups 240 The email attached a spreadsheet entitled "Ultra Detergent Pack Dimensions.xls". 241 Mr Appleby forwarded the email to other Cussons employees, including Ms Baldwin, Mr Wilson, Ms Noisette and Ms Gill. 242 Mr Russell of Colgate also forwarded a copy of the email to other Colgate employees. In his forwarding email he stated "The ball is rolling". 243 As for Unilever, Mr Bellingham's evidence was that this was the first definitive communication that he had received that all the vendors were changing over. 244 As for Cussons, Mr Wilson appeared to have assumed that the email related to the February 2009 major review and amounted to a request by Mr Fuchs for assistance in relation to planograms. His evidence was that Mr Fuchs would normally only seek assistance with planograms once the range review had been concluded, but that "this range review was unusual because it involved a change to all of the shelves in the laundry category". The email also confirmed to Mr Wilson that "Woolworths' preference was to change all laundry powder SKUs to super concentrate" and also confirmed his "assumption that Colgate and Unilever intended to change their entire range". 245 The Commission placed some considerable reliance on this email from Mr Fuchs. It was one of the Commission's pleaded communications (ASOC [36]). The Commission appeared to contend, based on the internal Colgate email sent by Mr Russell, that this was some form of intentional "signalling" communication from Mr Fuchs, or somehow evidenced that the Suppliers had, through him, agreed to the timing of the changeover referred to in the email. It is, however, difficult to see how it could be inferred against Cussons that the email was anything other than a unilateral communication from Mr Fuchs seeking to confirm what he had learnt from his individual meetings with the Suppliers so that he could plan for the changeover from Woolworths' perspective. That is how Mr Wilson interpreted it. There was no evidence to suggest that anyone else at Cussons interpreted it in any other way. Mr Fuchs did not give evidence. Meeting between Unilever and Woolworths on 12 August 2008 246 On 12 August 2008, Mr Fuchs and others from Woolworths met with Mr Bellingham and others from Unilever. The minutes of that meeting record the following under the heading "Powder Concentration": • Discussed potential for March roll-out, Stan to meet internally at Woolworths to align plans and gain project resource • Unilever to complete pack size sheet ASAP to allow shelf work to begin • State by state clearance plan option to manage run-out of "old" stock • Stan to collate all plans / ideas and distribute. Unilever to send thorough [sic] any thoughts / ideas as they come. 247 In relation to the very last dot point of those minutes of the meeting, Mr Bellingham's evidence was that he did not recall whether or not Mr Fuchs specifically said "I will get ideas from Colgate and Cussons and send them out". His evidence was: The discussion was no-one had done this before so we need to all put our collective heads together to work out, from an operational point of view, how to do it. So we were trying to figure out the best way to do it. So I would send through any thoughts and if he had any processes or insights that he would do the same. And frankly, I didn't care or he didn't care whether that came from Colgate, Unilever, Cussons or Woolworths or anyone else, the tea lady. It was, you know, are there any good ideas, because this was an operational execution aspect of the launch. It wasn't about, you know, who had the idea or who didn't have the idea. 12 August 2008 email from Mr Fuchs of Woolworths 248 On 12 August 2008, Mr Fuchs of Woolworths sent another email to all laundry detergent vendors. It was received by, amongst others, Mr Russell of Colgate and Mr Appleby of Cussons. The email stated: G'day All, We have had our QA dept look at the cost of ultra concentrate laundry powders. The key product costs as we understand it is STPP 16.3% Soda ash 25.9% Sodium sulphate 26.5% Las (Dobanic acid) 8.4% Assuming that there will be parity pricing with the new super concentrates and the old concentrates, it looks like we will be able to have fully funded deals, where the vendor will still make more money than what they are currently making. In my costing model for the changeover I am making the assumption that all deals will be fully funded at the time of transition. Thanks Regards Stan 249 This was another one of the Commission's pleaded communications (ASOC [37]). It is unclear how it advanced the Commission's case, beyond the fact that it was another instance of Woolworths communicating with all the Suppliers. Meeting between Unilever and Coles on 12 August 2008 250 On 12 August 2008, Ms Katz and others from Unilever met with Mr Schadel and others from Coles. The presentation given by Unilever indicated that its preferred date for the transition to ultra concentrates was March 2009. The notes of the meeting record that Mr Schadel's response was that Coles would be happy to convert to ultra concentrates at any time in the first quarter of 2009 as long as Coles' competitors converted at the same time. 12 August 2008 internal Cussons emails 251 On 7 August 2008, Mr Appleby of Cussons sent an email to Ms Baldwin and others at Cussons, including Mr Coghlan, which attached a document sent to him by Mr Fuchs containing a "rough view" of the layout of Woolworths' laundry shelves if not all the Suppliers changed to ultra concentrates, or if the Suppliers maintained current concentrate powders in "[v]ariety channels" or "[m]ass [m]erchants" such as Big W. Ms Baldwin replied to Mr Appleby's email and raised a number of queries which related to the launch of ultra concentrates in the variety channels. Ms Baldwin indicated that her intention was to delay the launch in the variety channels until "their next review post the launch in grocery which is November 09 – a delay on shelf of at least a year until Feb 10". Mr Coghlan responded to Ms Baldwin's email and reported the following concerns he had about the launch of ultra concentrates in the variety channels, including Big W: My concerns are: - if the whole industry is communicating a change to super concentrates, then they (Mass Merchants ) are only going to confuse consumers if they maintain ranging of standards - the Supermarkets will be very concerned with pricing per kg, if Mass merchants maintain concentrates and don't move, they feel they will be uncompetitive in the eyes of the consumer, hence Stan has indicated that he may want to range concentrates to be seen as competitive - Supermarkets currently feel that that [sic] they are losing consumers to Mass Merchants based on price per kg offers - If Big W range both super and concentrates, they will confuse their own shoppers. 252 Ms Baldwin replied in the following terms: I totally agree with your concerns BUT I don't believe Big W will move and as a result I don't want to be in a position like we were with the move from bag to box and again with concentrate liquids where we did the right thing and Colgate (in both cases) did not in the same time frame, and thereby gained a competitive advantage and significant share of shelf as a result. Also in both cases they were not penalised for not changing / delaying changing either – a threat that did not eventuate. I wish you luck for your chats with Big W but if they don't give iron clad agreement that all manufacture[r]s are moving all lines then I think we need to review our position and work out what is best for PZC overall. … 253 The Commission appeared to place considerable reliance on this email. In particular, it seized on Ms Baldwin's reference to an "iron clad agreement" in this email. This was, however, a clear example of the Commission simply grasping at any reference to an agreement in any document without regard to the context. This email did not involve what Cussons would or would not supply to Woolworths, Coles or Metcash, who were the retailers the subject of the alleged Withhold Supply and Aligned Transition Arrangements. It concerned Big W, which was considered to be a variety or mass merchant store, not a supermarket. It appeared to relate to concerns that Mr Appleby had about the confusion that may be caused if the supermarkets completely transitioned to ultra concentrates, but the variety stores and mass merchants did not and continued to stock both standard and ultra concentrates. And, most significantly, read in context, Ms Baldwin's reference to an "iron clad agreement" was clearly a reference to Cussons receiving an assurance or agreement from Big W, not Cussons entering into an agreement with the other Suppliers. Considered in the context of the evidence as a whole, this email exchange was of little, if any, significance. August 2008 communications between Unilever and Woolworths 254 Following the 12 August 2008 meeting between Unilever's and Woolworths' representatives, Mr Bellingham and Mr Fuchs continued to communicate about, amongst other things, the timing of Woolworths' roll out of ultra concentrates. On 14 August, Mr Bellingham emailed Mr Fuchs a copy of the minutes of the meeting of 12 August. Mr Fuchs responded by email stating "[t]he POG [planogram] will still be due to stores 09/02/2009 what we will potentially look at, is to roll out the POG over a few weeks state by state". This appears to have been a response to Unilever's preference for a March roll out. 255 Later that day, Mr Bellingham sent an email to Ms Katz, Mr Basha and others at Unilever noting that he had told Mr Fuchs that Unilever's strong preference was for a March roll out. He concluded the email by stating: "I believe we require a joint approach from all manufacturers in order to push for a delay to March". Mr Bellingham noted in that regard that: "The Accord proposal seems too far away and slow, what else can we do here?" 256 Ms Katz responded to Mr Bellingham's email in the following terms: As I mentioned to KB today I think we need to take the review date beyond Stan - as everyone ie us, Colgate and Cussons and Coles are all communicating a preference for March – I do understand that this does not suit WW- but with a mammoth change more time should result in better execution….I do understand that this does result in issues for WW with moving the rev. date….however in the session the other week Brad did suggest it was not off the table. Pls understand that hitting the wk 4 date is not a matter of resource - it is a simple matter that there is not enough weeks between now and then to get it done. Resource is not the problem. 257 In her oral evidence, Ms Katz said that she did not recall the source of the information about Cussons communicating a preference for March, however she agreed that she did not have any information from Woolworths about Cussons' preference. 258 On 19 August 2008, Mr Bellingham sent another email to Mr Fuchs in an endeavour to persuade him that a March roll out was preferable. Amongst other things, Mr Bellingham said that all the manufacturers would be ready to go in March "for consistency". In his oral evidence, Mr Bellingham said that this statement was not based on information he had received about the other Suppliers. 259 On 21 August 2008, Mr Basha attended a Woolworths conference. While at the conference, he spoke with Mr Fuchs and raised the topic of deferring the changeover to ultra concentrates. Mr Basha's evidence was that he said "it seems a delay of the review would be beneficial for everyone". Mr Fuchs indicated that Woolworths might be willing to consider moving the changeover date to week 10 of 2009 and said words to the effect of "[o]kay, we'll see what we can do". 260 On 26 August 2008, Mr Bellingham sent an email to Mr Fuchs. This email, which was one of the Commission's pleaded communications (ASOC [43]), was a response to Mr Fuchs' email of 11 August. In the email, Mr Bellingham identified the following "[k]ey [p]oints" concerning the transition to ultra concentrates: 1) Unilever confirmed stock availability to order for the ultra concentrate range w/c 16 February, 2009. Ideally P.O.G to store date would be 2 weeks following on March 2nd, 2009. 2) Unilever will only produce ultra concentrate liquids & powders for the Australian retail market i.e. Variety stores will not have Std powders. 3) Pack sizes as per outlined below and old/new pack dimensions are attached. (Emphasis in original.) 261 As indicated, the email also contained detailed information concerning Unilever's final pack dimensions. Mr Bellingham's evidence in cross-examination was that his purpose in providing the pack dimensions was to help Woolworths prepare its planogram, not to communicate with Colgate and Cussons. 262 This series of emails indicate that, by August 2008, Woolworths was telling Unilever that it proposed to launch the new ultra concentrate lines as part of its February 2009 major review. Unilever, however, considered that it might have difficulty meeting that timeline in respect of all its brands, and was trying to persuade Woolworths to delay the launch until March 2009. In that context, Unilever was suggesting to Mr Fuchs that a delay until March 2009 would suit all the Suppliers. There was, however, no evidence that Cussons was involved in those communications, or had conveyed to Unilever, or Woolworths, that it wanted the launch date pushed out to March 2009. There was no evidence that Cussons in any sense colluded with Colgate or Unilever to get Woolworths to delay the launch. August 2008 communications between Colgate and Woolworths 263 Like Unilever, in mid-August 2008 Colgate was giving anxious consideration to the timing of its transition to ultra concentrates and whether it could meet Woolworths' expectations or requirements in that regard. 264 On 18 August 2008, Mr Ansell sent an email to Mr Ryan regarding Woolworths' position on the launch date for ultra concentrates. That email said: Can we confirm we are oK [sic] for 1 March They were to respond on Friday Coles is OK for 1March [sic] and we believe competition prefers 1 March Do you want me to call James ? Need an answer this morning But we need March 265 Mr Ryan forwarded that email to Mr Russell with the request: "can you get an update from Stan & press him on if they have discussed with James?". The reference to "James" was no doubt a reference to James Aylen, who was senior to Mr Fuchs at Woolworths. It would appear that Mr Russell was representing Colgate at a Woolworths "perishables" conference that day. 266 Mr Russell spoke to Mr Fuchs as requested. Mr Fuchs' response was recorded in an email Mr Russell sent to Mr Ryan on 18 August which stated: I have spoken to Stan who has just arrived up in Brisbane…. At this stage, as far as he is concerned, the transition should occur in January as Unilever only have 2 products that they cannot transition and he has said that he won't range them on this basis. 267 On the same day, Mr Ryan forwarded Mr Russell's email to Mr Ansell and said: Here is situation in Woolworths with-out intervention? Looks like Unilever is almost ready. I think we should just go with what we are currently planning which is Jan. 268 Mr Ansell responded, again on the same day, as follows: We are not ready and the reason on the top to top which was understood was the timing was bad due to holidays I am happy to call James Lets [sic] talk tomorrow We will execute so much better if we can push back We also have great outcomes we must leverage further 269 On 25 August 2008, Mr Ryan spoke with Mr McCarry of Woolworths. Mr Ryan reported that conversation to other officers in an email sent the same day. The email stated: I spoke to Brad McCarry today (who was at home sick). He said he had spoken to James, his recommendation to James was to stick to planned dates, but he also said to me he with [sic] go with James [sic] recommendation. Earlier in the conversation he did make the comment that if people are not ready, he said it was just bad luck for them (I mentioned that we had been told by Stan Unilever may miss a couple of products). I said shipping later was about missing a key period & lowering risk. Brad is still working out how to do this transition in Woolworths, they are meeting Cussons today (?), Brad I think is catching up with Cussons later this week, his head is currently at transition some states earlier than others to manage the SOH clearance risk / expense for Woolworths (& Colgate). So on the 1st March ship he said he was thinking WA, SA & TAS 16th Feb & then 2 weeks after that QLD & VIC & then NSW the week after that. He really is just looking at idea's [sic] at present. I mentioned that we to [sic] had considered a state by state transition but he would need to consider what he thought about competitors having slightly different transitions, which I played down to him. I am likely to catch up with him this week for breakfast & discuss this further with him, so I will gather my own thoughts & submit to you guys to know what we would consider. (Mark, I would love to take in some of the Agency feedback we got to start shaping his opinion & show leadership) TO CLARIFY ON SHIP DATE - given the conversation I have had w/c 16/2 in WA & SA is what Woolworths are saying today & then eastern seaboard 2nd March. This is without talking to some competitors. 270 Those emails suggest that, like Unilever, Colgate was concerned about whether it could make Woolworths' proposed February launch date and wanted to persuade Woolworths to delay the launch until March 2009. There was, however, again no evidence that Cussons was involved in those communications or any collective effort to persuade Woolworths to shift the date. 19 August 2008 – Mr Basha (Unilever) calls Ms Gill (Cussons) 271 On or about 19 August 2008, Mr Basha of Unilever called Ms Gill of Cussons. Mr Basha's evidence was that he and Ms Gill were friends, having worked together at Unilever in 1998. Mr Basha's purpose in calling Ms Gill was to see if Cussons needed more time to launch ultra concentrates. Mr Basha's evidence was that, at the time of the call, he had no information available to him "about what Cussons was doing or when it might be doing it". 272 During the telephone conversation, Mr Basha said to Ms Gill: "A lot is happening at the moment with compaction. How are you guys going? We are struggling to meet the timing. Are you guys ready?". Mr Basha's evidence was that Ms Gill "responded to my questions vaguely and did not disclose anything about Cussons' plans". Mr Basha said that he had the impression that Ms Gill was uncomfortable discussing the topic and that he quickly stopped the conversation on that issue. Mr Basha did not tell Ms Gill anything else about Unilever's plans. In his evidence, he said that he regretted making the call and appeared to accept that at the time he knew it was improper. 273 This was one of the Commission's pleaded communications (ASOC [38]). On just about any view, however, it does not support the Commission's case in any respect. It suggests that by mid-August 2008, Unilever did not have any clear idea about Cussons' plans and preparations for the transition to ultra concentrates. Equally, it indicates that Ms Gill was unwilling to discuss Cussons' plans with one of its competitors. 21 August 2008 - Mr Campbell (Unilever) calls Mr Courtier (Cussons) 274 On or shortly before 21 August 2008, Mr Basha asked Mr Campbell to speak with Mr Courtier of Cussons. Mr Basha made this request because he had been trying to find out information about Cussons' launch timing plans but had "exhausted [his] lines of enquiry without success". At least that is what he told Mr Campbell. Mr Campbell called Mr Courtier as requested. 275 Mr Campbell knew Mr Courtier because Mr Courtier had previously worked with him at Unilever. Mr Campbell's evidence was that he commenced the call as a social call. He did so as a tactic to lure Mr Courtier into giving him some market intelligence. Towards the end of the call, he said to Mr Courtier: "One thing before I go, there is all sorts of conflicting information about when you guys are launching your ultra concentrates. Is it January or February? Our preference is February". Mr Campbell could not recall specifically what Mr Courtier said in response, but recalled that he indicated that a February launch would suit Cussons. In cross-examination, Mr Campbell agreed that his evidence that Mr Courtier indicated that a February launch would "suit" Cussons was probably his interpretation, or the inference he drew, from what Mr Courtier said. That was not necessarily what Mr Courtier said. What he "felt" out of the conversation was that Cussons was probably working on the same sort of timing that Unilever was. He did not get the sense that Mr Courtier was making any commitment in relation to timing. 276 This communication was also one of the Commission's pleaded communications (ASOC [39]). Again, however, it is hard to see how it greatly assists the Commission's case. At most, it indicates that Mr Campbell, on behalf of Unilever, was able, through somewhat surreptitious or deceptive means, able to extract information from a Cussons employee. The call was instigated by Unilever, not Cussons. And of course, had there been any sort of arrangement or understanding between Unilever and Cussons at that time, those sorts of tactics would have been entirely unnecessary. 21 August 2008 Cussons' board meeting 277 There was a meeting of the Cussons board on 21 August 2008. Prior to that meeting, Mr Davey received a copy of the Project Mastermind NPD1 document. The contents of that document were summarised earlier. The version of the NPD1 document received by Mr Davey included the statement "[r]etailers are driving timing based on collaborative advice and agreement to launch between Colgate, Unilever and PZC". 278 Mr Davey's evidence, in the context of the NPD1 document, was that he was not aware of any "collaborative advice and agreement to launch" between Colgate, Cussons and Unilever regarding ultra concentrates. He said that there was discussion at the board meeting concerning the Accord proposal, but that the board did not discuss NPD1 in terms of any agreement between Colgate, Cussons and Unilever. His evidence was that he had "a clear recollection of discussing Project Mastermind and within Project Mastermind the Accord proposal was an option as to how communication to the consumer could occur". 279 Mr Davey was cross-examined at some length concerning the Project Mastermind NPD1 document that was sent to him. His evidence concerning it was criticised by the Commission and was the main plank of the Commission's submission that Mr Davey's evidence should not be accepted unless corroborated. It is therefore necessary to consider it in some detail. 280 Mr Davey agreed that, by the time the Project Mastermind NPD1 was considered by the Cussons board, the project was "well on the way and money had been spent". His evidence about the purpose of the NPD1 document was as follows: The document was late as typically NPD1 documents were late, but the purpose of the NPD1 was for the collective members of the board with their functional responsibilities to at that point in time align on do we agree that this project should go forward, this concept should go forward. 281 Mr Davey appeared to disagree with the proposition that it was important that the board be given correct information in NPD documents. He said that "[b]ecause this is concept approval, what would be critical for us is the information related to the concept is approved as opposed to every single detail". In that context, he said that it was highly unlikely that he read the Project Mastermind NPD1. Indeed, his evidence was that he only "very rarely" read any NPD1 documents. He said that he would typically wait for the presentation that was given to the board in relation to the project. 282 When taken to the part of the Project Mastermind NPD1 document that referred to the "collaborative advice and agreement" between Colgate, Cussons and Unilever, Mr Davey said that if he had read the document and seen that statement, he would have been concerned from a "competition point of view". His concern was that the statement would have been incorrect because at the time Cussons was "going through the process of receiving legal advice to confirm what could and could not be done", and he was aware from his discussions with Cussons' solicitor that there was "a problem with agreeing with competitors in relation to the transition". The general thrust of Mr Davey's evidence was that as far as he was aware there was no agreement between Colgate, Cussons and Unilever in relation to the transition to ultra concentrates and that, in light of the legal advice that Cussons had received, Cussons would not have entered into any such agreement. 283 The Commission submitted that Mr Davey's evidence concerning the Project Mastermind NPD1 was "simply not believable". In that regard, the Commission emphasised that the NPD process was a formal process pursuant to which the entire board could consider and approve a project, and that Project Mastermind was a project of the highest importance to Cussons. The Commission also pointed out that Mr Davey's evidence was "contradicted" by the evidence of Mr Wilson. Mr Wilson's evidence was that his practice was to read NPD documents "from front to back". 284 At first blush at least, Mr Davey's evidence that he rarely read NPD1 documents might be thought to be somewhat surprising. The NPD process was undoubtedly an important formal process for the board approval of major projects. One would expect, therefore, that the creation of NPD documents would be approached with considerable care and that, once provided to the board, they would be carefully read, analysed and considered. 285 When considered in context, however, Mr Davey's evidence was not that surprising. The context includes evidence from Mr Cunningham which suggested that there were anywhere from 10 to 20 major projects a year at Cussons and that, since there were four NPD documents per project, there could be anywhere from 50 to 100 NPD documents to be considered by the board per year. And when one looks at the NPD documents, it is clear that, as Mr Davey said in his evidence, they contain information provided by a number of different people with different functions, some of whom might well be fairly junior. Some of that information is also fairly detailed and technical. It is therefore perhaps not completely surprising that some board members, Mr Davey apparently being one of them, preferred to listen to the presentation that often accompanied the NPD documents at the board meetings, rather than read the document itself. 286 It is true, as pointed out by the Commission, that Mr Wilson's practice was to read NPD documents from front to back. That does not mean that his evidence was inconsistent with Mr Davey's evidence. It just means that Mr Wilson's practice was different. It should also be noted in that regard that, while Mr Wilson's practice was to read NPD documents, he did not have any specific recollection of reading the Project Mastermind NPD1 document. Nor did he have a specific recollection of reading the paragraph that referred to the "collaborative advice and agreement" between Colgate, Unilever and Cussons. He was not cross-examined further in relation to that evidence. Nor was he cross-examined about what, if anything, was said at the board meeting concerning Project Mastermind. 287 In all the circumstances, Mr Davey's evidence concerning the NPD1 document was not implausible, let alone absurd, as the Commission submitted. His evidence that he was not aware of any collaborative advice and agreement between Cussons and the other Suppliers in relation to the transition is accepted. So too is his evidence to the effect that, while there was discussion at the board meeting concerning the Accord proposal, there was no discussion in that context about any agreement between Colgate, Cussons and Unilever. 288 Putting Mr Davey's evidence concerning the Project Mastermind NPD1 to one side for the moment, there are a number of other significant points to note about the significance and probative value of the statement in the document concerning "collaborative advice and agreement to launch between Colgate, Unilever and [Cussons]". The Commission submitted that the statement was unambiguous and "reflected the reality of the situation up to that point". The reality of the situation was said to be that "Woolworths was driving the timing of the transition by the Suppliers to [u]ltra [c]oncentrates based on the collaborative advice and agreement through the Accord process and other communications that each of the Suppliers had reached to launch [u]ltra [c]oncentrates". 289 That submission is rejected. 290 First, on its face, the part of the NPD1 document relied on by the Commission is far from unambiguous. It is unclear exactly what was meant or encompassed by the reference to "collaborative advice and agreement to launch". It is not clear what the advice was, or when or how any agreement was supposedly made, or what it involved or encompassed. What exactly had been agreed to be launched and when? 291 Second, and more significantly, the evidence does not support the Commission's contention concerning the "reality of the situation" as at July or August 2008. As for Woolworths "driving the timing of the transition", by August 2008, Woolworths had met with each of the Suppliers individually and discussed their plans to transition to ultra concentrates in 2009. Both Colgate and Unilever had encouraged Woolworths to take a leadership role in the transition as Walmart had in the United States. While the documentary evidence suggests that Woolworths had, in different ways, told each of the Suppliers individually that they were supportive of and would encourage the transition, the evidence does not go so far as to establish that Woolworths had agreed to take a leadership role or act as Walmart had acted in the United States. Equally, while Woolworths had, by August 2008, let each of the Suppliers know, individually, what its preferences and expectations were in relation to the timing of the launch of ultra concentrates in its stores, that did not equate to "driving the timing" as between the Suppliers. 292 As for the contention concerning "collaborative advice and agreement through the Accord process", as has already been discussed in some detail, whatever might have been Colgate's purpose in advancing the proposal through Accord, there had been no agreement between the Suppliers concerning that proposal as at July or August 2008. The 30 April 2008 Accord meeting, at its highest, had resulted in a heavily qualified agreement in principle concerning a possible "sustainability initiative" that appeared to relate primarily to consumer communication. Whatever had happened in relation to the Accord proposal up to this point in time, it did not amount to a collaborative agreement reached between the Suppliers to launch ultra concentrates. 293 It is also important to reiterate in this context that the Commission did not, in its pleaded case, allege that there was any relevant agreement (or even arrangement or understanding) between the Suppliers on foot as at August 2008. The Commission's pleaded case was that the alleged arrangements or understandings between the Suppliers had been arrived at by January 2009. Perhaps more significantly, the Commission was unable to point to any clear evidence, apart from this statement in the NPD1 document, that there was any such agreement, arrangement or understanding in place by August 2008. 294 Third, as will be seen in the continuing chronological account of the meetings and communications, by the time a Project Mastermind NPD2 document was created in November 2008, the reference to "collaborative advice and agreement" had been removed and replaced with a different statement. The new statement was that "[r]etailers are driving timing based on category review timings and any supplier who does not meet these timings will be disadvantaged with ranging, shelf positioning etc". The change between the statement in NPD1 and NPD2 can best be explained by the fact that, by November 2008, the prospect of there being any meaningful Accord agreement had all but evaporated. And the reality of the situation by November 2008 was that the retailers, primarily Woolworths, but also Coles, were driving the timing based on their preference that the launch would coincide with their major category review in 2009. 295 In all the circumstances, it is more probable than not that the statement concerning "collaborative advice and agreement" in the Project Mastermind NPD1 was a poorly worded reference to the discussions that had been taking place in respect of the Accord proposal. In light of the evidence of what had in fact occurred by that stage, it is difficult to see what else it could have been a reference to. That perhaps may also explain Mr Davey's evidence that he recalled that there was a discussion at the August board meeting concerning the Accord initiative. While Mr Davey's evidence was that he did not read the NPD1 document, it may well be that the other board members interpreted the statement as being a reference to the Accord discussions. 296 It should perhaps be noted, in this context, that the Commission pointed out that if there was any ambiguity in the statement in NPD1, Cussons did not call any evidence from the author of the statement to explain that ambiguity. It submitted that a Jones v Dunkel (Jones v Dunkel (1959) 101 CLR 298) inference should be drawn against Cussons and that it should more readily be inferred that the statement bore the meaning contended by the Commission. The Commission's submissions concerning Jones v Dunkel inferences will be discussed in more detail later. It suffices at this stage to say, in relation to the impugned statement in the NPD1 document, that even if a Jones v Dunkel inference is drawn against Cussons because it failed to call the author of the statement, when considered as part of the evidence as a whole, it remains more probable than not that the statement in NPD1 was simply a poorly worded reference to what had been mooted in relation to the Accord proposal at this time. Any Jones v Dunkel inference could not operate to convert conjecture or surmise to inference in relation to this document. 297 Needless to say, the NPD1 document must also be considered in the context of all of the evidence of what subsequently occurred as between Colgate, Cussons, Unilever and Woolworths. 25 August 2008 meeting between Cussons and Woolworths 298 On 25 August 2008, Cussons conducted a "super concentrate workshop" with Woolworths. This was one of the Commission's pleaded meetings (ASOC [42]). The Cussons attendees at this meeting included Mr Wilson, Ms Baldwin and Ms Gill. Mr Fuchs was the Woolworths representative. The notes of the meeting prepared by Ms Gill included the following: • WW seeking internal legal advice to bring 3 major suppliers together for implementation meeting • WW internal project team being set up to manage this changeover • Top to Top with James Aylan proposed • Stan has previously email [sic] suppliers advising that he believes all can move to fully funding due to cost savings by moving to super concentrate (we responded that due to high increases in raw materials that this was not the case) 299 In relation to product format, the notes record that Cussons' "proposal (pack sizes, on-pack communication, dimensions etc.) in line with what other manufacturers are proposing". 300 Alongside the subject heading "Shelf management impact", the notes record as follows: • Possibly bring review dates forward (presentations only) • Unilever have asked for launch to be pushed back 4 weeks and Colgate saying that this would work for them • Stan has requested 4 week delay internally & should have answer this week 301 Mr Wilson's evidence that the discussion concerning shelf management reflected the uncertainty about the timing of Woolworths' launch dates. He said that the uncertainty persisted for some time and became an increasing concern. The revised Accord proposal 302 On 12 August 2008, Accord circulated a revised "Household Laundry Detergent Sustainability Initiative" proposal. The general nature of the proposal is apparent from the following extract: The Household Laundry Detergent Sustainability Initiative seeks to promote the sustainable use of laundry detergents in Australia. It is a voluntary, industry-driven scheme which promotes product formulation concentration in laundry detergent products. The Initiative thereby seeks to reduce the environmental footprint of laundry detergents, whilst still meeting the needs of Australian consumers effectively. In particular, ACCORD proposes creating a laundry detergent concentration standard underpinned by an agreement for implementation to which interested companies (both members and non-members of ACCORD) can voluntarily commit. The Household Laundry Detergent Sustainability Initiative will comprise: • concentration guidelines for both liquid and powder detergents; • an implementation agreement, including an agreed timeframe for meeting the concentration guidelines; and • a product 'efficiency' logo for informing consumers. (Emphasis in original.) Cussons' legal advice concerning the revised Accord proposal 303 Mr Davey sought legal advice from its external solicitors in relation to the revised proposal. Mr Davey received the requested advice by email on 21 August 2008. The email attached a draft memorandum of advice and summarised the author's opinion and advice in the following terms: I attach a draft memo in relation to the Initiative. We previously prepared the majority of this memo prior to our meeting several months ago, and it largely sets out the oral advice we provided at the time in conference (although it has been updated to include references to the revised documents and the Middletons advice). As you seemed happy to have oral advice we did not finalise the memo at the time, and I wrote the time off the bill. However, in light of the revised Initiative documents, and your upcoming meeting and also the Middletons advice, it seems appropriate for me to issue it now in draft, as it is the simplest and most expedient way of explaining our thoughts. In summary, the main area where our view diverges from Middletons is on the issue of whether there is a risk of an exclusionary provision (ie. a per se contravention of s.45 of the TPA). It was our view when we reviewed the original documents that some of the language (particularly in section 5 of the Proposal document) was problematic as it envisaged all manufacturers collectively agreeing to withdraw any non-compliant product and to only supply products that meet the standard. While this might be a laudable aim with benefits for a range of parties, it raises a potential of constituting an exclusionary provision (ie. an agreement between competitors that has the purpose of restricting the supply of goods (namely non-compliant products)). The revised Initiative document continues to set out that all manufacturers participating in the scheme will agree to only supply compliant products. Accordingly, we still believe that this problem still exists (Middletons have concluded there isn't an exclusionary provision risk, although their analysis in that respect is very brief and it isn't clear if they have considered the specific issue of concern to us). In terms of your attendance at the meeting, and the issue of other parties taking in-house counsel, we do not believe that you need to take a lawyer. We previously sent through a brief protocol for the conduct of such meetings, and provided that protocol is followed, then merely discussing the potential elements of the scheme will not breach the law. As the protocol sets out, the key is that no agreements are reached, no competitively sensitive matters such as prices are discussed and you make it clear that you may wish to seek further legal advice (including in this case from external counsel) in relation to all matters discussed at the meeting. In particular, you shouldn't agree that PZ Cussons will cease to manufacture non-compliant products. Please don't hesitate to contact us if you would like to discuss before your meeting. 304 It should be noted, in this context, that Middletons were Accord's solicitors. Middletons had provided Accord with legal advice concerning, amongst other things, whether there was any risk that the revised Accord proposal could give rise to contraventions of s 45 of the Act. Middletons' advice, in summary, was that the proposal did not amount to an exclusionary provision and that, while there may be some reduction in competition, any reduction would fall short of a substantial lessening of competition. 305 Needless to say, the advice provided to Cussons by its own solicitors was considerably more conservative and cautious concerning the potential implications of the proposal. Mr Davey's evidence was that he appreciated that Cussons' solicitors' advice differed from Accord's solicitors' and that he acted on the basis of the advice of Cussons' solicitors. There is no question that, upon receiving the advice, Mr Davey would have been well aware that he, on behalf of Cussons, could not and should not agree to the revised Accord proposal. And as will be seen, the evidence clearly shows that he and Cussons did not agree to the revised Accord proposal. 25 August 2008 meeting of Accord to discuss the revised proposal 306 On 25 August 2008, a meeting of Accord was convened to consider the latest version of the proposal. The meeting was held in the offices of Accord's lawyers. 307 It is readily apparent that no agreement was reached concerning any aspect of the revised proposal. 308 Ms Moss' evidence was that she tabled Unilever's proposed star based rating logo system for ultra concentrates, however "the meeting did not progress from there in any way". Ms Moss recalled that Mr Davey said that Cussons would not agree to a document that required all manufacturers to move to a minimum concentration standard across all "skus" by a certain date. He said that Cussons would prefer an opt in or opt out policy in which manufacturers could transition in a staggered way. Mr Davey said that Cussons' position was a result of legal issues. In cross-examination, Ms Moss effectively agreed that, given what Mr Davey said at the meeting, she had no idea about what Cussons' plans for the transition to ultra concentrates were. Her assessment was that Cussons was "playing a role as a rogue player or something of that nature … [c]ommercially". 309 Ms Moss' recollection was that the representatives of Colgate did not make any comment throughout the whole meeting. 310 Following the meeting, Ms Moss sent an email to others at Unilever which recorded Ms Moss' impressions and reaction to the position taken by Mr Davey on behalf of Cussons at the meeting: Our recommendation for a rating system went down very well all companies we [sic] in agreement. Unfortunately a more fundamental issue to the agreement arose where Cussons actually would not agree with a document which agreed we would all move to a min 70g/70ml minimum standard across all our brands/skus by a certain end date. We tried moving the date out (assuming they wanted more time). However it become [sic] very clear they were not in fundamental agreement with moving all brands by a certain date. They preferred in [sic] an opt in/opt out policy. They used a legal issue argument on why they have this position. The legal argument was very frustrating as we had 5 lawyers from all companies and ACCORD (except Cussons) around the table and none of them understood the legal risk….We think there was no legal risk Cusson[s] are just using it as an excuse. Net, very strong message that Cussons will not be moving all their brands to super concentrate next year – hence our risk just went up and Brand has taken this on and will consider our best launch recommendation. 311 Mr Davey's evidence was that he was open to considering a star labelling system along the lines of that proposed by Ms Moss, but that he needed to obtain legal advice in relation to such an initiative. 312 Ms Katz of Unilever also sent an email to members of the Unilever "customer team" on 26 August 2008 concerning the fact that no agreement had been reached in relation to the Accord proposal. Her email stated as follows: CUSTOMER TEAM - PLEASE REFER BELOW AS A SUMMARY OF YESTERDAYS ACCORD SESSION. " The Industry Laundry Group (ACCORD) have met to discuss the Household Laundry Detergent Sustainability Initiative. All the main laundry companies were represented. While there was in principle support from all companies for a broad Laundry Detergent Sustainability project, no agreement was reached on any proposal. As a result there will be no industry agreed project operating in Q1 2009. The sustainability project contemplated that all companies would agree to take steps to compact/concentrate all their laundry products over a period of time to deliver benefits for the environment. The project contemplated a substantial consumer education campaign explaining the compaction issue to consumers and educating on an agreed industry on pack logo. The requirement that the parties agree to compact all products is crucial to the delivery of the environmental benefit. One company was unable to make that commitment at this time. Until that position changes, it is unlikely that an industry project will be agreed. If an [sic] when the companies are able to reach agreement on any such initiative, the intention is that ACCORD will approach the ACCC regarding the project. ANY QUESTIONS PLS LET ME KNOW. (Emphasis in original.) 313 Mr Bellingham received Ms Katz's email. He forwarded it to Mr Fuchs of Woolworths. 314 The Commission conceded that the 25 August meeting of Accord was the beginning of the demise of the Accord proposal. It submitted, however, that by this time "the essential elements of the transition had already been put in place". If that submission was intended to suggest that by this time there was already in place some sort of arrangement or understanding between the Suppliers concerning the timing and details of the transition, it is rejected. The terms of Ms Moss' email plainly suggested otherwise. So too did her evidence. 315 Despite the fact that no agreement, arrangement or understanding was ever reached in relation to the Accord proposals, the Commission continued to maintain that Cussons and the other Suppliers had used Accord as a "hub" through which they communicated in such a way as to reach an arrangement or understanding. The Commission's submissions in that regard are considered in more detail later. Suffice it to say at this stage that those submissions are rejected and are entirely unsupported by the evidence, at least insofar as Cussons was concerned. 28 August 2008 internal Unilever email 316 On 28 August 2008, Mr Bellingham sent an email to a number of Unilever officers and employees, including Ms Katz and Mr Basha. The email referred to a number of "key points" which Mr Bellingham considered had arisen from his discussion with Woolworths. Those key points were: 1) Woolworths are all but confirmed to push the POG out 4 weeks which meets our proposed Week 8 STT. 2) All major manufacturers (i.e. Colgate & Cussons) will be going to ultra concentrates with all brands on the above date. 3) WW's are investigating with their legal team (and hopeful of) holding a suppliers meeting around implementation details – will update once their legal team decide. (Emphasis in original.) 317 Mr Bellingham agreed in cross-examination that his statement that all manufacturers would be going to ultra concentrates with all brands was based on non-direct information and an inference that he drew from what he had heard. The Commission's pleading included the meeting between Mr Bellingham and Mr Fuchs on or shortly before 27 August 2008 which apparently provided the subject matter of this email (ASOC [44]). 29 August 2008 internal Colgate email 318 On 29 August 2008, Mr Simon Pearce of Colgate sent an email to various Colgate recipients at 10:09 am. The email stated, amongst other things, that Colgate "now have final confirmation from both Coles [and] W/W's that they will accept a shipment later than 26 Jan" and that the "new instore date for Ultras is 2 March". September 2008 meetings and communications 319 The meetings and communications that occurred in September 2008 tend to suggest that, whatever discussions Colgate and Unilever had been having with Woolworths, Cussons was still uncertain about the date that Woolworths proposed to implement its major review that would encompass the move to ultra concentrates. It would also appear that Unilever had little or no idea about Cussons' plans. 5 September 2008 meeting between Unilever and Woolworths 320 On 5 September 2008, Mr Bellingham and Mr Hamish Campbell, the Trade Category Director for fabrics at the time, from Unilever met with Mr Fuchs and others from Woolworths. Mr Bellingham prepared minutes of the meeting. Those minutes record that one key discussion point was that "WOW hopefully close to internal sign-off for an all inclusive vendor meeting to discuss changeover process". Another discussion or action point was: "Agreed on looking further into total "category" focused activation supported by WW's and the major vendors". 8 September 2008 Cussons' meeting of Project Mastermind steering committee 321 On 8 September 2008, the steering committee of Project Mastermind met. Two things are revealed by the minutes of that meeting. First, Cussons was aware that one or more of the other Suppliers had requested Woolworths to delay the introduction of ultra concentrates until March 2009. Second, Cussons remained unclear about when Woolworths intended to launch ultra concentrates. The minutes recorded: Need to be prepared for Superconcentration to be occurring for January 09 for Feb on shelf. Requests have been made to Trade to delay to March on Shelf. Confirmation on date required asap. 322 The reference to "Trade" was a reference to the retailers. It is to be noted that Cussons remained unclear about Woolworths' proposed launch date despite the fact that the internal documents of both Colgate and Unilever suggested that Woolworths had confirmed the March date to them. Unilever "stress test" workshop – 9 September 2008 323 On 9 September 2008, Unilever held what it called a "stress test workshop" in relation to Project Faster. The documentation prepared for the meeting indicates that the objectives of the workshop were to "[s]tress test [Unilever's] proposed launch mix [and] plans and anticipate potential competitors' launch plans". The notes and correspondence flowing from the meeting clearly reveal that while Unilever was committed to its "2X proposition", it was unclear, suspicious and concerned about Cussons' plans. Unilever was particularly concerned that Cussons would adopt a "fake it" strategy which involved continuing to supply standard concentrates. Unilever considered various different strategies to combat any such approach by Cussons, including challenging Cussons' "fake it" strategy with customers and continuing with one existing standard concentrate to "fight against Cussons". 324 Ms Katz's evidence was that at the time of this workshop, Unilever did not know, or was very unclear about, what Cussons was doing or not doing in terms of any transition to ultra concentrates. Her evidence was: Q: And is it fair to say that the reason that you're postulating this strategy on 11 September is that, as at that point in time, you had no intelligence from any source including Woolworths which gave you confidence that Cussons was moving to concentration when you were? A: Correct. Other than we obviously had understood very strongly from Woolworths was that they were – the fact that they wouldn't accept an unconcentrated version of Drive was that they were very determined for total category conversion. 325 As for Colgate, at the time of the workshop, Ms Katz said that Unilever had "a number of pieces of information to suggest that Colgate were proceeding". Her evidence was: Q: When you say "suggested" this is an example, is it, of what might be called market intelligence, picking up bits and pieces and putting it together yourself to try and work out what was probably going to happen? A: Correct. And also this was a summary of the workshop that had happened the day before where obviously a range of different people had come to share the insight and understanding they have of the status quo. 326 It would appear that if Unilever was a party to an agreement concerning the date and nature of the transition by the Suppliers to ultra concentrates, Ms Katz and others present at the workshop did not seem to know about it, at least at this point in time. Cussons' guidelines to Project Mastermind employees 327 On 18 September 2008, Mr Davey circulated a document called "Guidelines for employees for the laundry superconcentrate project" to employees working on Project Mastermind. The guidelines in relation to dealing with "[e]xternal [c]ontacts" were in the following terms: • Mark Davey and George Fatouros are the only representatives of PZ Cussons authorised to have any discussion with competitor companies on the superconcentrate laundry project (having received clear guidelines from external legal counsel on how such discussions will be conducted - in the context of the industry body, ACCORD) • For all other personnel - under no circumstance should there be any discussion with any representative of a competitor company on the launch of superconcentrate laundry products (including related matters) • Includes informal/social contacts • If a situation arises where it is believed an exception may be required, then this must first be expressly approved (in writing) by either Mark Davey or George Fatouros • In any situation where you have involvement in a discussion with a competitor on this matter (whether direct or indirectly) then a detailed, written record must be issued to Mark Davey • In dealing with any other external contact (e.g. a retailer representative) there should be no reference to discussions that are taking place at the ACCORD industry working group other than • by reference to the fact that industry is working on a technical definition and standard of 'superconcentrates' based on dosage quantity. • no reference should be made to industry performance standards. • Any questions or suggestions from retailers on industry working together should be noted and checked with Mark Davey prior to engaging in a discussion This will help avoid misinterpretation or misrepresentation • Under no circumstance should there be any discussion on industry/competitor pricing • Give particular caution to any written communication with an external contact (e.g. a buyer) on this project • If unsure then please check with Mark Davey • If in doubt, exercise caution and check first – if at any time you are uncomfortable with a discussion then excuse yourself and make note of the reasons for your concern (Emphasis in original.) 328 The Commission criticised those guidelines on the basis that they were only issued very late in the piece. It also appeared to submit that there were numerous instances where the guidelines were breached. That submission is rejected. 329 The supposed breaches of the guidelines related to instances where Cussons' employees were provided with information by Woolworths. Those exchanges did not breach the guidelines. The Commission also relied on an internal Cussons email that contained photographs of Colgate's new packs in New Zealand. Even if those images were somehow confidential and comprised market intelligence in relation to the move to ultra concentrates in New Zealand, it is difficult to see how that email advanced the Commission's case in any respect. It certainly provided no evidence of any arrangement or understanding, to which Cussons was a party, which concerned the Australian laundry detergent market. Finally, the Commission relied on some communications from and to Woolworths, to which Mr Aaron Miglioranza, Woolworths' National Account Manager at Cussons at the time, was a party, on the eve of the March 2009 launch by Woolworths. Those communications are addressed below. As will be seen, those communications were and are of little moment. They were instigated by Woolworths and concerned issues relating to the final implementation and logistics of Woolworths' launch, primarily in respect of advertising and marketing. 23 September 2009 meeting between Cussons and Woolworths 330 On 23 September 2008, Mr Coghlan of Cussons met with Mr Fuchs of Woolworths. Mr Coghlan's notes of that meeting, which he circulated by email, included the following: - Stan is still very unclear on launch dates and how to launch - He had still not met with his managers to confirm the date change for in store execution to March 09 (Scott and I are meeting with James Aylen next week, so we will definitely mention) - He intimated that if we could have product pre Feb, that he would Pen and Ink the product??? (very strange, but I will pursue how serious he is) - I asked him what date would be the Planogram layout date, and he said it could be March, but remained as Feb at this point of time 331 The expression "pen and ink" referred to a circumstance where a retailer made a change to their layout outside the normal planogram process. It would thus appear that even by late-September 2009, Cussons was not entirely clear on the timing of Woolworths' launch of ultra concentrates. A note of a meeting of the Project Mastermind steering team on 29 September 2008 suggests that the uncertainty had not been resolved by the time of that meeting. 29 September 2008 meeting between representatives of Accord and the ACCC 332 On 29 September 2008, Ms Capanna and Mr Brock of Accord, together with Accord's lawyer, met with Mr John Martin, a Commissioner of the Commission. A file note of the meeting made by Accord's lawyer recorded, amongst other things, that Ms Capanna told Mr Martin that "no agreement or arrangement had yet been reached and there was no firm or other decision to proceed" and that she described the scheme as a "labelling initiative". In relation to the abandonment of current product lines, Ms Capanna said that "members are in any event trying to rationalise product lines and reduce SKUs". Mr Martin is recorded as having indicated that "if there were to be any requirement to abandon existing product lines – ie conventional lines without specified or higher concentration levels – then an authorisation would likely be necessary". October 2008 meetings and communications 333 It would appear that throughout October 2008, Cussons continued to formulate and refine its plans in respect of Project Mastermind. Cussons' internal documents reveal that it was still targeting February 2009 as its transition date. They also show that while Cussons remained uncertain of Woolworths' position or preference for its launch date for ultra concentrates, a meeting with Mr Fuchs provided some answers. The evidence also tends to show that Cussons had a limited understanding of what Colgate and Unilever were planning in relation to the transition. A meeting of Accord during October 2008 effectively put an end to any Accord proposal concerning ultra concentrates. Cussons' Project Mastermind Steering Committee meetings 6 and 13 October 2008 334 The Project Mastermind steering team at Cussons met on 6 October 2008. Once again, the minutes of that meeting indicate that Cussons was uncertain about Woolworths' launch date, but that Cussons was still targeting for a February 2009 "rollout": - Targetting mid Feb stock available for Coles & Metcash, based on a state-by-state rollout. Still need final confirmation on roll-out. - WW are yet to confirm date. Scott & Team have elevated the resolution of this to the Grocery GM in WW. - Dates to be confirmed and communication to Project and Steering Team asap!! 335 At the next meeting, held on 13 October 2008, it was recorded that Woolworths had "broadly agreed to 02 [M]arch launch date". Meeting between Cussons and Woolworths on 7 October 2008 336 On 7 October 2008, Mr Messina, the then Customer Marketing Manager of Cussons met with Mr Fuchs of Woolworths. The day after the meeting, Mr Messina sent an email reporting on the meeting to a number of Cussons' officers who were involved in Project Mastermind. Mr Messina reported that Mr Fuchs provided some answers to a number of questions he had in relation to the changeover to ultra concentrates. The relevant questions and answers included the following: … 3. Review Date? - Review date is still as per schedule - new line cut off 21/12 - He will however want to see pack dimensions, costings etc by the end of Oct … 5. Planogram Date? - He confirmed that this is likely to be early MARCH, but an absolute date had not been confirmed - His request was again, if we can have product any earlier, he will pen and ink the product earlier than the above date - he said he would issue 2 planograms, the first would be a combination of old and new sku's during the transition and 4 weeks later the new planogram with new skus (Not sure if this is the right thing???) 6. Stock into DC date? - Generally 2 - 3 weeks pre planogram to store date, so this would be mid February if WW lock in early March for planogram to store date - As mentioned Stan will look at ranging product as it becomes available … 9. Stock clearance? - Stan has requested that they are interested in selling through any excess stock 10. Field resources? - Stan was recommending that this is outsourced and we share the costs (I'm thinking that we meant the Supplier!) … 12. Promo Program Strategy post changeover? - Post changeover he has requested that we submit new program once our products are live in WW system with Full Funding on all promotions moving forward - We indicated that we were not in a position to offer this; he said that 1 supplier had offered and the other was a long way off from full funding. - We doubt this is the situation and neither Unilever or Colgate's were offering full funding 13. Point of sale Policy? Branded/Generic/Accord - Stan indicated that other vendors were using the environment as their platform of the changeover for launch and that he had approved some floor media for this - I mentioned that a category approach was the most appropriate and that we should use the messages of Accord to remain category focussed and not to favour any one supplier - Stan had not heard from anyone else relating to Accord and was keen to get through information on how they were communicating the changeover to potential tap into for WW launch - He has had approval to do shelf stripping, wobblers and floor media at this stage 14. Overall - WW is now well aware that Coles is well ahead of them in the process and have expressed a sense of urgency in moving this forward. - I believe that they will determine dates and timings in the next few weeks and have a more concrete view on how they will implement. … Unilever communications 337 On 8 October 2008, Mr Bellingham sent an email to Mr Fuchs in which he included, as a discussion item, "Meeting of Manufacturers – Can we please look at setting a date for this?". Mr Bellingham did not explain, in his evidence, what he meant or intended by this. 338 A number of internal Unilever documents and communications during October 2008 tend to suggest that Unilever was still unaware of what Cussons was going to do in relation to the transition to ultra concentrates, though it appears that Unilever continued to receive some information from unnamed "trade sources". An email concerning the Project Faster communications package recorded: From a competitor [sic] point of view, we now have information which leads us to believe that Colgate will make all their powder brands into superconcentrates, and Cussons, who we suspected might not move to a higher BD [bulk density] on most brands also look like they are going to move, given current trade sources. 339 It also appeared that, while Unilever was by this time committed to Project Faster, to the point of granting approval to place orders for packaging, it continued to explore contingency plans, including continuing to produce a standard concentrate. 340 In late October 2008, there were internal Unilever discussions about the prospect of Cussons being a market disruptor in the transition to ultra concentrates, as Proctor & Gamble had apparently been in Turkey. In that context, Ms Katz expressed doubt or scepticism about whether the "trade" – the retailers such as Woolworths or Coles – would play the role of "policeman" in relation to the transition. 10 October 2008 meeting of Accord, Colgate, Cussons and Unilever 341 A further meeting of Accord was held on 10 October 2008. It was attended by Ms Capanna and Mr Brock of Accord, Accord's lawyers, representatives of Colgate, Mr Davey on behalf of Cussons and Ms Moss from Unilever. The agreed facts concerning the meeting are in the following terms: • Companies were asked to comment on this feedback and their company's position on the proposal for a 5-star labelling scheme for concentration (as proposed at the previous meeting) and the need to include a transition for all existing products. • Colgate Palmolive representatives stated that there had been a reconsideration of the proposal for labelling for laundry concentration and that the company was not now in favour of such a proposal. The company view was that voluntary industry labelling initiatives should only be undertaken as a pre-emptive step to avoiding regulatory action (as in the case of phosphate labelling in Australia). • Unilever representative confirmed their support for a 5-star approach. (ACCORD also advised that Kao and Amway had expressed similar support for this proposal.) • PZ Cussons representative expressed a preference for a 5-star approach but indicated willingness to consider a simpler alternative scheme. • The meeting debated the respective positions. • After much discussion the following was concluded: o There was no agreement in support of pursuing industry wide consistent labelling and an associated standard, either five star or other readily apparent identifier; o ACCORD could therefore not establish a scheme to meet any agreed minimum concentration standard to transition all existing products (and therefore no basis for ACCC authorisation); o ACCORD should incorporate messages about the role of concentration in increasing sustainability on the Washwise website; o In an attempt to develop an 'industry' definition for concentration in support of this, companies should individually provide ACCORD with their definitions of a 'concentrated' product; and o ACCORD should also approach our Canadian sister association for any information they have on addressing concentration messages for their market. 342 In an email sent to other Unilever officers and employees after the meeting, Ms Moss noted that "Colgate would not agree to anything", that "overall nothing could be achieved" and that "ACCORD is now truly over the Laundry Sustainability group". Mr Davey's evidence was that he "left the meeting with the impression that members were unlikely to agree on any type of industry initiative regarding ultra concentrates". Mr Fatouros (Cussons) calls Mr Christopher Pedersen (Colgate) 343 A short time after the 10 October Accord meeting, Mr Fatouros telephoned Mr Christopher Pedersen, the then Managing Director of Colgate South Pacific. Mr Pedersen made a file note of the call. The note recorded that the call related to the "ACCORD matter" and that the purpose of the call was that "George wanted to understand CP's [Colgate's] change of position on an industry initiative to investigate an industry wide environmental symbol for Ultra laundry detergents". It was noted that neither Mr Fatouros nor Mr Pedersen had been at the Accord meeting where that issue had been discussed. The summary of the discussion was in the following terms: George introduced himself and sent regards from Chris How (his boss and ex CP Europe employee) George asked why CP had changed its position on an industry initiative first proposed by CP. Although I had not been in any industry meetings on this or in fact any matter (due to my recent arrival) I was fully involved with the local CP team and CP ACCORD representatives in preparing CP's position, change in previous position and preparation for their industry meetings. I explained CP's position to George using the same explanation we had prepared and used in the previous industry meeting Official ACCORD minutes have specific details of the topic discussed 344 This telephone call by Mr Fatouros would appear to reveal nothing more than that Mr Fatouros wanted to know why Colgate, having previously proposed to Accord that there be an industry-wide environmental symbol, had apparently withdrawn its support for such an initiative. 345 The Commission made the somewhat surprising submission that, in that call, Mr Fatouros was seeking to address Cussons' fear that Colgate might have been a "rogue competitor" that would maintain a supply of standard concentrates. That submission appears to amount to little more than speculation and is rejected. It is simply not supported by the terms of the file note. As noted, the conversation concerned the initiative relating to an environmental symbol. It is not known exactly why Mr Fatouros was concerned about that issue. It may simply have been an initiative in which Mr Fatouros had some interest or enthusiasm. In any event, there is nothing to suggest that Mr Fatouris was concerned about Colgate being a "rogue competitor". Mr Pedersen did not give evidence. 346 It should be noted that this was not one of the communications that the Commission included in its pleading. It only assumed significance in the Commission's closing submissions. 21 October 2008 – Cussons' "war gaming" session 347 On 21 October 2008, Cussons conducted what it called a "war gaming" session involving employees who were responsible for Project Mastermind. The session was attended by, amongst others, Mr Davey and Mr Wilson. Mr Davey's evidence was that the purpose of the session was to "brainstorm" a range of different scenarios as to how Cussons would compete and how its competitors might respond when ultra concentrates were launched. Mr Wilson's affidavit evidence was to the same effect. The effect of his affidavit evidence was that, at the time of the war gaming session, his understanding was that Cussons had only a limited understanding of what Colgate and Unilever were planning and when Woolworths proposed to launch. He said (at [65]): At the time we understood that Colgate and Unilever would be introducing super concentrates but we did not know what the RRPs of their super concentrates would be, what pack or scoop sizes their SKUs would have and what level of concentration they would use. In other words, we did not know how they would approach any of the aspects that we believed would drive consumers' purchasing decisions. We did not know how the retailers would approach some issues and made assumptions about matters such as when Woolworths would start supplying super concentrates. 348 Mr Wilson's notes of the war gaming session record that the participants discussed different potential strategies that Colgate and Unilever might adopt in relation to matters such as pricing, pack sizes, product formulation and performance and environmental claims. Nothing in the notes suggests that they knew exactly when and how its competitors planned to launch their ultra concentrate range. 349 The evidence concerning this war gaming exercise is quite inconsistent with Cussons being a party to any arrangement or understanding with Colgate and Unilever concerning the transition to ultra concentrates. Had there been any arrangement or understanding of the type alleged by the Commission, those war gaming sessions would have been completely unnecessary. It would in those circumstances have been unnecessary for Cussons to speculate or try to work out what its competitors were likely to do or not do and how it should react to various different scenarios. Unless those war gaming sessions were some sort of elaborate ruse, they are wholly inconsistent with the inferences that the Commission says should be drawn. 350 The Commission submitted that the war gaming sessions were not inconsistent with the existence of an arrangement or understanding because they concerned what Cussons would do if its competitors cheated on the arrangement or understanding that had been reached or arrived at. There are at least two fundamental problems with that submission. First, it is inconsistent with the evidence concerning those sessions, both documentary and testimonial. There is no hint in the evidence that those sessions concerned the possibility of Cussons' competitors cheating on an arrangement or understanding. Second, this supposed cheating scenario was never put to any of Cussons' witnesses in cross-examination. 31 October 2008 Woolworths' (Mr Fuchs') emails 351 On 31 October 2008, Mr Fuchs sent emails to some of its suppliers, including Colgate, Cussons and Unilever, asking that they give him their "promotional program" for their "new products" and their "new line paperwork". In a third email sent to Colgate and Unilever, but not Cussons, Mr Fuchs requested assistance in relation to Woolworths' new planogram. November 2008 meetings and communications 352 The communications which occurred in November 2008 tend to suggest that the Suppliers' transition plans were effectively finalised and that the retailers, both Woolworths and Coles, had clearly communicated to the Suppliers that their new ultra concentrated brands were to be launched as part of the retailers major review which had been moved from February 2009 to March 2009. Coles' and Woolworths' communications 353 On 4 November 2008, Mr Schadel of Coles sent an email to a number of persons, including Colgate, Cussons and Unilever. The purpose of the email was "to provide information that will assist your business in preparing for the Range Review process". It stated that the key objectives of the review would be the "[c]omplete conversion of [l]aundry [d]etergents [and] [l]iquids to concentrated formats" and that "[o]nly new format concentrates will be considered as part of this review". The key dates for the review included "New Line Cut Off" 1 December 2008, "Range Closure" 26 December 2008, "Date Effective" 11 February 2009, "New Lines Shipped" 16 February 2009 and "Implementation Start" 2 March 2009. There was no suggestion that any of those dates were negotiable. 354 Also on 4 November 2008, Mr Fuchs sent an email to other Woolworths' officers which attached a detailed "timeline" for the "laundry super concentrate transition". He also sent an email to Mr Russell of Colgate, Mr Miglioranza of Cussons and Mr Bellingham of Unilever in which he asked the addressees when they were going to "start communicating (on the current pack) the change to super concentrates". He also indicated that he was going to ask Woolworths' marketing department to "cost out" the marketing and said that when he had the costings they would need to decide how the marketing costs would be split. On 17 November 2008, Mr Fuchs emailed details of the communication costs to the recipients of the 4 November email. Mr Fuchs sent further emails to the same people concerning advertising on 24 and 26 November 2008. 355 On 19 November 2008, Mr Fuchs sent an email to a large number of Woolworths' officers which summarised the transition to ultra concentrates, together with a detailed draft action plan. The email and draft action plan revealed the size and scope of the transition and the advanced state of Woolworths' planning in relation to the launch of ultra concentrates in March 2009. Cussons' further war gaming session – 11 November 2008 356 Cussons conducted a second war gaming session in relation to ultra concentrates on 11 November 2008. The notes of the session record that the "[b]ig [i]ssues" included trying to ascertain what Colgate's "'winning' strategy" would be, "[h]ighlighting implications and opportunities" for Cussons and trying to work out how Cussons could gain advantages via the execution of the transition. 24 November Woolworths' email to Colgate, Cussons and Unilever 357 On 24 November 2008, Mr Fuchs received an email from a Woolworths' employee concerning the proposed layout of the February issue of Woolworths' Australian Good Taste magazine, which included a feature on "[g]reen [w]ashing". The author of the email noted that Woolworths would "need to get confirmed bookings and briefing forms from vendors immediately" if they were to be included in the February issue. Mr Fuchs forwarded this email on to Mr Russell of Colgate, Mr Miglioranza of Cussons and Mr Bellingham of Unilever, and stated: "[i]f you are interested in the Feb issue, we will need to act on this by COB tomorrow". Cussons' board approves NPD2 358 On 27 November 2008, Cussons' board approved Project Mastermind proposal NPD2. The NPD2 document noted that the "[l]aunch date has moved from early Feb to 02 March" and that "[t]here is no longer an industry body (Accord) to communicate the move to ultra concentrates – all players will now communicate the changes independently". The concentration level of Cussons' new Radiant and Duo ultra concentrates was 2x. The "[s]ituation [a]nalysis" part of the NPD2 document recorded the following: Complete hard change over for all products and brands in the upcoming grocery range review – December presentations for initial trade orders in February (available from 16th) and on shelf availability March 2009. Retailers are driving timing based on category review timings and any supplier who does not meet these timings will be disadvantaged with ranging, shelf positioning etc. 359 It is readily apparent that, by that time at least, Cussons' transition plans were effectively set in stone. December 2008 meetings and communications 360 There were very few relevant meetings or communications in December 2008. It is tolerably clear that each of the Suppliers was committed to and working towards meeting the launch dates set by Woolworths and Coles. Production of the new ultra concentrates had commenced. Cussons 361 On 1 December 2008, Mr Wilson received an email from an officer of Cussons in New Zealand which contained "intel" [intelligence] about Cussons' competitors in New Zealand, including images of Colgate's pre-launch packs and in-store signs communicating the change to ultra concentrates. Mr Wilson forwarded the email to other Cussons officers. Unilever 362 Internal Unilever emails continued to record the concern that Cussons might be a "rogue player" and continue to range standard concentrates for a further six months in 2009. 363 On 18 December 2008, Project Faster was approved by Mr Lazell at the Business Projects Meeting. Production of the new ultra concentrates had already commenced. Woolworths' December 2008 communications to the Suppliers 364 On 22 December 2008, Mr Fuchs sent two emails to Mr Russell of Colgate, Mr Miglioranza of Cussons and Mr Bellingham of Unilever. 365 The first email referred to an attached spreadsheet said to contain "pack dimensions of the [three] major vendors" and said that the information "will allow you to look at some POG [planogram] suggestions". 366 The second email forwarded an email which concerned the assistance that Woolworths' marketing could provide to the vendors and the cost to each vendor. 367 It is difficult to avoid the conclusion that those emails concerned the Woolworths' implementation of the transition. By this time, the Suppliers must already have committed themselves to things such as pack sizes. January and February 2009 meetings and communications 368 It is difficult to see how any of the meetings and communications that occurred in January 2009 and thereafter could bear significantly, or at all, on the question whether Cussons was a party to any arrangement or understanding with Colgate and Unilever. That is because the Suppliers' plans were effectively finalised: they had commenced production of their new 2x ultra concentrates, must have finalised details concerning the packaging sizes and communications, and were working towards Woolworths' and Coles' launch dates in March 2009. Woolworths' communications 369 On 5 January 2009, Mr Fuchs sent another email to Mr Russell of Colgate, Mr Miglioranza of Cussons and Mr Bellingham of Unilever. The email concerned an advertising schedule. 370 On 20 January 2009, Mr Bellingham of Unilever met with Mr Fuchs and Ms Jones of Woolworths, Ms Emma Paterson, the Business Development Manager at Colgate, and Mr Miglioranza of Cussons. The purpose of the meeting was the production of a "how to" guide for Woolworths' stores, to provide them with generic information concerning the transition to ultra concentrates. The obvious point of the guide was to avoid customer confusion arising from the smaller pack sizes. 371 On 5 February 2009, Ms Jones of Woolworths sent an email to Mr Russell of Colgate, Mr Miglioranza of Cussons and Mr Bellingham of Unilever, with a copy to Mr Fuchs. The email requested certain information, including information in relation to the environmental benefits of the ultra concentrates, the "[t]otal media spend" on the conversion and the percentage of the media that would be focussed on the environment. The transition 372 It was effectively common ground that each of the Suppliers began supplying their new 2x ultra concentrated laundry detergent blends to Woolworth, Coles and Metcash in about February 2009 and that Woolworths, Coles and Metcash began selling those products to consumers from at least the beginning of March 2009. The evidence concerning exactly when Woolworths, Coles and Metcash began to supply each of the Suppliers' ultra concentrates and the similarity between the package sizes and pack communications of the respective Suppliers' new ultra concentrates, however, was not entirely clear. Equally, the evidence concerning the cessation of supply of the old standard concentrates to Woolworths, Coles and Metcash was far from clear or compelling. 373 As for Cussons, there was evidence that some Woolworths, Coles and Metcash stores began selling some of Cussons' new ultra concentrate versions of its laundry detergent brands in February 2009. Two of Cussons' ultra concentrate SKUs were sold to consumers by Woolworths in the week ending 15 February 2009 and 16 ultra concentrate SKUs were sold to consumers in the week ending 22 February 2009. Fifteen of Cussons' ultra concentrate SKUs were sold to consumers by Coles in the week ending 22 February 2009. Two of Cussons' ultra concentrate SKUs left Metcash's distribution centres for delivery to Metcash stores or customers in the week ending 15 February 2009, and 16 left in the week ending 22 February 2009. 374 As for whether Cussons continued to manufacture and supply standard concentrates, the Commission relied on the fact that, when examined by the Commission prior to the trial, Mr Davey agreed that, to the best of his recollection, at the point of introduction of ultra concentrates, there was a complete withdrawal in the main retail stores of the standard concentrate products previously produced by Cussons. That did not amount to an admission that the withdrawal of Cussons' standard concentrates by the main retailers occurred because Cussons prevented, restricted or limited the supply of those products to the main retail stores. In any event, either Mr Davey's statement apparently did not encompass Metcash, or if it did, he was mistaken. The evidence led at trial included evidence from Mr Freene to the effect that, in February 2009, Cussons continued to offer Metcash its Radiant one and two kilogram laundry detergent in both standard and ultra concentrate formats. While ultimately Metcash decided not to continue to purchase the Radiant standard concentrates, it did continue to buy Radiant 650 gram standard concentrate SKU for some time. 375 As for Unilever, there was evidence that it commenced shipping its new ultra concentrate range to retail stores including Woolworths on or shortly before 24 February 2009. An email sent by Ms Katz on 24 February 2009 noted that "[k]ey competitor packs are appearing on shelf and all are confirmed at 2X concentrate". Mr Bellingham's evidence was that on 2 March 2009, he observed the changeover to Unilever's ultra concentrates in Woolworths stores. 376 The Commission did not take the Court to any specific evidence concerning Colgate's transition or changeover to ultra concentrates in March 2009. 377 As for the size and appearance of the packaging of the respective Suppliers' ultra concentrate products, while the Commission apparently contended that the package sizes and appearances were materially similar, it did not take the Court to any specific evidence which supported that contention. Such evidence as there was in relation to the size of the packages tended to suggest to the contrary. An internal Colgate email dated 27 April 2009 stated as follows: Colgate strategy has been to deliver a true 2X Ultra by 'halving' the carton and scoop sizes, maintaining the amount of washes in a carton 2X smaller. …. Our competition on the other hand has not 'halved' the carton size, neither the scoop volume. Probably facing some processing issue, their 2X Ultra strategy was to half the product weight only. As a consequence their pack looks slightly bigger and their scoop does not reflect the [sic] a real half dose in volume. A 2nd consequence is that they have to use more carton/cardboard/logistic to deliver a similar amount of wash doses. … 378 Similarly, a Colgate presentation document prepared sometime after the transition records that Colgate's ultra concentrates were "[h]alf the weight, half the volume with shelf impression reflecting this objective", whereas Cussons' and Unilever's products were "[h]alf the weight but not half the volume". An accompanying table which included details of the external pack dimensions indicated that there were differences in the pack sizes between the respective Suppliers' products, particularly in respect of the 500 gram packs. Unilever and Woolworths' video in late 2009 379 In late 2009, Unilever and Woolworths produced a video concerning the introduction of ultra concentrated laundry detergents. Mr McNeil, Mr James Frost (Brand Director in relation to laundry detergents, based in Europe) and Mr Neil Robertson (Operations Manager in New Zealand) of Unilever appeared in the video, as did Mr Fuchs of Woolworths. The Commission relied on the fact that Mr McNeil and Mr Fuchs made the following statements in the video: Mr McNeil said: "But it was their role in getting all of the players in the industry to move simultaneously. That really made the biggest difference of all." Mr Fuchs said: "This was really important. I think firstly because we didn't want any confusion with the customers, we wanted everything to change over at the same time. Also from a cost point of view that we did one layout and we didn't have to continuously change." 380 The Commission did not call Mr Fuchs. Cussons did not object to the admission of Mr Fuchs' statement as evidence of the truth of the assertions made in it. The statement tends to confirm that it was Woolworths that drove the timing of the transition, in part for its own commercial purposes, but also because it did not want its customers to be confused. EXPERT EVIDENCE 381 As adverted to earlier, both the Commission and Cussons adduced expert opinion evidence from highly qualified and well regarded economists. The Commission tendered expert reports prepared by Professor Williams and Cussons tendered a report prepared by Professor George Hay. After conferring, Professors Williams and Hay produced a joint report which identified some areas of agreement and the areas where they continued to disagree. Professor Williams was cross-examined, however Professor Hay was not. 382 In general terms, Professors Williams and Hay expressed competing or different opinions about two related matters. The first matter was whether the simultaneous transition to ultra concentrates by Colgate, Cussons and Unilever in March 2009 would or would not have occurred in the absence of some coordinated action, or in the absence of the arrangements or understandings alleged by the Commission. The second matter concerned whether the effect of the Aligned Transition Arrangement was to substantially lessen competition in the market for laundry detergents in Australia. In expressing their respective opinions, both Professor Williams and Professor Hay no doubt utilised their expertise and experience as economists well-versed in market behaviour. Their opinions were also, at least to a certain extent, based on economic theories and models concerning behaviour in oligopolistic markets. As will be seen, however, to a certain extent, their opinions depended on inferences of fact drawn from some of the evidence. Some of those inferences of fact were at best questionable and, in some cases, not supported by a fair consideration of the evidence as a whole. Opinions about what would have occurred in the absence of coordinated action 383 Professor Williams expressed the opinion that, had Colgate, Cussons and Unilever acted unilaterally, it is possible, but "seems unlikely", that each of them would have decided to introduce their new products in March 2009. His opinion, it seems, was that it is likely that Woolworths would have insisted that the change take place in February 2009, and would not have changed the in-store launch to March 2009 in response to requests by some of the Suppliers. Professor Williams also expressed the opinion that if Colgate, Cussons and Unilever had acted unilaterally, it is unlikely that they would have decided to cease supply of standard concentrates. His opinion, in that regard, appeared to be based on his inference, drawn from the evidence, that the Suppliers saw a complete switch to ultra concentrates as risky if taken unilaterally. Professor Williams appeared to reason that in those circumstances, the Suppliers were likely to adopt the less risky strategy of supplying a mixed range of ultra concentrates and standard concentrates. 384 Professor Hay, on the other hand, expressed the opinion that the transition to ultra concentrates by each of the Suppliers would most likely have occurred in March 2009 without any agreement, arrangement or understanding between them. Likewise, in his opinion, the restriction of the supply of standard concentrates would most likely have occurred in the absence of any agreement, arrangement or understanding. In Professor Hay's opinion, the substantive behaviour of the Suppliers with respect to the transition to ultra concentrates was explicable without reference to any collusive arrangements or understanding. Their conduct was, rather, an individually economically rational response to underlying market forces. 385 Before addressing the respective opinions of Professors Williams and Hay in some more detail, it is worthwhile briefly referring to the matters about which they were able to agree, and to outline some of the areas of disagreement that is ultimately unnecessary to resolve. 386 Professors Williams and Hay were in broad agreement about the following matters. 387 First, the market in which Colgate, Cussons and Unilever competed was a mature oligopoly with a high degree of concentration on the seller side and an even higher degree of concentration on the buyer side. 388 Second, there are a great many economic models of oligopoly behaviour. Generally they fall into two categories: unilateral conduct and coordinated interaction. The two classic economic models of oligopolistic unilateral conduct are those of Cournot and Bertrand. They allow for no communication among the competitors. The meaning of the terms "unilateral conduct" and "coordinated interaction" is important and is addressed later. 389 Third, economic theory shows that repeated interactions among oligopolistic firms can, through coordinated interaction, produce the same results as a cartel with a contract, arrangement or understanding that the Court would find illegal. Economists have often described this outcome as "conscious parallelism" or "tacit collusion". 390 Fourth, communication among competitors may be explicit (with words being conveyed between the parties) or implicit (through market behaviour without words being conveyed between the parties). 391 Fifth, in conscious parallelism or tacit collusion (that is, conduct that the Court would not find to be unlawful) rivals may react to their competitors' market behaviour without any words being conveyed between the parties. 392 Professors Williams and Hay disagreed about some aspects or features of the Cournot and Bertrand models. 393 Professor Williams' opinion was that those models allowed for interdependence among the competitors. Each competitor recognises that its optimal strategy is dependent on the strategy adopted by the other. However, because the competitors make their choices simultaneously, no player can react to a choice that has been made previously by its competitor. Professor Hay's opinion, on the other hand, was that the Cournot and Bertrand models allow for interdependence among competitors, but the interdependence is not recognised. In the Cournot and Bertrand models, a firm does not take into account that its competitors will react to its actions. In other models of oligopoly, firms recognise their interdependence and make decisions that take into account competitors' reactions. 394 As interesting as the disagreement between the Professors about the Cournot and Bertrand models may be, it is not necessary to resolve for the purpose of this proceeding. Neither party suggested that this was an issue that needed to be resolved. 395 Importantly, Professors Williams and Hay agreed that the source of their different opinions and conclusions about the likelihood of the simultaneous transition in March 2009 occurring was that they employed different bases for comparison. Professor Williams compared a world of unilateral conduct with a world in which the alleged behaviour occurred. Professor Hay, on the other hand, compared a world without any collusive agreement, arrangement or understanding with a world in which the alleged behaviour occurred. A world of unilateral conduct is not necessarily the same as a world without any collusive agreement, arrangement or understanding. 396 The different bases for comparison employed by Professors Williams and Hay are critical to understanding their differences of opinion and warrant further consideration. 397 Professor Williams agreed that the critical factor in the notion of unilateral conduct was that the conduct occurred in circumstances where there had been no explicit or implicit communication between the competitors. The converse or alternative to unilateral conduct is conduct or decisions taken by the competitors in an oligopolistic market where there has been some form of communication between the competitors about how they will act. In that context, communications can mean any form of communication in a broad spectrum of communications. That spectrum of communications includes, at one end, collusive agreements, arrangements and understanding, and towards the other end, communications where, for example, one of the competitors intentionally or even unintentionally signals what it was intending to do, or unwittingly discloses information to a customer which is then passed on to one of the other competitors. The expression "coordinated interaction" refers to this spectrum of possible communications. 398 Professor Williams' opinions were expressed in terms of whether Colgate, Cussons and Unilever would have simultaneously transitioned to ultra concentrates in March 2009 and ceased supply of standard concentrates at the same time if they acted unilaterally: that is, if there had been no communications between them whatsoever. In expressing that opinion, Professor Williams was not saying that the simultaneous transition, for example, would not have occurred unless there was a collusive arrangement or understanding between Colgate, Cussons and Unilever of the sort alleged by the Commission. In simple terms, Professor Williams' opinion was that "it is likely that the uniform transition … required some form of communication among producers". The important point to emphasise, however, is that the communication involved in Professor Williams' scenario could have comprised mere market intelligence about the plans or actions of one of the other Suppliers which was acquired from a retailer, such as Woolworths, or signalling or other market behaviour which did not involve any words being conveyed between the Suppliers. 399 Professor Hay's opinions, on the other hand, were expressed in terms of whether the transition which occurred in March 2009, and the cessation of the supply of standard concentrates, would likely have occurred without any agreement, arrangement or understanding. He did not suggest that the transition would have occurred in the absence of any sort of communication. 400 Professor Hay's opinion, in summary, was that it was likely that the Suppliers would have transitioned to ultra concentrates at the same time in early 2009 without any collusive arrangement or understanding. That was so for a number of reasons, including: that there was no economic incentive for an individual supplier to delay the introduction of ultra concentrates and forgo the economic benefits of reduced costs and possibly higher margins which were known to exist by 2008; the retailers' strong economic reasons for requiring a prompt and simultaneous transition by all suppliers; and the retailers' structured range review processes. Professor Hay was not cross-examined and his opinions were not tested or challenged. 401 The Commission submitted, in effect, that the Court should prefer the opinions of Professor Williams. It expressly or implicitly criticised aspects of Professor Hay's analysis and his opinions. In those circumstances it was somewhat unusual, if not unhelpful, that the Commission elected not to cross-examine Professor Hay. Be that as it may, the Commission's efforts to persuade the Court to prefer Professor Williams' opinions were unsuccessful. That was not simply a product of the fact that Professor Hay was not cross-examined. Ultimately, upon careful consideration of the respective reports, and taking into account Professor Williams' oral evidence, and the evidence as a whole, the opinions of Professor Hay were found to be of more probative value and assistance than those of Professor Williams. Professor Hay's evidence and his opinions were, on the whole, more persuasive than Professor Williams'. That is so for a number of reasons. 402 First, Professor Williams' opinions were not particularly probative in respect of the question whether or not Cussons entered into an arrangement or arrived at an understanding of the sort alleged by the Commission. His opinions left open the possibility that the simultaneous transition and cessation of the supply of standard concentrates in March 2009 was the result of direct or indirect communications between the Suppliers of a sort that could not be characterised as an agreement, arrangement or understanding. His opinions left open the possibility that the parallel conduct was the product of, for example, market intelligence obtained from Woolworths and Coles, or the Suppliers otherwise unintentionally signalling their plans and progress via their discussions with the retailers. 403 Second, the reasoning behind Professor Williams' opinions was, with respect, rather sparse and unpersuasive. Perhaps more significantly, a close reading of his report reveals that his opinions were mostly based on inferences of fact which he had drawn from some of the documentary evidence briefed to him. While he may well have brought his expertise as an economist to bear in drawing some of those inferences, at the end of the day the inferences to be drawn from the evidence is a matter for the Court. Some of the inferences drawn by Professor Williams that provided the basis for, or otherwise supported his opinions, appear to have been based on only limited parts of the evidence and are, at best, debatable, and in some cases, not supportable. That significantly undermined the probative force of his opinions. It suffices to give two examples. 404 Professor Williams' opinion that if the Suppliers' conduct was unilateral was for the most part based on an inference that he drew from the evidence that the bargaining power of Woolworths in relation to the launch date had weakened because Colgate, Cussons and Unilever were all of the view that the launch should be delayed to March 2009. That inference was drawn from parts of Mr Bellingham's affidavit and an email authored by Ms Katz. Professor Williams reasoned that it seemed "more likely that some co-ordinated conduct among Unilever, Colgate and Cussons caused Woolworths to agree to the delay in the launch date". 405 There was, however, no evidence that Cussons engaged in any coordinated conduct that was intended to, or did, cause Woolworths to weaken and agree to delay the launch date. While in its communications with Woolworths, Unilever did refer to Cussons' preferences concerning the launch date, the evidence as a whole indicates that this was done without the consent or knowledge of Cussons. Second, the inference that Woolworths agreed to move the launch date because its bargaining power was weakened by some coordinated conduct involving Cussons is not supported by the evidence considered as a whole. Whatever information may have been conveyed to Woolworths by Unilever in relation to the preferences of the Suppliers, there is no evidence that Woolworths treated it as an exercise of the combined bargaining power of the Suppliers. And third, in any event, the inference drawn by Professor Williams is a very tenuous basis upon which to conclude that, if the Suppliers had acted unilaterally, it is unlikely that they would have decided to introduce their new products in March 2009. At most it might support the proposition that the Suppliers might have been forced to launch some of their new ultra concentrated detergents in February 2009 because Woolworths was unwilling to delay its major review and launch date. 406 The second example concerns Professor Williams' opinion that, if the conduct of the Suppliers was unilateral, it is unlikely that each would have decided to cease supply of standard concentrates once they had begun to supply ultra concentrates. That opinion was based almost entirely on an inference that Professor Williams drew from some of the documentary evidence that suggested that the Suppliers were all alive to the potential risk that, if they unilaterally transitioned all their brands to ultra concentrates, they might lose some sales because some consumers would continue to purchase standard concentrates because they would think that they would be getting better value because of the large box size. Professor Williams summarised his opinion as follows: Manufacturers were concerned that consumers would perceive larger containers of standard concentrates as better value than smaller containers of Ultra Concentrates and, therefore, a complete conversion to Ultra Concentrates would lead to a loss of sales. For this reason, it is unlikely that the restriction by Colgate, Unilever and Cussons of the supply of standard concentrates to Woolworths, Coles and Metcash around March 2009 would have occurred as a result of unilateral conduct. 407 There are at least three significant problems with that conclusion. First, it completely ignores the significant body of evidence that indicates that the Suppliers transitioned all their brands to ultra concentrates, and ceased to offer standard concentrates for sale to Woolworths and Coles, because both those retailers made it abundantly clear that they did not want to continue to purchase standard concentrates once ultra concentrates were available. That evidence is considered in detail later. Second, it ignores the evidence that suggested that, despite the perceived risks, the Suppliers believed that there were significant economic benefits to be gained from a complete shift to ultra concentrates, and that there were complexities, disadvantages and costs involved in continuing to manufacture both standard and ultra concentrates. And third, the inference that the Suppliers perceived a risk to sales if they transitioned unilaterally provides an extremely flimsy basis for the emphatic opinion expressed by Professor Williams in any event. 408 On the whole, Professor Williams' opinions about what the Suppliers would or would not have done if they acted unilaterally were unhelpful and unpersuasive. To the extent that they were deserving of any weight, they were well outweighed by the opinions of Professor Hay. Opinions concerning the effect of the Aligned Transition Arrangement 409 Professor Williams expressed some opinions concerning the likely effects on competition of the Aligned Transition Arrangement. In summary, his opinions were as follows. 410 First, the Aligned Transition Arrangement changed the structure of the laundry detergent market by causing the major manufacturers to alter their behaviour in accordance with that arrangement. The effect of that change in structure was said to reduce the extent to which the major manufacturers constrained the market power of each other. This assertion was unsupported by any meaningful reasoning and amounted to little more than bare ipse dixit. 411 Second, the Aligned Transition Arrangement considered alone was likely to have caused prices to be higher than they would otherwise have been because the likely effect of the Aligned Transition Arrangement was to delete standard concentrates that would otherwise have been available in Woolworths, Coles and Metcash. This opinion was based on Professor Williams' opinion that without the Aligned Transition Arrangement, it was highly unlikely that the Suppliers would all have ceased supply of standard concentrates to Woolworths, Coles and Metcash. For the reasons already given, Professor Williams' opinion in that regard was at best unpersuasive and in any event based on an inference of fact that was not supported by the whole of the evidence. 412 Third, Professor Williams' analysis of certain data led him to conclude that the likely effect of the Aligned Transition Arrangement was to contribute to the maintenance of wholesale prices while average variable costs fell. Professor Williams' analysis of the pricing data is considered in more detail later. It suffices to note at this stage that Professor Hay's unchallenged analysis of the data was to the contrary. 413 Professor Hay's opinion was that the Aligned Transition Agreement, if made, would have had no impact on competition in the market. That opinion essentially flowed from his opinion that it is likely that the Suppliers would have transitioned to ultra concentrates in March 2009 regardless of any agreement or understanding. His opinion in that regard was set out in the following two paragraphs ([61] and [62]) of his report: For the reasons that I have indicated in this Report, in my opinion it is likely that an aligned transition would have occurred regardless of any collusive agreement or understanding. The reason for this conclusion is that each supplier was responding in an individually rational way to the relevant economic factors and therefore would likely have transitioned at the same time and in the same way (that is, they would have made a complete transition with relevant aspects of the product offerings being the same) regardless of any collusive arrangement or understanding. It follows that even if there was a collusive arrangement or understanding concerning the aligned transition, in my opinion it had no impact on competition and consumers because it is likely that there would have been an aligned transition anyway. Furthermore, it is my opinion that the overall effect of the transition was a benefit to both retailers and consumers. As would have been expected given the cost savings from ultra concentrates, the completed transition to ultra concentrates in 2009 provided substantial benefits both to retailers and to consumers. The introduction of ultra powders had a significant procompetitive impact on average wholesale net prices per factored kilogram of powder detergent. Comparing the period before the powder transition to the period after the transition, average net wholesale prices of powder detergent fell 10.4% (from $1.88 to $1.68 per factored kilogram) while average net wholesale prices of liquid detergent fell 4.2% (from $2.00 to $1.92 per factored litre). At the retail level, the average price paid per factored kilogram of powder detergent fell 6.6% (from $3.15 to $2.94 per factored kilogram) while the average retail price paid per factored litre of liquid detergent rose very slightly 1.9% (from $3.22 to $3.29 per factored litre). The average monthly factored volume of powder detergent sold at retail increased 12%. (Footnotes omitted.) 414 For reasons that will become apparent, it is strictly unnecessary to determine whether the effect of the Aligned Transition Arrangement was, or was likely to be, to substantially lessen competition in the laundry detergent market. Nevertheless, for the reasons given later, Professor Hay's opinions in relation to the effect, or likely effect, of the Aligned Transition Arrangement are to be preferred to those of Professor Williams. ISSUES FOR DETERMINATION 415 The parties agreed on the key issues for determination. There are essentially two categories of issues. The first category relates to the alleged Withhold Supply Arrangement. The second relates to the alleged Aligned Transition Arrangement. The Withhold Supply Arrangement issues 416 The parties agreed that there were eight issues relating to the alleged Withhold Supply Arrangement, though if the first two issues are not answered in the affirmative, the remaining issues strictly do not arise, or at least do not need to be determined. The eight agreed issues are as follows: (1) Whether, by January 2009, Colgate, Unilever and Cussons made an arrangement or arrived at an understanding in relation to withholding the supply of Standard Concentrate or Ultra Concentrate laundry detergents (Withhold Supply Arrangement). (2) Whether the Withhold Supply Arrangement included provisions that Colgate, Unilever and Cussons would prevent, restrict or limit the supply to Woolworths, Coles and Metcash of: (a) Ultra Concentrates until a particular date, originally January 2009 but changed, before that date, to March 2009; (b) Ultra Concentrates other than those that met certain prescribed parameters (including in relation to concentration level and pack communication), from a particular date, originally January 2009, but changed before that date, to March 2009; and/or (c) Standard Concentrates from a particular date, originally January 2009 but changed, before that date, to March 2009 (Withhold Supply Provisions). (3) Whether a substantial purpose of the Withhold Supply Provisions was to prevent, restrict, or limit the supply to Woolworths, Coles and Metcash by Colgate, Cussons and Unilever of detergents in accordance with the terms of those provisions. (4) Whether each of the Withhold Supply Provisions was an exclusionary provision within the meaning of section 4D of the Trade Practices Act. (5) Whether the Withhold Supply Provisions had the purpose of preventing, restricting or limiting the production or likely production of laundry detergent products by Colgate, Cussons or Unilever. (6) Whether, in the period from on or before January 2009 until at least December 2009, Colgate, Cussons and Unilever gave effect to the Withhold Supply Provisions by preventing, restricting or limiting the supply to Woolworths, Coles and Metcash of laundry detergents in accordance with those provisions. (7) Whether Cussons contravened s 45(2)(a)(i) of the Trade Practices Act by making an arrangement or arriving at an understanding that included the Withhold Supply Provisions. (8) Whether Cussons contravened ss 44ZZRK or 45(2)(b)(ii) of the Trade Practices Act by giving effect to the Withhold Supply Provisions (in the case of s 44ZZRK in the period after 24 July 2009). The Aligned Transition Arrangement 417 The parties also agreed that there were eight issues relating to the alleged Aligned Transition Arrangement. The eight agreed issues are: (1) Whether by January 2009, Colgate, Unilever and Cussons made an arrangement or arrived at an understanding in relation to the transition of the supply of Standard Concentrate to Ultra Concentrate laundry detergents (Aligned Transition Arrangement). (2) Whether the Aligned Transition Arrangement included provisions that Colgate, Cussons and Unilever would, from a particular date, originally January 2009, but changed, before that date to the March 2009: (a) cease to supply Standard Concentrates to Woolworths, Coles and Metcash; (b) simultaneously move to supply Of Ultra Concentrates to Woolworths, Coles and Metcash; and/or (c) supply only Ultra Concentrates that met certain prescribed parameters, in particular in relation to concentration level, pack size and pack communication to Woolworths, Coles and Metcash (Aligned Transition Provisions). (3) Whether the Aligned Transition Provisions had a substantial purpose of substantially lessening competition in the laundry detergent market. (4) Whether the Aligned Transition Provisions had the effect, or likely effect, of substantially lessening competition in the laundry detergent market. (5) Whether the Aligned Transition Arrangement had the purpose of preventing, restricting or limiting the production or likely production of laundry detergent products by any or all of Colgate, Cussons and Unilever. (6) Whether, in the period from on or before January 2009 until at least December 2009, Colgate, Cussons and Unilever gave effect to the Aligned Transition Provisions by supplying laundry detergents in accordance with those provisions. (7) Whether Cussons contravened s 45(2)(a)(ii) of the Trade Practices Act by making an arrangement or arriving at an understanding that included the Aligned Transition Provisions. (8) Whether Cussons contravened ss 44ZZRK or 45(2)(b)(ii) of the Trade Practices Act by giving effect to the Aligned Transition Provisions (in the case of s 44ZZRK in the period after 24 July 2009). Other issues 418 The parties identified three additional issues. Those three issues concerned the factual allegations made by the Commission in paragraphs 19, 20 and 21 of the ASOC. Paragraph 19 of the ASOC contained the allegation that during 2008 and 2009, each of Colgate, Cussons and Unilever considered that a transition of all powdered and liquid laundry detergents for domestic use to ultra concentrates would generate certain benefits. Paragraph 20 of the ASOC contained the allegation that during 2008 and 2009, Colgate, Unilever and Cussons considered, for a number of reasons, that the transition to ultra concentrates would be unlikely to achieve the benefits referred to in paragraph 19 of the ASOC unless they effected such a transition simultaneously. Paragraph 21 of the ASOC contained the allegation that during 2008 and 2009, Colgate, Unilever and Cussons considered that the success and benefits of the transition would be optimised, and the converse risks would be minimised, if all the Suppliers effected a full category transition simultaneously, that initiative was led by a retailer or industry body, all manufacturers withdrew supply of standard concentrates simultaneously, the ultra concentrates sold by each of the Suppliers were as uniform as possible, and there was an agreed transition date. 419 It is unnecessary to separately consider and determine those factual issues. They are issues that have to a certain extent already been addressed in considering the overall factual matrix and chronology of events, meetings and communications. They are also issues that must be considered in the broader context of the issues concerning the alleged Withhold Supply Arrangement and Aligned Transition Arrangement. That is because they form part of the Commission's circumstantial case that Cussons was a party to such arrangements with Colgate and Unilever. 420 It was essentially common ground that the Suppliers saw potential benefits in transitioning to ultra concentrates. That was why, by late 2007 and early 2008, each of them was separately and independently giving active consideration to transitioning in 2009. Equally, it was essentially common ground that each of the Suppliers appreciated that there were potential risks in fully transitioning to ultra concentrates if some or all of the other Suppliers did not fully transition at more or less the same time. In simple terms, it was thought that a supplier who led the transition, or who transitioned alone, might lose sales because consumers might fail to appreciate or understand the value proposition of ultra concentrates, and might continue to purchase standard concentrates in the larger packets because they ostensibly represented greater value for money. The Commission's case was that the Suppliers' recognition or understanding of those risks provided a motive for, and provided the context for, the making of the alleged arrangements. That aspect of the Commission's case will be considered further in the context of the Withhold Supply Arrangement issues and Aligned Transition Arrangement issues. THE WITHHOLD SUPPLY ARRANGEMENT ISSUES 421 It is convenient to deal with the first two issues relating to the alleged Withhold Supply Arrangement together. Issues 1 and 2: did Cussons enter into an arrangement or understanding with Colgate and Unilever which included the Withhold Supply Provisions? 422 The question, in simple terms, is whether, having regard to the whole of the evidence, the Commission has discharged its burden of proving, on the balance of probabilities, that Cussons made an arrangement, or arrived at an understanding, with Colgate and Unilever which included the Withhold Supply Provisions. 423 The short answer to that question is "no": the evidence does not sustain such a finding. 424 In brief terms, what was essentially missing from the Commission's case was sufficient evidence that there was a relevant meeting of the minds between Cussons and the other two Suppliers concerning the obligations or commitments involved in the alleged Withhold Supply Provisions. In particular, the evidence failed to establish that Cussons had assumed any obligation, or given any assurance, undertaking or commitment to the other Suppliers in relation to the matters that are the subject of the alleged Withhold Supply Provisions. Nor, for that matter, did the evidence suggest any mutuality or reciprocity of obligation as between the Suppliers generally. 425 It may generally be accepted that the evidence established that by late 2008 Cussons had decided to endeavour to meet Woolworths' preferences or expectations in relation to the timing and other aspects of its proposed transition to ultra concentrates. Cussons understood that Woolworths' preferences and expectations included that the transition take place in conjunction with its major review in February 2009, and that all Cussons' laundry detergent brands would change from standard to ultra concentrates. It may also be accepted that the evidence established that Cussons understood and believed, or had an expectation, that the other Suppliers were also endeavouring to meet Woolworths' preferences and expectations in that regard. On balance, however, the evidence does not establish, to the requisite standard, that Cussons considered that it had any commitment, obligation or moral or legal duty to the other Suppliers in respect of the transition. In particular, the evidence does not establish that Cussons considered that it was under any duty, or was in any sense obliged or committed, to the other Suppliers not to supply ultra concentrates to Woolworths, Coles and Metcash before any particular date, or not to supply ultra concentrates that did not meet certain prescribed parameters after that date, or not to supply standard concentrates after that date. It therefore cannot be concluded, on the balance of probabilities, that Cussons was a party to any arrangement or understanding with the other Suppliers that contained the Withhold Supply Provisions. 426 To explain in more detail why the Commission failed to discharge its burden of proving that Cussons had entered into, or arrived at an arrangement or understanding with the other Suppliers which contained the Withhold Supply Provisions, it is necessary to give more detailed consideration to a number of features of the Commission's case and the evidence upon which it relied. It should be noted, in that context, that while the Commission's submissions were extremely lengthy and detailed, they tended to address the questions concerning the Withhold Supply Arrangement at a rather unhelpful level of generality. The submissions tended to simply address the question whether there was an arrangement or understanding between Cussons, Unilever and Colgate that generally concerned or related to the timing and scope of Cussons' transition to ultra concentrates that occurred in March 2009. The submissions gave little attention to the specific Withhold Supply Provisions. In addressing the first two Withhold Supply Arrangement issues, it is convenient to adopt a similar approach and to first address whether Cussons entered into any arrangement or understanding with Unilever and Colgate in relation to the transition generally. Specific attention can and will then be given to the Withhold Supply Provisions. The circumstantial nature of the Commission's case 427 The first point to note is that the Commission's case that Cussons was party to an arrangement or understanding that included the Withhold Supply Provisions was essentially a circumstantial case. There was little or no direct evidence that Cussons was party to such any such arrangement. Direct evidence in this context means evidence that is capable of directly proving a fact without requiring complex inferences to be drawn. Despite the wealth of documentary and testimonial evidence led by the Commission in support of its case, there was no evidence of any statement, written or oral, made for or on behalf of Cussons, which was capable of directly proving that Cussons was a party to an arrangement or understanding with Unilever and Colgate that included the Withhold Supply Provisions. There was no evidence that any person, with authority to speak on behalf of Cussons, admitted that fact. No witness gave evidence that they were a party to, or heard, a conversation involving an employee or officer of Cussons which was capable of directly proving that Cussons was making or arriving at, or had made or arrived at, any such arrangement or understanding. Nor was there any document containing a statement that was capable of directly proving that fact. 428 It may readily be accepted that it is not unusual for a case involving allegations of anti-competitive arrangements or understandings to be largely circumstantial. That is because such arrangements or understandings, by their very nature, tend to be tacit and covert. It would be rare for such arrangements or understandings to be explicitly recorded in a document or documents. They are also rarely expressly made or entered into at a meeting, or during a communication involving all the alleged parties to the arrangement or understanding. It is therefore not surprising that the formation and existence of such an arrangement or understanding must be inferred from all the surrounding facts and circumstances. 429 Equally, it may be accepted that the fact that the Commission's case was primarily circumstantial in nature does not necessarily mean that it was weak. Some circumstantial cases can be very strong, whereas some cases based on direct evidence may turn out to be weak, such as cases where the direct evidence turns out to be unreliable or to lack credibility. 430 What is, however, somewhat surprising about the circumstantial nature of the Commission's case against Cussons, is that the Commission was able to and did call a number of employees and officers of one of the alleged parties to the Withhold Supply Arrangement. Unilever was alleged to be a party to the arrangement or understanding with Cussons. The Commission called a number of Unilever witnesses who were directly involved in the events and communications which were said to evidence that arrangement. Yet, none of them gave testimonial evidence of a communication with a Cussons officer, that they heard or were a party to, which was capable of directly proving that Cussons was a party to the alleged arrangement or understanding. Indeed, none of the Unilever witnesses said that they understood that Unilever was a party to any arrangement or understanding with Cussons, or that their actions could be explained on the basis of the existence of such an arrangement or understanding. 431 Equally, the Commission appears to have been able to compulsorily acquire a vast trove of documents from, at least, Cussons, Colgate, Unilever and Woolworths, relating to the transition to ultra concentrates. The documents included internal minutes, presentations and notes of the deliberations and decisions made by each of those companies over a period spanning more than one year. The documents also included records of communications, internal and external, relating to the transition. Yet none of those documents – which in hard copy format filled more than fifteen lever arch folders – properly considered in context provided direct evidence of Cussons' involvement in any arrangement or understanding of the sort alleged by the Commission. Nor did the documents when considered as a whole. 432 The other surprising feature of the Commission's circumstantial case is that the Commission continued to maintain, in written and oral submissions, that there was direct evidence that there was a Withhold Supply Arrangement and that Cussons was a party to it. The direct evidence, in the Commission's submission, included, in summary: the communication, to Cussons, in March and April 2008, of Colgate's initial proposal to Accord; the reference in some documents to the fact that an "in-principle agreement" had been reached at the Accord meeting on 30 April 2008; Mr Fatouros' 24 July 2008 email to Unilever, Colgate and Accord which referred to a "collective industry opportunity to shape the market's direction towards a more all round sustainable future"; the reference to an "industry agreement" in certain Cussons' documents; the NPDI document authored in July 2008 and sent to the Cussons' board in August which stated that "[r]etailers are driving timing based on collaborative advice and agreement to launch between Colgate, Unilever and [Cussons]"; and certain communications between Cussons and Woolworths which were said to amount to Cussons seeking information from Woolworths about the transition plans of the other suppliers and Woolworths communicating those plans to Cussons. 433 The question whether that evidence constituted direct or circumstantial evidence is a somewhat arid debate which is unnecessary to resolve. All of the evidence said to be direct evidence has already been addressed and analysed in the detailed chronology of the facts and evidence. More will be said about some of that evidence in the analysis that follows. It perhaps suffices at this stage to make two points about the evidence which the Commission contended constituted direct evidence. 434 The first point is that, properly considered, none of the evidence that the Commission claimed was direct evidence was capable, without more, of directly proving that Cussons was a party to an arrangement or understanding that included the Withhold Supply Provisions. The very most that could be said of the documents that were said to contain direct evidence is that, considered together with all the evidence, they might support an inference that Cussons was a party to such an arrangement or understanding. The Commission's case, in reality, was that the progress and pattern of the communications between the Suppliers and Woolworths, considered together with other circumstantial evidence, including evidence of motive and evidence of parallel conduct, supported an inference that Cussons was a party to such an arrangement or understanding. The circumstantial nature of the Commission's case is revealed by other features, or deficiencies, in the Commission's case which will be discussed shortly. 435 The second and related point is that the documents relied on by the Commission as comprising direct evidence of Cussons' involvement in the alleged arrangement or understanding could only be so considered if they are read in isolation and out of context. The Commission seized on just about any statement in any document that referred to an industry agreement, arrangement or initiative, even if it was not a document created by Cussons, even if the author of the document was not called by the Commission, and even if the timing and context of the statement tended to show that it had little if anything to do with the type of arrangement or understanding alleged by the Commission. Plainly that is not an appropriate or helpful approach to take to the evidence. It is obviously necessary to consider such statements in the context of the evidence as a whole, particularly in a case such as this where, as will be seen, the Commission was unable or unwilling to pinpoint exactly when and by whom the alleged arrangement or understanding was entered into. It is sufficient to give one example of this approach to the evidence. 436 The Commission relied on an email that Ms Capanna of Accord sent to all the Suppliers on 23 July 2008. This was one of the documents that was said to comprise or constitute direct evidence that Cussons was a party to an arrangement or understanding containing the Withhold Supply Provisions. That email included Ms Capanna's note of the "draft outcomes" of the Accord meeting on 30 April 2008, which includes a statement that the consensus of those at the meeting was that "in principle support was provided". That statement, however, must be read in the context of the following facts and evidence: the fact that the Accord proposal was one that was unilaterally sent to Accord by Colgate; evidence that showed that Cussons' initial internal reaction to the proposal was negative; the fact that Cussons obtained legal advice in the context of the first Accord meeting, which included advice that Mr Fatouros could attend the meeting, but should not agree to anything; the evidence, in particular, of Ms Moss (including her email of 30 April), which revealed that, to the extent that Mr Fatouros, on behalf of Cussons, agreed with, or provided support for, anything at the 30 April meeting, that agreement or support was highly qualified and related to the possibility of a "sustainability initiative" that involved little more than a consumer education and communication campaign which was considered to be desirable to avoid consumer confusion about the transition; and evidence that demonstrated that, in any event, ultimately nothing whatsoever was finally agreed through the auspices of Accord. Ms Capanna did not give evidence. The Commission did call Ms Moss, who gave direct evidence about what was said and done at the meeting. The Commission tended to ignore her evidence in that regard, however, because it rather inconveniently did not support its case. 437 More will be said later concerning the Commission's reliance on the Accord proposals and the communications concerning them. 438 The question whether it has been proved, on the balance of probabilities, that Cussons made an arrangement, or arrived at an understanding, with Colgate and Unilever which included the Withhold Supply Provisions, must be addressed having regard to the whole of the evidence. Statements that are made in documents must be read and considered in context. That is particularly so where, as in the case of Ms Capanna's email, and many others like it which were relied on by the Commission, the document, be it a note, presentation, email or any other documentary record of a meeting or communication, was not authored by and did not emanate from Cussons, and the author of the communication did not give evidence. When, by whom and how was the Withhold Supply Arrangement entered into? 439 As was noted at the very outset, the Commission's pleaded case did not specify exactly when the Withhold Supply Arrangement was entered into, or arrived at. It was simply alleged that the arrangement or understanding had been made or arrived at between 18 April 2008 and 31 January 2009. The first date in that range, 18 April 2008, was the date that Ms Capanna circulated Colgate's Accord proposal to, amongst others, Cussons, Colgate and Unilever. The significance of the end-date, 31 January 2009, was and is unclear from the pleading. The last of the meetings or communications that was specifically pleaded in the ASOC was an email from Mr Fuchs of Woolworths dated 5 January 2009. The chronology of key communications and events annexed to the Commission's closing submissions similarly did not disclose any specific event on 31 January 2009. 440 Nor did the Commission's pleaded case identify the officers of Cussons who were alleged to have caused Cussons to make the alleged arrangement, or arrive at the alleged understanding with Colgate and Unilever. Indeed, the pleading also did not identify the officer or officers of Colgate and Unilever who caused their respective companies to enter into or arrive at the alleged arrangement or understanding, save perhaps for Mr Ansell of Colgate. That is particularly surprising in the case of Unilever, given that Unilever appears to have been an immunity applicant and that the Commission was able to call witnesses from Unilever. 441 It would not be unfair to say that, on just about any view, the Commission's pleaded case in relation to the Withhold Supply Arrangement was imprecise and lacking in particularity and clarity. The Withhold Supply Arrangement was alleged to have been made or arrived at "by reason of" the "matters" alleged in paragraphs 13 – 49 of the ASOC. Those "matters" comprised various communications that occurred between 18 April 2008 and 5 January 2009, together with the fact that on 2 March 2009, each of Cussons, Colgate and Unilever allegedly introduced ultra concentrates across all of their brands, and ceased to supply standard concentrates to Woolworths, Coles and Metcash. The only other particulars of the Withhold Supply Arrangement included in the pleading were that it was partly written and partly oral and wholly or partly implied. The written and oral parts of the arrangement were said to be comprised of the various communications. The facts, matters and circumstances from which the arrangement was to be implied were again said to be the various communications and the simultaneous transition to ultra concentrates in early March 2009. 442 It would be equally fair to say that the precision and clarity of the Commission's case did not significantly improve once all of the evidence was tendered. There were, however, some shifts or developments in how the Commission put its case. Some were fairly subtle. Others were fairly fundamental. 443 In relation to the date on which the Withhold Supply Arrangement was alleged to have been entered into or arrived at, the Commission maintained, after all the evidence had been tendered, that it did not and could not contend that the arrangement was entered into at any particular time prior to January 2009. It did, however, submit that it would be open to the Court to find that the arrangement had been entered into by August 2008. The primary basis of that submission, it would seem, was the statement in Cussons' NPD1 document that "[r]etailers are driving timing based on collaborative advice and agreement to launch between Colgate, Unilever and [Cussons]". The NPD1 document was discussed in detail earlier in the context of the chronology of facts and evidence. For the reasons given then, on balance that statement in the NPD1 document was more likely than not simply a poorly worded reference to the discussions that had been taking place in the context of the Accord proposal. Considered in context, it does not support an inference or finding that Cussons had entered into, or arrived at any arrangement or understanding with Unilever and Colgate in August 2008, let alone one that included the Withhold Supply Provisions. 444 In relation to who, from Cussons, was said to be responsible for causing Cussons to enter into or arrive at the arrangement or understanding, in its closing submissions the Commission appeared to submit that two people may ultimately have been responsible in that regard: Mr Fatouros and Mr Davey. 445 The Commission's case that Mr Fatouros must have been ultimately responsible appeared to be based on the evidence concerning three events involving him: first, his attendance at the 30 April 2008 Accord meeting; second, his 24 July 2008 email to Ms Capanna and the other attendees at the 30 April Accord meeting; and third, his telephone call to Mr Pedersen of Colgate shortly after the October 2008 Accord meeting. The Commission also relied on the fact that Mr Fatouros did not give evidence and the Jones v Dunkel inference that it contended should be drawn from that fact. 446 The evidence and submissions concerning Mr Fatouros' supposed involvement in causing Cussons to enter into or arrive at the alleged arrangement or understanding, including the submissions based on Jones v Dunkel, are addressed in more detail later. It suffices to note at this stage that the Commission's submissions concerning Mr Fatouros have no merit. The evidence said to connect him to the alleged arrangement or understanding is at best flimsy. 447 As for Mr Davey, the precise basis upon which it was submitted that Mr Davey may have been responsible for causing Cussons to enter into the alleged arrangement or understanding was somewhat unclear. His evidence will be discussed further later. It is sufficient to note at this stage that it was never clearly or directly put to him in cross-examination that he was responsible for causing Cussons to enter or arrive at an arrangement or understanding that included the Withhold Supply Provisions. He was asked in general terms, in the context of the NPD1 document, whether he made any "collaborative agreement" with Colgate and Unilever. He denied that he had. It was also put to him that the essence of Project Mastermind was that there would be a simultaneous transition to ultra concentrates and that there would be an industry agreement to that effect. He denied both propositions. There is no sound basis to reject those denials, or to find that he had any knowledge of or involvement in any arrangement or understanding with Colgate and Cussons, let alone one containing the Withhold Supply Provisions. 448 In relation to how the Withhold Supply Agreement was entered into, as adverted to earlier, the Commission's case shifted or developed significantly from its pleaded case. In opening its case, Commission put its case in the following terms: …. those arrangements or understandings [including the Withhold Supply Arrangement] were classic 'hub and spoke' arrangements, in the sense that the Suppliers each relied on a central 'hub' to coordinate and implement their collusive activity. In the early part of their dealings, that 'hub' was the Accord industry body through which the Suppliers were able to meet and exchange information. It was at this stage that the initial proposal that gave rise to the collusive activity was formed. Later, after the Accord process was abandoned, Woolworths acted as the 'hub' for the dealings between the Suppliers, and coordinated the implementation of their arrangements or understandings. 449 When the Commission first flagged, in its opening address, that it put its case on the basis that the alleged "collusive activity" between Unilever, Colgate and Cussons was coordinated and implemented through Accord and then Woolworths, Cussons complained that it was taken by surprise and that this allegation had not been properly pleaded. There was and is some considerable merit in that complaint. It could fairly be said that the Commission's pleading did not clearly articulate that this was how it put its case. Indeed, as noted earlier, the Commission's pleading was anything but helpful in articulating exactly how the Commission put its case. In any event, Cussons' complaints did not ultimately materialise into any application. More significantly, it is in any event unnecessary to resolve the question whether the "hub and spoke" allegation and submission went beyond the Commission's pleaded case. That is because, as will be seen, they have no merit. 450 In its closing submissions, the Commission's case subtly shifted again. It moved away from the "hub and spoke" analogy, at least slightly, and put its case on the basis that there was a series of "vertical arrangements" between each of the Suppliers and Woolworths. Those vertical arrangements presumably included the Withhold Supply Provisions. The Commission submitted that Cussons made its vertical arrangement with Woolworths in circumstances where it knew that both Unilever and Colgate were also separately making the same arrangements with Woolworths. In the Commission's submission, the circumstances in which each of the Suppliers entered into vertical arrangements with Woolworths were such that they gave rise to, or evidenced, a horizontal arrangement or understanding between the Suppliers. 451 The Commission's submissions concerning the "hub and spoke" or vertical and horizontal arrangements are considered in detail later. The Unilever witnesses 452 On the Commission's case, Unilever was a party to the Withhold Supply Arrangement. It was not, however, a party to the proceeding. That was explained, in the Commission's submissions, on the basis that Unilever was an "immunity applicant" in respect of the conduct alleged in the proceeding. There was, perhaps understandably, no evidence of the circumstances in which Unilever came to be an immunity applicant, or the terms and conditions of its agreement or arrangement with the Commission in that regard. Nor is it appropriate to speculate about those matters. The point is that, while it is no doubt relevant to consider Unilever's conduct in determining the case against Cussons, the Court is not asked to, and will not, make any direct findings as to whether Unilever's conduct contravened the Act in any respect. 453 As has already been noted, the Commission called eight former officers or employees of Unilever as witnesses in its case. Those witnesses were essentially the key officers who were involved in Unilever's Project Faster and who, in that context, dealt with Accord, Woolworths and, to a considerably lesser extent, Colgate and Cussons, in relation to the transition to ultra concentrates. As has already been adverted to, the affidavit evidence in chief of these witnesses essentially comprised a chronological excursion through Unilever's internal documentation concerning Project Faster, and its internal and external documentary communications relating to the transition. For the most part, their evidence in chief did not add much, if anything, of significance to the documentary evidence. 454 Two other important points concerning the evidence of the Unilever witnesses should be reiterated. First, each of the Unilever witnesses presented as an honest, credible and reliable witness in respect of the matters about which they gave evidence. There is no reason to doubt their evidence. Neither party submitted otherwise. 455 Second, and more importantly, the evidence given by the Unilever witnesses was more notable for what it did not include, than what it included, particularly in circumstances where Unilever was said to have entered into the Withhold Supply Arrangement with Cussons and Colgate. None of the witnesses gave evidence about any meeting or conversation which they had with anyone from Cussons, or which they were present at, in which there was a discussion about an arrangement or understanding between Unilever, Cussons or Colgate which included the Withhold Supply Provisions. Perhaps even more significantly, none of the Unilever witnesses gave evidence that they were aware of or understood, or were carrying out their activities in relation to Project Faster on the basis of, an arrangement or understanding with Cussons and Colgate which contained the Withhold Supply Provisions. 456 As for meetings and conversations with officers or employees of Cussons: Ms Moss gave evidence concerning the Accord meetings attended by Mr Fatouros and Mr Davey; Mr Basha gave evidence in relation to a telephone call he made to Ms Gill; and Mr Campbell gave evidence concerning a telephone call he made to Mr Courtier. None of that evidence provided any, or any significant, support for the Commission's case. Indeed, it largely ran counter to it. 457 Ms Moss attended the Accord meetings on 30 April, 25 August and 10 October 2008. Those meetings were attended by Mr Fatouros, in the case of the 30 April meeting, and Mr Davey, in the case of the 25 August and 10 October 2008 meetings. The Accord meetings will be considered further later. It need only be noted at this stage that Ms Moss' evidence concerning those meeting indicated quite clearly that nothing said by Mr Fatouros or Mr Davey could possibly be said to amount to agreeing or acceding to an arrangement or understanding containing the Withhold Supply Provisions. Nor could it be said that anything said or done by Mr Fatouros and Mr Davey at the meetings even suggested a willingness on the part of Cussons to enter into any such arrangement or understanding. Indeed, quite the contrary. 458 Mr Basha gave evidence of his telephone conversation with Ms Gill on 19 August 2008. That call was instigated by Mr Basha. Mr Basha inquired about Cussons' progress in relation to the transition to ultra concentration. His evidence was that Ms Gill did not disclose anything about Cussons' plans and that he had the impression that Ms Gill felt uncomfortable discussing the topic. If anything, that evidence went against any suggestion that Cussons was a party to any arrangement or understanding with Unilever at this time, at least as far as Mr Basha or Ms Gill were aware. If Mr Basha was aware of the existence of any such arrangement or understanding, there would have been no need to call Ms Gill. And if Ms Gill was aware of any such arrangement or understanding, she would not have been so coy and would not have given the impression of being uncomfortable. 459 Much the same can be said concerning Mr Campbell's evidence about his conversation with Mr Courtier. His evidence was that the telephone call was instigated by him. He gave Mr Courtier the impression that it was a social call as a tactic to extract market intelligence from Mr Courtier. That tactic would have been unnecessary if Mr Campbell had been aware that there was an arrangement or understanding on foot with Cussons. Indeed, the call would have been unnecessary. While Mr Campbell's evidence concerning what Mr Courtier said was somewhat unclear, he nonetheless agreed that whatever Mr Courtier said, it did not involve Mr Courtier giving any form of commitment about Cussons' timing. 460 As for the absence of any evidence from the eight Unilever witnesses concerning their knowledge of any arrangement or understanding between Unilever and Cussons, the Commission endeavoured to explain that surprising lacunae in the evidence on the basis that such evidence was unnecessary and would, in any event, have been inadmissible. Neither of those explanations is persuasive. 461 Each of the Unilever witnesses was involved in making decisions and taking action in relation to Unilever's Project Faster. If any of those decisions or actions were made or taken as a result of any commitment arising from an arrangement or understanding between Unilever, Cussons and Colgate, it most likely would have been relevant and admissible for the witnesses to give evidence about their knowledge of any such arrangement. Such evidence would have explained their actions. It should also be noted that the Commission supported the admissibility of a good deal of evidence contained in the Unilever witnesses' affidavits on the basis that the state of mind and knowledge of the witness concerning issues relating to the transition to ultra concentrates was relevant. The Commission's affidavit evidence was replete with statements about the witness' understanding of statements in documents. Equally, Cussons' witnesses were frequently cross-examined about their knowledge and state of mind concerning their competitors' transition to ultra concentrates, and their understanding about what statements in documents meant. The clearest example of the latter point was the cross-examination of Mr Davey concerning the NPD1 document. 462 Some of the Unilever witnesses also gave evidence, in cross-examination, which positively suggested that they were unaware of any arrangement or agreement with Cussons. Indeed, even by late 2009, they remained unsure of what Cussons was doing. The clearest example of this was the evidence of Ms Katz. Ms Katz was heavily involved in the planning for Project Faster, including managing the risks that might arise if Unilever's competitors did not transition in 2009. She was cross-examined about an email she received in late October 2009 which referred to the transition to ultra concentrates that had occurred, or was taking place, in Turkey, and the role played by the suppliers Proctor & Gamble and Henkel in that transition. Her evidence was as follows: Q: What did you expect that reference to Procter & Gamble and Henkel's role in Turkey to be? A: My understanding was that there was an agreement in Turkey for transition to occur, and in spite of the agreement Procter & Gamble then entered the market not in accordance with what was agreed by the industry association in that market. Q: You didn't think at this point, though, that there was any agreement with Cussons about entering the market and transitioning, I take it? A: There was no agreement with Cussons. Q: No. Is it also accurate to say that you didn't have the sense that there was any commitment by Cussons to do it, that is to transition to super-concentrates? A: I think we weren't sure as to their degree of commitment. 463 Ms Katz was also cross-examined about contingency plans that she was giving consideration to in late October 2008. One of the contingency plans was continuing to manufacture and supply a standard concentrate. Ms Katz's evidence was as follows: Q: Does that reflect the fact that there was still a contingency plan in play in late October at Unilever to deal with the possibility that one of your competitors would not convert to super-concentrates? A: I think it was more to do with the fact that should we need to revert to a – the non-super-concentrated, what was the viability of actually being able to make it happen? Q: The need to do so, though, would only arise if the launch failed because a competitor had not made the transition? A: That's the most likely reason, yes. Q: Thank you. And that was one of the reasons for the contingency planning remaining in place at that stage; is that right? A: Correct. 464 Ms Katz's evidence about those matters was inconsistent with any suggestion that she was aware of the existence of any arrangement or understanding between Unilever and Cussons. The Commission appeared to submit that Ms Katz's evidence could be explained on the basis that she was referring to the risk that Cussons would cheat on the arrangement or understanding that it had made or reached with Unilever and Colgate. That was not the effect of Ms Katz's evidence. It is inconsistent with her somewhat emphatic statement that "[t]here was no agreement with Cussons". If the Commission had wanted to submit that the contingency plans referred to by Ms Katz were contingency plans concerning what Unilever would do if Cussons cheated on the arrangement or understanding, she should have been re-examined on this aspect of her evidence. She was not. Colgate and Woolworths 465 On the Commission's case, Colgate was also a party to the Withhold Supply Arrangement and Woolworths coordinated and implemented the arrangement. Both Colgate and Woolworths were originally parties to the proceeding, as was Mr Ansell. In its opening submissions, the Commission noted that Colgate, Woolworths and Mr Ansell had settled with the Commission on terms agreed with the Commission. There was, however, no evidence concerning the settlement of the proceedings insofar as it involved those parties, or the terms of the settlement or settlements, or the circumstances in which they were entered into. The circumstances that may have led those parties to settle, and the terms of the settlement, are not matters that can or should be the subject of speculation. Nor can the fact that those parties apparently settled with the Commission be used in any way against Cussons. The only significance of the settlement of the proceedings insofar as they involved Colgate, Woolworths and Mr Ansell, is that it is not necessary for the Court to consider and make findings about whether their conduct contravened the Act in any way. 466 It is also worth reiterating that the Commission called no evidence from current or former officers of Colgate or Woolworths. The evidence concerning the role played by Colgate and Woolworths was primarily documentary, though some of the Unilever witnesses also gave evidence about their dealings and communications with officers from both Colgate and Woolworths. The relevance and significance of the Accord proposal and discussions 467 The evidence concerning the two iterations of Colgate's proposal to Accord, and the meetings of Accord and its members, including Colgate, Unilever and Cussons, has already been considered at length. It is unnecessary to repeat it. The pertinent question is whether that evidence was capable, in any meaningful way, of supporting the Commission's case that at some time during the period from 18 April 2008 to 31 January 2009, Cussons entered into, or arrived at, an arrangement or understanding with Colgate and Unilever that included the Withhold Supply Provisions. 468 The Commission's reliance on the evidence concerning Colgate's Accord proposals, and the discussions that occurred in relation to them, is somewhat difficult to understand. The Commission submitted that either the circulation of Colgate's initial proposal to Accord, or the discussions concerning the proposal that occurred at the 30 April meeting, was the "genesis" of the Withhold Supply Arrangement. Exactly what was meant by that was unclear. It was contended that from the time Accord circulated Colgate's proposal to the Suppliers, the Suppliers "evinced an intention" to jointly transition to ultra concentrates, to transition in 2009, and to transition to a level of 2x concentration. It was also submitted that, by reason of the Accord proposal or the discussions concerning it, the "previously inchoate plans of the Suppliers to transition to Ultra Concentrates began to solidify" and that "the Suppliers each began to work towards a joint transition to Ultra Concentrates in early 2009 utilising a concentration level of 2x". While the Commission acknowledged that the meeting of 25 August 2008 was the beginning of the demise of the Accord proposal as an agreement to which the Suppliers would accede, it submitted that by this time "the essential elements of the transition had already been put in place". 469 Each of those submissions is rejected. They are simply not supported by the evidence, considered as a whole. 470 At risk of repetition, the salient points concerning the proposals put to Accord and the discussions that occurred in relation to them are as follows. 471 First, by the time Colgate's proposal to Accord was circulated to the Suppliers, including Cussons, on 18 April 2008, each of the Suppliers had for some time been independently planning for the introduction of ultra concentrates some time in 2009. Cussons' internal documents reveal that from as early as possibly January 2008, and certainly by April 2008, it was planning to introduce ultra concentrated versions of its laundry powder brands by February 2009. Those plans were formed entirely independently of any communication from Accord. That is not to say that Cussons' plans had completely solidified by that time. The project was a very large and complicated one. Throughout 2008, Cussons continued to consider whether it would transition all of its brands to ultra concentrates in 2009, and the precise timing of the transition. The evidence showed that its planning and decisions concerning the timing and scope of its transition were as much influenced by technical considerations relating to the formulation and manufacture of ultra concentrated versions of their detergents as anything else. 472 Second, the initial Accord proposal was essentially a proposal that was unilaterally put forward by Colgate. The Commission's submissions at times appeared to proceed on the erroneous premise that somehow or other Cussons was involved in the formulation and dissemination of that proposal. It was not. Colgate's precise motivations and intentions in formulating and causing Accord to disseminate the proposal are somewhat unclear. It may well have been Colgate's intention to use the proposal as a means to discuss a joint and simultaneous transition to ultra concentrates in early 2009. Even if that be so, that intention cannot be imputed to Cussons. 473 Third, the evidence of Mr Davey, in particular, supported by Cussons' contemporaneous business records, was that Cussons' reaction to the proposal was negative from the outset. That negative view did not change. Indeed, Cussons' unwillingness to enter into any agreement in accordance with either the initial proposal or the revised proposal only hardened. 474 Fourth, the Commission's submissions focus on only one aspect of Colgate's proposal: the proposed "voluntary agreement to transition all currently non-complying laundry detergents by an agreed date in 2009". The proposal contained a number of other suggestions concerning definitions, logos, standards and consumer communication. Indeed, the evidence showed that as the proposal evolved, it came to concern little more than a "sustainability initiative" that involved forms of education or communication that might avoid consumer confusion. 475 Fifth, Cussons obtained legal advice in the context of both the initial and the revised proposals. The legal advice in relation to the initial proposal was that there were potential competition law issues with the proposal and that, while Mr Fatouros could attend the meeting on 30 April 2008 and engage in discussions concerning the proposal, he should not agree or give any impression that he would agree to any aspect of it. The same advice was given in relation to Mr Davey's attendance at the later meetings. The Commission criticised Mr Davey and Cussons about the legal advice. None of those criticisms have any merit for the reasons already given. 476 Sixth, the weight of the evidence concerning the 30 April 2008 meeting suggests that Mr Fatouros abided by the advice he and Cussons had received: he did not agree to any of the proposals. Ms Moss' evidence was to the effect that, while she and Mr Fatouros agreed in principle with some sort of "sustainability initiative", which essentially involved communications to avoid consumer confusion, they did not agree on the "executional detail" of the specific proposal. The "executional detail" included specific details that had to do with weight, pack size, performance and transition by an agreed date: all the "anticompetitive detail". And in any event the "next steps" depended on seeking and obtaining legal advice, and advice from the Commission, about the proposal. 477 It is true that, on 23 July 2008 Mr Fatouros sent a somewhat positive and optimistic email in reply to Ms Capanna's email of the same date. That email referred, in rather lofty, if not grandiose, terms, to "a collective industry opportunity to shape the market's direction towards a more sustainable future". That statement is so devoid of detail as to be effectively meaningless. In any event, Mr Fatouros' equally florid reference to the need for a review of the proposal and a "transparent and inclusive but also pragmatic and results oriented steering team" suggested that in fact nothing of any substance had been formulated, let alone been agreed to. 478 Seventh, the Commission's reliance on statements in various Accord-related documents to "in principle support" or "agreement in principle" was misplaced. Read fairly and in the context of all of the evidence concerning the 30 April meeting, those statements do not support the Commission's contention that an agreement, arrangement or understanding had been made or arrived at during the 30 April meeting that the Suppliers would jointly and simultaneously transition to ultra concentrates in 2009. Whatever it was that had been agreed or supported "in principle", the agreement or support was heavily qualified and, again, seemed to involve little more than support for some sort of joint education or communication initiative. The evidence, considered as a whole, on balance did not support the Commission's contention that an agreement, arrangement or understanding concerning a simultaneous and uniform transition to ultra concentrates by each of the Suppliers was made or reached at the 30 April Accord meeting. 479 Eighth, it may be accepted that for some months after the 30 April meeting, Cussons still saw that there might be some prospect that some agreement could be reached through Accord in respect of the transition to ultra concentrates. Exactly what that agreement might be, however, was unclear. In the Cussons workshop held on 16 June 2008, one of the project objectives was said to be "engage at industry level to define initiative". And, as has already been discussed in some considerable detail, Cussons' NPD1 document referred to "collaborative advice and agreement to launch between Colgate, Unilever and [Cussons]". It may be inferred that this statement was a reference to the discussions that were continuing in respect of the Accord proposal. It does not follow, however, that any arrangement or understanding was ever made or arrived at under the auspices of Accord. 480 Ninth, the later Accord meetings confirmed that no agreement, arrangement or understanding concerning the proposal or revised proposal had been made or arrived at, or was likely to ever be made or arrived at between the Accord members, including Cussons. The proposals went nowhere. 481 Tenth, it may be that in the course of the discussions at the Accord meetings, the meeting participants may have revealed some aspects of their respective companies' thoughts and plans concerning the transition to ultra concentrates. The evidence does not, however, support the proposition, which appeared to be inherent in some of the Commission's submissions, that this was done intentionally by Cussons. The evidence does not support the inference or conclusion that Cussons intentionally divulged information concerning its transition plans and progress to the other Suppliers at or in the context of the Accord proposal. Nor does the evidence support the proposition that Cussons' participation in the Accord meetings and discussions involved some sort of intentional "signalling" by Cussons of its plans or intentions, or a means by which the Suppliers could reach some sort of tacit understanding. No such proposition was put to Mr Davey in cross-examination. 482 Finally, the evidence concerning the Accord proposals and meetings must be considered in the context of the evidence as a whole. That evidence showed that after the Accord proposals and discussions, Cussons remained unclear about its competitors' precise plans for transitioning to ultra concentrates. As will be seen, that remained the case until, at the very least, late October and November 2009, when Cussons continued to conduct "war gaming" sessions concerning its transition plans. Equally, the evidence quite plainly shows that both Colgate and Unilever remained not only unclear about Cussons' plans, but were suspicious that Cussons might be a "rogue" player which held back its transition. As noted earlier in the context of Ms Katz's evidence, that evidence cannot be explained away on the basis that it might involve a concern that Cussons would cheat on any arrangement or understanding. Direct communications between Cussons and the other Suppliers 483 The evidence revealed that there were very few direct communications between Cussons and the other Suppliers. In fact there were only seven. They were: Mr Fatouros' attendance at the 30 April 2008 Accord meeting; Mr Fatouros' 23 July 2008 reply email to Ms Capanna of Accord, which was copied to Ms Moss of Unilever and officers of Colgate, amongst others; Mr Basha's telephone call to Ms Gill on 19 August 2008; Mr Campbell's telephone call to Mr Courtier on 21 August 2008; Mr Davey's attendance at the Accord meetings on 25 August and 10 October 2008; and Mr Fatouros' telephone call to Mr Pederson of Colgate in October 2008. 484 The evidence concerning each of those direct communications has already been discussed in some detail. It suffices to say that, when considered in context and as part of the whole of the evidence, those direct communications do not significantly advance the Commission's case. Indeed, in most respects, they are contrary to it. Communications between Cussons and Woolworths 485 The limited direct communications, both in terms of number and significance, between Cussons and the other Suppliers perhaps explains why the Commission's case, as ultimately articulated, placed considerable emphasis on the role played by Woolworths. Before considering the Commission's arguments concerning "hub and spoke" and vertical and horizontal arrangements, it is necessary to say something briefly about the communications between Cussons and Woolworths. 486 The relevant meetings and communications between Cussons and Woolworths were: a meeting between Mr Appleby and Ms Gill and Mr Fuchs on 13 June 2008; a conversation between Mr Appleby and Mr Fuchs on 1 August 2008; a workshop on 25 August 2008 attended by Mr Wilson, Ms Baldwin and Ms Gill on behalf of Cussons and Mr Fuchs on behalf of Woolworths; a meeting between Mr Coghlan and Mr Fuchs on 23 September; a meeting between Mr Messina of Cussons and Mr Fuchs on 7 October 2008; emails sent by Mr Fuchs on 31 October 2008 and some emails sent by Mr Fuchs in late November and December 2008. The content of those meetings and discussions is detailed in the earlier chronology of facts and evidence. 487 There was nothing unusual, let alone nefarious or improper, about Cussons' employees meeting with, or engaging in communications with Mr Fuchs and others at Woolworths in relation to Cussons' laundry detergents and the proposed transition to ultra concentrates. Woolworths was no doubt one of Cussons' major customers. As such, it is likely that Cussons representatives with customer responsibility for Woolworths would have had fairly regular meetings with Woolworths in any event. The changeover to ultra concentrates was a major initiative that required major planning, both on the part of Cussons and Woolworths. It is scarcely surprising in those circumstances that Cussons would want to keep Woolworths fully apprised of its plans and proposals in that regard, and vice versa. That would include the timing, nature and scope of the transition. 488 It is equally not surprising that both Colgate and Unilever were separately meeting with Woolworths during 2008 and that, in the course of those meetings, both Colgate and Unilever presented their plans to Woolworths in relation to the introduction of ultra concentrates. Those meetings were again mostly with Mr Fuchs, who appeared to have been the Woolworths officer with the main responsibility for dealing with the Suppliers, at least in relation to the move towards ultra concentrates. Woolworths was no doubt a major customer for both Colgate and Unilever. It is likely that they would have had regular meetings in any event. The evidence reveals that by late 2007 or early 2008, both Unilever and Colgate were independently planning to introduce ultra concentrates at some time in 2009. Those plans plainly needed to be discussed with one of their major customers. 489 The evidence revealed that, in the course of the separate meetings that Mr Fuchs, on behalf of Woolworths, had with each of the Suppliers during 2008, he provided the Suppliers with feedback concerning their plans relating to the transition to ultra concentrates. That included feedback in relation to the proposed timing and scope of the transition. The evidence revealed that in the course of providing that feedback to each of the Suppliers, Mr Fuchs at times disclosed what he understood to be the plans and intentions of their competitors. In his meeting with Mr Appleby and Ms Gill of Cussons in mid-June 2008, for example, Mr Fuchs disclosed that his understanding was that the "industry" would move to ultra concentrates in June or July 2009 as a category "hard change". Similarly, it would appear that Mr Fuchs provided Mr Appleby with some information concerning Unilever and Colgate's proposed pack and scoop sizes at a meeting on 1 August 2008. 490 It is unnecessary, for the purposes of this proceeding, which is against Cussons alone, to make any finding as to why Mr Fuchs at times disclosed such information to the Suppliers. That said, it is hardly surprising that this occurred. It is difficult to imagine that, by early 2008, each of the Suppliers was not in any event well aware that their competitors were also planning to transition to ultra concentrates in the not too distant future. That is something which had occurred in a number of overseas markets in which each of the Suppliers, or at least their parent companies or related entities, operated. Certainly by April 2008 each of the Suppliers was generally aware that their competitors were also planning to transition at some time in 2009. It is likely that Mr Fuchs would have been aware of that fact. 491 More significantly, Woolworths plainly had to consider and plan for how it was going to manage the logistics of the changeover. Woolworths was aware that each of the Suppliers was planning to transition to ultra concentrates. That was plainly going to be a major logistical and administrative exercise from Woolworths' perspective. In those circumstances, Woolworths plainly needed to know precisely when each of the Suppliers was proposing to changeover. It may also reasonably be inferred that it was in Woolworths' own commercial interests to endeavour to bring about a situation where each of the Suppliers changed over to ultra concentrates at about the same time. It is equally reasonable to infer that, from Woolworths' own perspective, it was preferable for that to occur in the context of its major category review which was, in any event, to occur in or around February 2009. It is scarcely surprising, in those circumstances, that Mr Fuchs at times disclosed to each of the Suppliers what he understood to be the position of their competitors in terms of the timing of the transition. He did so because it was in Woolworths' interests to do so. 492 The more important issue, in terms of the Commission's case against Cussons, is the state of mind and intentions of the Cussons officers when they met with Woolworths to discuss Cussons' plans for transitioning to ultra concentrates. Did they know or intend that the information they provided to Woolworths about their plans would be conveyed to Colgate and Unilever? When Mr Fuchs conveyed to them his understanding of what Colgate and Unilever were doing in relation to the transition, did the Cussons officers know or believe that this was somehow being done with the tacit, or perhaps even express, consent or approval of Colgate and Unilever? Did they know or believe that Woolworths was somehow being used as a "hub" through which the Suppliers could exchange information for the purposes, ultimately, of reaching an arrangement or understanding concerning the transition? 493 The Commission's case, as ultimately articulated in its submissions, appeared to proceed on the basis that the answer to those questions was "yes". While not expressly pleaded, that appeared to be the basis of its submissions concerning the "hub and spoke" type arrangement. The Commission submitted that, at least after the abandonment of the Accord process, Cussons and the other Suppliers knowingly and intentionally exchanged information through their meetings and communications with Woolworths. 494 The evidence, however, does not sustain any such findings. There is certainly no direct evidence that the relevant Cussons officers knew or intended that the information that they provided to Mr Fuchs would be conveyed to the other Suppliers by Mr Fuchs, or that they believed or understood that the information that Mr Fuchs conveyed to them about Colgate and Unilever's plans was provided with the consent or approval of Colgate and Unilever. Nor does the evidence as a whole reasonably permit or support the drawing of any such inferences. 495 It should also be noted that it was not put to Mr Wilson that, when he attended the meeting with Mr Fuchs on 25 August 2008, he knew or intended that the information he gave to Mr Fuchs would be conveyed to Unilever and Colgate. Nor was it suggested to him that he knew or believed that such information as Mr Fuchs provided about the plans of Unilever and Colgate was being provided with the tacit or express consent or approval of Unilever and Colgate. 496 The Commission relied on the email that Mr Fuchs sent to all the Suppliers on 11 August 2008. In that email, Mr Fuchs stated that it was his "understanding that all vendors will be changing over to super/ultra concentrates in line with our next laundry review". He asked the Suppliers to let him know if that was not the case so that Woolworths could "plan for the takeover". There was no evidence to suggest that this was anything other than a communication sent by Mr Fuchs for the very purpose referred to in the email: to enable Woolworths to plan for the changeover. It says nothing about the knowledge or intentions of Cussons concerning its communications with Woolworths. There is no evidence that Cussons had anything to do with Mr Fuchs' decision to send the email or knew anything about it until it was received. It is also worth noting that there is no evidence that Cussons responded to this email, and certainly no evidence that it copied any such response to the other Suppliers. 497 The Commission's submission that Cussons knowingly or intentionally exchanged information with Colgate and Unilever through the "hub" of Woolworths is rejected. Other aspects of the Commission's case concerning the position of Woolworths and the existence of an alleged "hub and spoke" type arrangement are addressed in more detail later. 498 It should also be noted that the Commission was critical of Cussons and the other Suppliers for using the information that they received from Mr Fuchs in their planning and decision-making in relation to the transition. That criticism, even if justified, is entirely beside the point. The same can be said about the Commission's criticism of the fact that Ms Baldwin, in her email of 14 July 2008, asked another Cussons employee to "seek out any information … as to Colgate and Unilever's actions" from Mr Schadel of Coles. Whatever one might think of Ms Baldwin's actions in that regard, it is not probative of whether Cussons had entered into an arrangement with Colgate and Unilever. Indeed, it tends to suggest that there was no such arrangement: why else would it be necessary for Ms Baldwin to ask one of her colleagues to "seek out" such information from Coles. Communications between Cussons and Coles 499 Ms Baldwin's email of 14 July 2008 also provides a convenient segue to another point that can be made concerning the Commission's case that Woolworths was a "hub" through which Cussons knowingly exchanged information with Colgate and Unilever. 500 There was evidence that Cussons representatives also met with Cussons' other major customer, Coles, during the same period. It is also readily apparent that Coles was meeting with Colgate and Unilever concerning the introduction of ultra concentrates. The discussions between representatives of Cussons and Coles canvassed Cussons' plans in relation to the introduction of ultra concentrates in 2009. The evidence of the communications between Cussons and Coles also revealed that, just like Woolworths, Coles provided feedback to Cussons which included, on occasion, information about what the other Suppliers were doing. As early as 18 January 2008, it would appear that Mr Schadel of Coles told Mr Wilson of Cussons that both Colgate and Unilever would be launching ultra concentrates in February 2009. Likewise, on 23 June 2008, Mr Schadel told Ms Gill that Unilever and Colgate had also been talking to him about the transition to ultra concentrates, that at least one of them would be "ready to go" in February, that his preference was for "everyone to go at once" and that the estimated timing for Cussons' competitors was April or May 2009. 501 The Commission did not contend that Coles was a "hub" through which the Suppliers exchanged information concerning the transition. Nor did it submit that each of the Suppliers well knew that the information they provided to Coles would be passed onto the other Suppliers. It is, however, unclear why Coles was, or should be considered to be, in any different position to Woolworths. The evidence suggested that Coles was taking a very similar approach to Woolworths in its dealings with the Suppliers concerning the proposed transition. Just like Woolworths, it appeared to be engaging with the Suppliers so that it could properly plan for the transition. Communications between Cussons and Woolworths in late 2008 and early 2009 502 Before specifically addressing the Commission's submissions concerning "hub and spoke" and vertical and horizontal arrangements, it is necessary to say something briefly about one other issue concerning some of the Commission's reliance on some of the communications between Cussons and Woolworths in late 2008 and early 2009. 503 The relevance and weight to be given to the communications between Cussons and Woolworths in the last few months of 2008 and early 2009 was a point of contention between the parties. The dispute concerned the point at which Cussons became committed, or "irreversibly bound", to transition to ultra concentrates. In short, the Commission contended that Cussons was not irreversibly bound to transition to ultra concentrates until Cussons' board approved NPD3 on 22 January 2009. The Commission relied, in that respect, on Mr Cunningham's evidence that formal approval to launch Project Mastermind was not given until that date. There is a distinction, it was submitted, between planning to transition and being irreversibly bound. It followed that the correspondence in late 2008 and January 2009 was relevant to a determination of the existence of an arrangement or understanding. 504 Cussons submitted that it was wrong to suggest that it was not irreversibly bound to transition until the approval of NPD3. In Cussons' submission, the key decisions concerning which products the Suppliers would supply all occurred in the period from June to September 2008. The available inference in such circumstances was that, whatever information Cussons may have received via Woolworths concerning what Unilever and Colgate were saying and doing from at least September or October 2008 onwards, Cussons was going to transition to 2x ultra concentrates in accordance with Woolworths' launch plans regardless. Cussons conceded that its board could have, in theory, not approved NPD3. However, that would have meant ceasing production, unpacking delivery trucks, breaching supply agreements and jeopardising its relationship with major customers. In Cussons' submission, it was fanciful to suggest that this was a realistic possibility. 505 There is considerable force in Cussons' submissions in that regard. The evidence does not support a finding that Cussons was only irreversibly bound from 22 January 2009. As Cussons pointed out, preparations for the transition were significantly advanced well before that date. So much is clear from the fact that some of Cussons' ultra concentrated products were on Woolworths' shelves approximately three weeks later. The Commission's submission ignored the commercial reality that from mid-2008 onwards Cussons was highly invested in preparing for the transition to ultra concentrates, and would not lightly have abandoned its plans. However, that does not necessarily mean that Cussons plans were "irreversible". It was theoretically possible that if Cussons had learned that one or both of the other Suppliers suddenly deferred or abandoned their plans to transition in late 2008, that information may have caused Cussons to reconsider or change its plans. Nevertheless, the communications between the Suppliers and Woolworths from mid-2008 onwards should be considered in light of the fact that the key decisions in respect of Cussons' transition to ultra concentrated detergents had been made by September 2008. 506 In any event, it is clear from the terms of most of the communications between Cussons and Woolworths between October 2008 and February 2009 that they concerned details relating to final planning and implementation of Woolworths' launch of ultra concentrates in March 2009. They did not evidence the formation or existence of any arrangement or understanding between Cussons and the other Suppliers. "Hub and spoke" and vertical and horizontal arrangements 507 As has already been explained in some detail, ultimately the Commission's case was that the Suppliers entered into, or arrived at, an arrangement or understanding containing the alleged Withhold Supply Provisions via a series of communications through a third party: initially Accord and then Woolworths. The Commission argued that the "vertical" communications and arrangements between the individual Suppliers and Accord, and then Woolworths, supported the conclusion or inference that there was a "horizontal" arrangement between the Suppliers because each Supplier knew that the other Suppliers had entered into similar vertical arrangements. Adopting the "hub and spoke" metaphor, Accord or Woolworths was the hub and the vertical arrangements between each of the Suppliers were the spokes. The Commission's case was, in effect, that because each of the Suppliers knew of the existence of the other "spokes", there was a horizontal agreement – a "rim" if one is to continue to use the metaphor – between the Suppliers. 508 The Commission relied, in support of this aspect of its case, on two cases in particular: British Basic Slag Ltd v Registrar of Restrictive Trading Agreements [1963] 1 WLR 727; 2 All ER 807 and the Super League Case. 509 In British Basic Slag, eight steel manufacturing companies were shareholders of British Basic Slag (BBS). Each of the steel companies had appointed a director to the board of BBS. In 1954, each of the steel companies entered into separate agreements with BBS. Under those agreements, each of the steel companies undertook to sell to BBS all of the slag that they produced, owned or controlled, and not to sell slag to any other person without BBS's consent. The agreements had been discussed at board meetings of BBS. Each agreement was indorsed with a memorandum listing the companies which it was intended would execute similar agreements. After each of the steel companies had executed its agreement with BBS, the agreements were executed by BBS pursuant to a board resolution voted on at a meeting attended by a number of the directors nominated by the respective steel companies. 510 Perhaps not surprisingly, on those facts, the Court of Appeal in the United Kingdom found that there was an arrangement between the steel companies. Willmer LJ said (at 814): As to the facts of the present case, I agree with the submission made on behalf of the registrar that it is wholly unrealistic to say that the companies never communicated or consulted with each other about the making of their agreements with Basic. This may be true enough in the sense that they did not write letters to each other about it. But each company had its nominee as a member of the board of Basic, and it is clear that these nominees not only had, but used, the opportunity to discuss with each other what their companies were going to do in relation to renewing their agreements with Basic. 511 Willmer LJ was particularly persuaded by the fact that, when a draft of the agreement was being considered, the board minutes of BBS recorded that "various amendments were requested and subject to the approval of these amendments by the directors individually the board gave their approval". The board minute also recorded that the "directors present indicated that their companies would be willing to renew". Willmer LJ reasoned (at 814) that the "contrast between the collective approval of the board and the individual approval by the directors [was] illuminating; for in giving their individual approval the directors can only have been speaking for their respective companies". 512 Diplock LJ considered that the question was whether the fact that each of the steel companies entered into identical "vertical" agreements with BBS was a pure coincidence or was done under a "horizontal" arrangement between the steel companies. His Lordship found (at 819) that the suggestion that it was a coincidence "offends credulity". 513 Diplock LJ also stated (at 819) that "it is sufficient to constitute an 'arrangement' between A and B if (i) A makes a representation as to his future conduct with the expectation and intention that such conduct on his part will operate as an inducement to B to act in a particular way; (ii) such representation is communicated to B, who has knowledge that A so expected and intended, and (iii) such representation or A's conduct in fulfilment of it operates as an inducement, whether among other inducements or not, to B to act in that particular way". His Lordship then said (at 819): On the evidence in the present case it is plain beyond peradventure that the knowledge of each member acquired at the board meetings of Basic from statements made by the nominees on that board of his fellow members that each of his fellow members was going to enter into a contract with Basic in the terms of the vertical contract, or at any rate that any of his fellow members who entered into a contract for the sale of fertilisers to Basic would do so on substantially the same terms as those of the vertical contract, operated as an inducement to each member himself to enter into a contract with Basic in the same terms as those of the vertical contract. If this is not an 'arrangement' I do not know what is. 514 The Commission appeared to argue, by analogy with British Basic Slag, that the evidence in this proceeding demonstrated that: (i) Cussons made representations as to its future conduct in relation to its transition to ultra concentrates in terms of the Withhold Supply Provisions with the expectation and intention that such conduct on its part would operate as an inducement to Colgate and Unilever to act in a particular way; (ii) those representations were communicated to Colgate and Unilever, who had knowledge that Cussons so expected and intended; and (iii) such representations or Cussons' conduct in fulfilment of them operated as an inducement, whether among other inducements or not, to Colgate and Unilever to act in that particular way. The Commission argued, in effect, that by reason of their participation at the Accord meetings, and then through their dealings with Woolworths, in particular with Mr Fuchs, each of Cussons, Unilever and Colgate learnt that the other was going to enter into a "vertical" arrangement with Woolworths which contained the Withhold Supply Provisions. That knowledge operated as an inducement to each of Cussons, Unilever and Colgate to enter into the same or similar vertical arrangement. Those circumstances, in the Commission's submission, evidenced or constituted a horizontal arrangement between Cussons, Unilever and Colgate. 515 That submission is rejected for a number of reasons. 516 First, there is no evidence that when Mr Fatouros and Mr Davies, on behalf of Cussons, made statements at the Accord meetings concerning the proposals that Colgate had put to Accord, they intended that their statements would operate as an inducement to Unilever and Colgate to act in any particular way. It should be noted, in that context, that this fact or proposition was neither pleaded nor put to Mr Davies in cross-examination. 517 Second, there is no evidence that Unilever and Colgate knew that Mr Fatouros and Mr Davies, on behalf of Cussons, expected and intended that any statements made by them would operate as an inducement to Unilever and Colgate to act in any particular way. None of the Unilever witnesses gave evidence to that effect. 518 Third, there is no evidence that anything said by Mr Fatouros or Mr Davies, in the context of the Accord proposal, in fact operated as an inducement to Unilever or Colgate. To the extent that anything said by Mr Fatouros or Mr Davies indicated that Cussons was proposing to transition to ultra concentrates in 2009, that would hardly have come as a revelation to Colgate or Unilever. In any event, there is no evidence that such information induced Colgate or Unilever to change their plans in relation to transition. None of the Unilever witnesses gave evidence to that effect. 519 Fourth, there is no evidence that any representations made by Cussons to Woolworths in relation to Cussons' transition to ultra concentrates were made with the intention that Woolworths would communicate those representations to Colgate and Unilever, and that the representations so communicated would operate as an inducement to Unilever and Colgate to act in any particular way. Where, for example, someone from Cussons told Mr Fuchs or someone else from Woolworths that Cussons planned to transition at a particular time or in a particular way, there is no evidence to suggest that the information communicated to Mr Fuchs was communicated with the knowledge or intention that Mr Fuchs would communicate that information to Colgate and Unilever, and that the information so communicated would operate as an inducement to Colgate and Unilever to act in the same way. 520 The Commission submitted that, in circumstances where Cussons officers were receiving regular information from Woolworths in relation to Unilever and Colgate's plans for the transition, they must have considered that the information that they provided to Woolworths would be communicated to Unilever and Colgate. Putting to one side the fact that this proposition was not pleaded, the more important point is that it was never squarely put to any of the Cussons witnesses. While it may perhaps be accepted that some of the Cussons officers may have suspected that information they provided to Mr Fuchs might find its way to Unilever and Colgate, the evidence as a whole does not support the inference that they knew this was the case, let alone that it was their intention that that would occur, or that they believed that it would somehow operate as an inducement to Colgate and Unilever. 521 Fifth, there is no evidence that either Unilever or Colgate knew that anything that Cussons had told Woolworths was expected or intended by Cussons to operate as an inducement to Colgate and Unilever to act in a particular way. None of the Unilever witnesses gave evidence to that effect. 522 Sixth, while there is evidence that, in the course of their dealings with Woolworths, each of the Suppliers came to find out about aspects of the plans or intentions of the others in relation to the transition to ultra concentrates, the evidence did not rise so high as to establish that the information induced any of the Suppliers to act in a way that differed from the way they would have acted in any event. The information so obtained would no doubt have been factored into the respective Supplier's decision making to a certain extent. The evidence tended to suggest, however, that the Suppliers all remained somewhat sceptical about some of the information they were receiving from Mr Fuchs and Woolworths, particularly in respect of Cussons, and remained fairly uncertain about exactly what the other Suppliers' plans were. 523 Seventh, to the extent that it could be said that Cussons entered into any "vertical" arrangement with Woolworths, as will be discussed in more detail later, the evidence does not support a finding that the vertical arrangement contained the Withhold Supply Provisions. The evidence established that, at least by about November 2008, Cussons had told Woolworths that it would endeavour to meet Woolworths' expectations and preferences in relation to the transition to ultra concentrates, both in relation to the timing and scope of the transition. To the extent that that comprised a vertical arrangement, it did not contain provisions that Cussons would prevent, restrict or limit supply to Woolworths in terms of the Withhold Supply Provisions. Much the same can be said concerning the existence of any such vertical arrangements between Woolworths and Unilever and Colgate. 524 Eighth, to the extent that the evidence established that Cussons became aware that Unilever and Colgate intended to enter into any vertical arrangement with Woolworths, the evidence did not rise so high as to establish that any such knowledge operated as an inducement to Cussons to enter into a vertical arrangement with Woolworths that was the same or substantially the same. No such proposition was put to any of the Cussons witnesses in cross-examination. Much the same can be said of the knowledge that Unilever and Colgate acquired from Woolworths in relation to any such vertical arrangement that Cussons intended to enter into with Woolworths. 525 The facts and circumstances of the respective dealings of Cussons, Unilever, and Colgate with Accord and Woolworths in relation to the transition to ultra concentrates were far removed from the facts and circumstances of British Basic Slag. While it cannot be doubted that, in some circumstances at least, a series of separate vertical arrangements that competitors enter into with a single company or association may evidence or constitute a horizontal arrangement between the competitors, the evidence does not support a finding that this was the case in relation to the Suppliers' separate dealings and arrangements with Accord or Woolworths. 526 Much the same can be said concerning the Commission's reliance on the Super League Case. The facts of that case concerned actions taken by Australian Rugby Football League Limited (ARL), the company that had been primarily responsible for conducting a rugby league competition in Australia for many years, in response to the threat of a rival "Super League" competition. In about November 1994, ARL drafted and asked participating rugby league clubs to sign "Commitment Agreements", the purpose of which was plainly to prevent the clubs from competing in the rival competition. A meeting between ARL and the clubs occurred at around that time. In February 1995, a further meeting was called to consider the Super League issue. The clubs resolved to execute "Loyalty Agreements", and those agreements were executed by each of the clubs within a short period. The major purpose of the Loyalty Agreements was to prevent the clubs participating in any rival rugby league competition. 527 The primary judge found that there was no evidence of any horizontal arrangement or understanding between the clubs. Such arrangements as existed were vertical arrangements between the clubs and the ARL. The primary judge distinguished British Basic Slag for various reasons, though primarily because of the peculiar relationship that had existed between ARL and the clubs. The primary judge reasoned that the relationship between the clubs and ARL made it likely that the clubs would have been content to reach their understandings directly with the ARL, rather than between themselves. 528 The Full Court overturned the findings of the primary judge in that regard and found that there was a horizontal arrangement between the clubs to adopt the provisions of the Loyalty Agreements. It found (at 575B) that the November 1994 meeting "provided both the opportunity and the occasion for 'horizontal' communication among the clubs". More significantly, at the February 1995 meeting, a motion was passed requiring all clubs to sign Loyalty Agreements on pain of expulsion. That led the Full Court to reject the submission that what had occurred was mere "conscious parallelism" (at 575F) and to conclude (at 575G) that "there was a common understanding of the clubs, evidenced by communications among them at the meeting, to take concerted action to adopt the provisions of the Loyalty Agreements". 529 It suffices to say, in relation to the Commission's reliance on the Super League Case, that the facts and circumstances of that case were again far removed from the evidence, facts and circumstances of this case. The Super League Case again shows that where a number of competitors enter into vertical arrangements with a common supplier, retailer or industry association of some type, the circumstances in which the vertical arrangements were entered into may support an inference that the competitors also entered into a horizontal arrangement with each other in terms of the vertical arrangements. It does not follow, however, that that is always the case. The particular facts and circumstances of each case must be considered to determine if such an inference is available. 530 In this matter, even accepting, for present purposes, that each of Cussons, Unilever and Colgate entered into vertical arrangements of some sort with Woolworths, the question is whether the evidence concerning the dealings between Cussons, Unilever, Colgate and Woolworths in relation to those vertical arrangements supports the inference that Cussons also entered into a horizontal arrangement with either or both of Unilever and Colgate in similar terms to the vertical arrangements, or a horizontal arrangement that it would enter into the same vertical arrangements as the other Suppliers had entered into with Woolworths. For the reasons that have effectively already been given, when the whole of the evidence is considered, the answer to that question is "no": the evidence does not support the drawing of such an inference. 531 It should be noted, in this context, that in response to the Commission's arguments based on British Basic Slag and the Super League Case, Cussons relied on the decision of Ryan J in Stationers Supply Pty Ltd v Victorian Authorised Newsagents Ltd (1993) 44 FCR 35. In that case, a number of newsagents entered into identical advertising membership agreements with Newspower (Victoria) Pty Ltd. Ryan J found that there was no relevant arrangement or understanding between the newsagents for the purposes of s 45(2)(a)(i) of the Act. His Honour said (at 61): Individual membership agreements are not themselves the subject of attack under s 45(2)(a)(i). Rather, it is contended that there is an understanding between Newspower Victoria and those newsagents who have applied to become advertising members of "Newspower" that identical membership agreements would be made with other newsagents. The attack is therefore upon a twofold understanding, first between Newspower Victoria and newsagents and, secondly, between individual newsagents themselves. The first question is whether there is any understanding between newsagents to which Newspower Victoria is also a party. It is obvious that the "Newspower" arrangements required the acceptance of individual newsagents which, it may be inferred, would not be forthcoming if it were regarded as unlikely that other newsagents would join. Clearly, there must have been an expectation that other newsagents would participate in the "Newspower" arrangements. However, an expectation of that kind does not carry with it an understanding, arrived at between newsagents, to enter into membership agreements. The applicants must go further and establish an understanding between newsagents because Newspower Victoria and newsagents are not, as between themselves, competitors in any market. I can discern, however, no evidence which establishes an understanding between newsagents. In my view, it is necessary to establish something more than a hope or expectation that a certain outcome will occur before the court can find that an understanding exists. 532 Cussons submitted that the evidence in this case suggested, at its highest, that it had no more than a hope or expectation that each of the other Suppliers would transition to ultra concentrates in accordance with Woolworths' expectations or preferences. There is considerable force in that submission. 533 In relation to the timing of the transition, in broad terms the evidence suggested that, ultimately for its own commercial reasons, Woolworths arrived at the position, after discussions with each of the Suppliers, that its preferred date for each of the Suppliers, including Cussons, to commence supplying ultra concentrates to it was March 2009. That timing coincided, more or less, with Woolworths' major review of the laundry category. One can readily understand why Woolworths would have preferred the transition to ultra concentrates to have aligned with its major review. Woolworths also let it be known that its preference was for all the Suppliers to transition at that time. Again, one can readily understand why Woolworths arrived at the position, from its own commercial and logistical perspective, that a simultaneous transition by all Suppliers would be preferable. The transition to ultra concentrates required Woolworths to fundamentally rearrange its laundry section and involved other significant logistical challenges. Those challenges for Woolworths would no doubt have significantly increased had there been an incomplete or staggered transition. The evidence also showed that Woolworths wanted to reduce shelf space without rationalising brands, and wanted to avoid possible consumer confusion and other difficulties that might arise if it continued to sell both ultra and standard concentrates. 534 Cussons agreed or undertook to meet Woolworths' preferences as to timing. So too did Unilever and Colgate. The fact that each of the Suppliers ultimately accepted or agreed to meet Woolworths preferred timing for the transition does not necessarily mean that Cussons must therefore have entered into an arrangement or understanding with the other Suppliers in relation to the timing of the transition. That is so even though the evidence tended to show that Cussons considered it likely, or expected, that the other Suppliers were also likely to endeavour to meet Woolworths' preferences as to timing. Perhaps more significantly, that is so even though the evidence also tended to show that Cussons considered that a simultaneous transition may have been preferable because it avoided the commercial risks associated with a staggered transition, particularly the risk of lost sales to a supplier who continued to supply standard concentrates. The evidence suggested, at its highest, that Cussons may have had a hope or expectation that Unilever and Colgate would also meet Woolworths' timing preferences or expectations, and that it was therefore likely that there would be a simultaneous transition. 535 The same can be said concerning the scope of the transition. Woolworths, again for its own commercial reasons, appears to have arrived at the position where it did not wish to continue to sell standard concentrates once ultra concentrates had been introduced. It wanted a full category transition. It made it abundantly clear to the Suppliers that it would not continue to purchase standard concentrates from them. Cussons no doubt took that advice into account in formulating its transition plans. After much deliberation, it ultimately decided to transition all its brands to ultra concentrates. No doubt Colgate and Unilever also factored Woolworths' advice into their decisions concerning the scope of their transitions. It does not follow that Cussons entered into an arrangement or understanding with Colgate and Unilever that each of them would transition all their brands to ultra concentrates. The evidence established, at its very highest, that Cussons had a hope or expectation that Colgate and Unilever would make the same or similar decisions it made in relation to the scope of the transition. 536 It may generally be accepted that the evidence tended to show that the actions of Woolworths were important, if not critical, in facilitating or causing what appeared to be a largely simultaneous full category transition to ultra concentrates by the major suppliers and the major supermarkets in March 2009. Equally, however, the evidence tended to show that Woolworths acted as it did mainly because it was in its own commercial interests for that to occur. In any event, it does not follow, as the Commission appeared to contend, that Woolworths facilitated the simultaneous full category transition by acting as the "hub" for dealings between Cussons and the other Suppliers, and thereby coordinated an arrangement or understanding between them. Such an inference or finding is not supported by the evidence, considered as a whole. Rather, as has already been explained, the evidence at its highest revealed no more than that Woolworths entered into or arrived at separate vertical understandings or arrangements with each of the Suppliers in relation to the transition. 537 The evidence does not establish that the actions of Woolworths, or the dealings between Woolworths and the Suppliers, and between the Suppliers themselves, gave rise to a horizontal arrangement or understanding between Cussons and the Suppliers. While it may be accepted that the fact that Woolworths had similar arrangements or understandings with each of the Suppliers was no mere coincidence, the evidence established no more than that by late 2008 Cussons hoped or expected that the other two Suppliers would enter into, or had entered into, similar understandings with Woolworths. Cussons' witnesses 538 Cussons called evidence from a number of its officers or employees who were involved in various ways with Project Mastermind and Cussons' transition to ultra concentrates. Parts of their evidence have already been considered in the context of the detailed chronology of facts and evidence. It is unnecessary to rehearse the evidence of the Cussons witnesses in any great detail. It is, however, useful to make a few brief points about their evidence generally. Mr Davey 539 During 2008 and 2009 Mr Davey was a director of Cussons with responsibility for business development. He reported to Mr Fatouros. He had knowledge of and participated in meetings and decisions concerning Project Mastermind. He gave evidence concerning the NPD process for approving major projects. He was asked by Mr Fatouros to give his views in relation to the initial Accord proposal and sought legal advice in relation to it. Mr Davey's evidence in relation to those matters has already been addressed, as has his evidence concerning the 25 August and 10 October 2008 Accord meetings. 540 Mr Davey was cross-examined at some considerable length. That cross-examination largely traversed Cussons' internal documentation concerning Project Mastermind, including, most significantly, the Project Mastermind NPD1 document that appears to have been provided to the Cussons' board in August 2008. His evidence concerning that document has already been addressed in some detail. Mr Davey was also cross-examined about various Cussons documentary communications, primarily emails, including some of the communications which the Commission contended evidenced, in one way or another, the alleged arrangements or understandings. 541 The following points may be made about Mr Davey and his evidence. 542 First, as has already been noted, he was the only Cussons witness whose evidence was criticised by the Commission. The Commission submitted that the Court should exercise caution before accepting Mr Davey's evidence and should only do so in circumstances where it was corroborated by other evidence. The basis and merits of that submission have already been addressed. For the reasons already given, it is rejected. Mr Davey generally presented as an honest and credible witness who was endeavouring to give an accurate account of his knowledge and recollection of events concerning Project Mastermind. 543 Second, Mr Davey was the only Cussons witness who the Commission expressly submitted may have been involved in, or had knowledge of the alleged arrangement or understanding. That submission was somewhat half-hearted and belated. The Commission did not go so far as to submit that Mr Davey was involved in, or did have knowledge of, the alleged arrangement or understanding. The submission, rather, was that by reason of his position he may have been, or perhaps was likely to have been. It was not directly put to Mr Davey that he was involved in, or had knowledge of, any specific or particular communication or dealing with anyone from Unilever or Colgate, either directly or through Accord or Woolworths, that was said to constitute, or give rise to, the alleged arrangement or understanding. He was only asked in very general terms whether he made, or was aware of, an arrangement or understanding with Unilever and Colgate. 544 Mr Davey was, for example, asked the following questions, and gave the following answers, in the context of the NPD1 document: Q: Did you make any collaborative agreement with Unilever and Colgate? A: No. I did not. Q: Do you know whether anyone else at Cussons did? A: To my knowledge, no-one at PZ Cussons did. Q: You don't know, do you, whether they did or not? A: To my knowledge – to my knowledge, no, but I know what I know. Q: Yes. But you don't know whether anyone else at Cussons did or did not? A: No. I don't know 545 The Commission also relied on the following questions asked of Mr Davey, and the answers he gave thereto. 546 In the context of the legal advice sought and obtained by Mr Davey in relation to the Accord proposal, Mr Davey was asked and answered the following questions: Q: I suggest to you that the essence of Project Mastermind was that there would be a simultaneous transition to super concentrates. Do you accept that? A: No. Q: There would be an industry agreement to that effect? A: No. 547 In relation to the "activity map" diagram which was first included in a slide presentation given at Cussons' 16 June workshop, and which included the words "industry agreement", Mr Davey asked and answered the following questions: Q: You see in the middle of the diagram there's industry agreement? A: Yes. Q: When you first saw this diagram what did you think industry agreement was reference to? A: That this was reference to the Accord proposal. Q: Is that your best answer, Mr Davey? A: No. It's my conviction. 548 Whatever the Commission's submission may have been concerning Mr Davey, it cannot be inferred or concluded that he was involved, on behalf of Cussons, in any collusive arrangement or understanding with Unilever and Colgate. The evidence does not support any such finding. Nor can it be inferred that he knew that anybody else at Cussons was involved in any such arrangement or understanding. There is no sound basis not to accept Mr Davey's evidence that he did not make any collaborative agreement with Unilever and Colgate, and that to his knowledge nobody else at Cussons did either. 549 That is an important consideration in all the circumstances. Given Mr Davey's position and involvement in aspects of Project Mastermind, including the Accord meetings, if any collusive arrangement or understanding with Unilever and Colgate was made, arrived at or existed, it is difficult to imagine that Mr Davey would not have been aware of it. Mr Cunningham 550 Mr Cunningham was Research and Development Manager at Cussons. In that position, he was involved in Project Mastermind, particularly on the technical side. He was part of the team that conducted the Project Mastermind feasibility study and became a member of the Project Team. The general thrust of Mr Cunningham's evidence was that decisions concerning matters such as timing, level of concentration and packaging of Cussons' ultra concentrates were driven primarily by technical issues and considerations, not commercial ones. 551 Mr Cunningham helped prepare parts of the NPD1 document, but did not make, and did not know who made, the statement concerning the "collaborative advice and agreement". His evidence was that he was not aware of any such agreement. Nothing that was put to Mr Cunningham in cross-examination, and none of the evidence that he gave, suggested in any way that he was involved in, or had any knowledge of the existence of, any arrangement or understanding with Unilever and Colgate along the lines of the alleged Withhold Supply Arrangement. The Commission did not directly submit that Mr Cunningham was involved in, or had any knowledge of the existence of, any arrangement or understanding along the lines of the alleged Withhold Supply Arrangement 552 Mr Cunningham was asked some general questions about his understanding about aspects of Project Mastermind, including the timing of the move to ultra concentrates. Those questions were generally asked in the context of statements made in various Cussons documents, though often those were documents that were not prepared by Mr Cunningham. The Commission relied, in particular, on the following evidence given by Mr Cunningham. 553 In relation to a presentation slide prepared for Cussons' "laundry strategy day" held in February 2008, which included the words "industry change" and "competitors drive agenda", Mr Cunningham was asked and answered the following questions: Q: Was it your understanding as at February 2008 that another possible way to effect an industry wide transition to super-concentrate powders was an initiative led by competitors in which all those entities committed to transition? A: Not by competitors, by an industry body, potentially. Q: So when it says competitors drive agenda, what did you understand by that, Mr Cunningham? A: Well that could be they want to do it differently, potentially. 554 In relation to a presentation slide prepared for a Cussons workshop in June 2008, which included the words "launch first super-concentrate as an industry in July 2009", Mr Cunningham was asked and answered the following questions: Q: My question is whether you understood it was part of the project objectives of Project Mastermind that the industry would transition en masse on one date in 2009? A: Still think it's no. Yes. Q: So you never thought that part of the objective of Project Mastermind was that the industry together would launch super-concentrates on the same date? A: By then, maybe, yes. 555 In the same presentation, another slide contained an activity map that included the words "industry agreement". Mr Cunningham was asked and answered the following question about those words: Q: And as at late June 2008 you understood industry agreement to be a reference to an agreement reached amongst the major manufacturers to launch two times concentrated laundry powders at a single date in 2009? A: Potentially. 556 Mr Cunningham was not asked what he meant by "potentially", or what the basis of that understanding was. He was not asked what, if any, discussion occurred at the workshop on that topic. Mr Cunningham's evidence must also be considered in light of the fact that Mr Davey gave emphatic evidence that the words "industry initiative" in the activity map were a reference to whatever might be achieved through Accord. An earlier slide in the same presentation also refers to an "industry initiative" which, when read in context, is plainly a reference to Accord. 557 Mr Cunningham was asked about an email dated 12 August 2008 that attached a copy of the NPD1 document. That email was not sent to Mr Cunningham. The email included the words "NPD2 will be seeking permission to launch due to pressure on timeline". Mr Cunningham was asked and answered the following questions in that context: Q: Now, to your understanding, that pressure arose from Cussons' internal knowledge of its competitors' intentions to launch in February 2009? A: No. Q: And to your understanding that pressure also arose from Cussons' commitment as communicated to other industry participants to launch at the same time as them? A: No. 558 The parts of Mr Cunningham's evidence relied on by the Commission, when considered in the context of the whole of the evidence, do not establish that Mr Cunningham was aware of any arrangement or understanding with the other Suppliers that contained any provisions along the lines of the Withhold Supply Provisions. It may be accepted that Mr Cunningham's answers to questions in cross-examination were, at times, fairly vague and at times ambiguous or unclear. That was perhaps explicable by the fact that he was clearly more involved in the technical side of Project Mastermind, not the commercial and marketing side. Many of the questions to him in cross-examination concerned statements in documents that were neither authored by him, nor concerned with the technical aspects of the transition which were Mr Cunningham's main concern. Despite the vagueness of some of his evidence, Mr Cunningham nevertheless presented as an honest witness who was doing the best he could to truthfully answer the questions asked of him. 559 As has already been noted, the Commission did not directly submit that Mr Cunningham was involved in, or knew anything about, any arrangement of understanding between Cussons, Unilever and Colgate. If such a submission had been made, it would have been rejected in any event. The evidence was not capable of establishing either matter. Mr Wilson 560 Mr Wilson was a director of Cussons responsible for sales to all of Cussons' customers, including Coles, Woolworths and Metcash. He reported to Mr Fatouros. He was a member of Cussons' New Activities Review team, which was responsible for considering and approving new projects, including Project Mastermind. He was also a member of the Steering Team, which was responsible for supervising and providing guidance to the Project Mastermind Steering Team. He participated in various internal Cussons meetings concerning Project Mastermind during 2008, including war gaming sessions. He was also heavily involved in discussions and communications throughout 2008 with both Woolworths and Coles concerning ultra concentrates, including in relation to the timing and scope of the transition and Woolworths' launch date. 561 Nothing that was put to Mr Wilson in cross-examination, and none of the evidence that he gave, suggested in any way that he was involved in or had any knowledge of the existence of any arrangement or understanding along the lines of the alleged Withhold Supply Arrangement. As was the case with Mr Davey, that is of some significance. If any collusive arrangement or understanding with Unilever and Colgate was entered, arrived at or existed, it is difficult to imagine that Mr Wilson would not have been aware of it. 562 Significantly, it was never put to Mr Wilson that information given to Woolworths by Cussons in relation to Cussons' transition to ultra concentrates was given with the intention that Woolworths would in turn give that information to Colgate and Unilever, and that the information would operate as an inducement to Unilever and Colgate to act in a particular way. Nothing was put to Mr Wilson to the effect that information concerning the transition was being knowingly exchanged through Woolworths as a "hub". Given Mr Wilson's role in dealing with Woolworths, if there was any substance whatsoever to the Commission's "hub and spoke" case, it might reasonably be expected that Mr Wilson would have been questioned about such matters. Mr Freene 563 At the relevant time, Mr Freene was the National Grocery Operations Manager at Cussons. Mr Freene's evidence in chief primarily related to dealings and communications with Metcash in relation to the transition to ultra concentrates. Mr Freene's evidence was that Metcash's range reviews usually took place in November each year, and that Cussons typically offered Metcash the same products that Cussons had decided to offer to Woolworths and Coles. Mr Freene was involved in meetings with, and giving presentations to, employees of Metcash in relation to the transition to ultra concentrates. 564 Mr Freene had received the guidelines prepared by Mr Davey which provided that Cussons employees should not have any discussions with any representatives of Cussons' competitors. Mr Freene's evidence was that he was not aware of any such discussions having taken place. It should also be noted that Mr Freene does not appear to have had any meetings or discussions with Woolworths. 565 The Commission relied on the following evidence given by Mr Freene in the course of cross-examination. In the context of an internal Cussons email sent on 11 August 2008, which included the words "if the whole industry is communicating a change to super concentrates", Mr Freene was asked and answered the following question: Q: Was it your understanding by this point in time, which is August 2008, that in or about the beginning of 2009 there was going to be a full category change of all manufacturers' powdered products to super concentrate format? A: I can't recall if it was around this August time, but my understanding was – in September I had a clear understanding that the – that the trade would be moving to super concentrates. 566 It should be noted that Mr Freene's understanding was that "the trade" - the retailers - would be moving to ultra concentrates. Mr Freene's evidence was that he did not recall where he obtained that understanding from. In the same context, Mr Freene was asked and answered the following questions: Q: So in or about September 2008, Mr Freene, was it your understanding that all of the major laundry manufacturers were going to transition all of their powdered products to super concentrates in early 2009? A: Yes. Q: And was it your understanding that the transition was going to be a level of concentration of two times that of existing products? A: I wasn't aware of that, but I was aware that we were – would be launching a two by concentrate. Q: Were there any other matters that you were aware of in or about September 2008 as to the intentions of the other major manufacturers of laundry powders? A: No. 567 None of the evidence given by Mr Freene in cross-examination materially supported or assisted the Commission's case. The questions put to Mr Freene about his understanding about what was happening in 2008 were put at such a high level of generality that Mr Freene's evidence in response to them was of little if any assistance. The source of Mr Freene's understanding was also never properly explored. It may be that what he said was his understanding, may have been little more than his expectation. 568 The evidence, considered as a whole, did not suggest that Mr Freene was involved in, or knew anything about, any arrangement or understanding between Cussons, Unilever and Colgate concerning the transition to ultra concentrates, including in relation to the supply of ultra concentrates to Metcash. Other Cussons witnesses 569 The other Cussons witnesses were not involved in the relevant events of 2008 and 2009 and essentially produced documents or data. None of them were cross-examined. Jones v Dunkel inferences 570 In its submissions, the Commission pointed out that Cussons did not call evidence from a number of witnesses who were in one way or another involved in Project Mastermind and Cussons' transition to ultra concentrates. Those witnesses included, in particular, Mr Fatouros, Ms Gill and Ms Baldwin. It submitted that the Court should draw a Jones v Dunkel inference in respect of particular matters about which they might have given evidence. 571 Evidence adduced by Cussons showed that Mr Fatouros, Ms Gill and Ms Baldwin no longer worked for Cussons. 572 Mr Fatouros ceased working for Cussons on 31 December 2010, over three years before the Commission commenced the proceeding and well over five years before the trial. The evidence also suggested that Mr Fatouros had resided overseas for some time. At the time Mr Davey was examined by the Commission in May 2013, he believed that Mr Fatouros lived in Bangkok. Cussons' lawyers had asked Mr Davey for Mr Fatouros' contact details, however Mr Davey was unable to provide them because he did not know where he was. Mr Davey believed that Mr Fatouros had moved to the United States, but did not believe that he was still there. 573 Ms Baldwin ceased working for Cussons on 15 July 2011. Mr Davey did not know where she lived and had not been in contact with her since about 2009 when he left Australia. A print-out of Ms Baldwin's "Linked-In" profile, which was tendered by the Commission, suggested that Ms Baldwin lived or worked in Melbourne. 574 It should perhaps also be noted, in this context, that the Commission tendered printouts of Linked-In profiles or other webpages relating to a number of other former Cussons employees: Mr McMillan, Ms Noisette, Mr Biddlecombe, Mr D'Amico, Mr Bergmann, Mr Coghlan and Mr Miglioranza. The Commission did not, however, specifically submit that a Jones v Dunkel inference should be drawn in relation to Cussons' failure to call any of those former employees. 575 Ms Gill ceased working for Cussons on 12 March 2010. 576 In broad terms, the rule in Jones v Dunkel is that the unexplained failure by a party to call a witness that the party would reasonably be expected to call may, not must, lead to an inference that the evidence of the witness would not have assisted that party's case. A party might reasonably be expected to call a witness if the party is in a position to call the witness and may be taken to know the evidence that the witness would or might give. That is often referred to colloquially as the relevant witness being in the party's "camp". 577 There are a number of reasons why a Jones v Dunkel inference or inferences should not be drawn because Cussons did not call Mr Fatouros, Ms Baldwin and Ms Gill to give evidence. 578 First, there is no reason or basis to conclude that Cussons was in any better position to call Mr Fatouros, Ms Baldwin and Ms Gill than the Commission was. Nor is there any reason or basis to conclude that those witnesses were or are relevantly in Cussons' "camp", such as to make it reasonable for Cussons, and unrealistic for the Commission, to call them. The events the subject of the Commission's case occurred in 2008 and early 2009. The Commission did not commence the proceeding until December 2013, over four years after the relevant events. Each of the witnesses had left the employ of Cussons well before that time. By the time of the trial, over five years had passed since the witnesses left Cussons' employ. There appears to have been no ongoing contact or relationship between Cussons and the witnesses since they left Cussons. Mr Fatouros appears to have left Australia some time ago, but his present whereabouts are unknown. There is nothing to suggest that Cussons was aware of the evidence that any of those witnesses would have given, or would have been able to give. 579 The mere fact that a potential witness has left the employ of the party may not, in and of itself, mean that the witness is no longer in the party's camp, or provide a reasonable explanation for the party not calling the witness. Where, however, the initial relationship between the party and the witness has been severed, and there is no apparent ongoing relationship, there may be no reason to conclude that the witness is in the party's "camp": Australian Securities & Investments Commission v Australian Lending Centre Pty Ltd (No 3) (2012) 287 ALR 693 at [153]; Claremont Petroleum NL v Cummings (1992) 110 ALR 239 at 259. This is such a case. There is no reason to suppose that Mr Fatouros, Ms Baldwin or Ms Gill are more available to Cussons than they are to the Commission. Nor, given the effluxion of time, is there any reason to suppose that Cussons knows, or should be presumed to know, what the evidence of the witnesses would be: cf Brandi v Mingot (1976) 12 ALR 551 at 560. 580 Second, the so-called rule in Jones v Dunkel generally only applies where a party is required to "explain or contradict something": Jones v Dunkel at 322. It is not entirely clear exactly what, in terms of the Commission's case against Cussons, Cussons could reasonably be said to be required to explain or contradict by calling evidence from Mr Fatouros, Ms Baldwin and Ms Gill. Particularly significant in that respect is that the Commission's pleading is entirely opaque as to whether the Commission alleges that Mr Fatouros, Ms Baldwin or Ms Gill were responsible for causing Cussons to enter into, or arrive at, the alleged arrangements or understandings with Unilever and Colgate. 581 The Commission did rely on evidence, primarily documentary evidence, of communications to which Mr Fatouros, Ms Baldwin and Ms Gill were parties. Some of those communications were apparently contended by the Commission to be part of the pattern of communications that were said to constitute evidence of the alleged arrangements or understandings. The Commission submitted that some of those documents call for explanation, and that the witnesses could have given evidence that would have "elucidated the relevant documents". The Commission did not, however, give any specific examples of the documents that were said to require explanation or elucidation. 582 The evidence concerning Mr Fatouros' involvement in the relevant events is very limited. Mr Fatouros attended the first Accord meeting which considered the proposal advanced by Colgate. The evidence of what was said and done at that meeting is tolerably clear. The Commission called evidence from Ms Moss, who attended that meeting, and tendered her contemporaneous record of the outcome of the meeting. It is difficult to see what Cussons was required to explain or contradict in respect of the evidence concerning that meeting. Cussons did not suggest that any aspect of Ms Moss's evidence concerning the meeting should not be accepted, or required clarification or elucidation in any material respect. It should also be noted, in that context, that the Commission did not adduce evidence from a number of other persons who attended that meeting, including, for example, Ms Capanna of Accord. 583 Mr Fatouros also sent Ms Capanna an email on 23 July 2008 concerning the Accord proposal. That email largely speaks for itself. There is nothing that relevantly requires explanation or contradiction. The same can be said for Mr Fatouros' telephone conversation with Mr Pederson of Colgate. The terms of that telephone conversation were recorded in a file note made by Mr Pederson. The Commission did not call Mr Pederson. In any event, the subject matter and terms of the conversation are clear from the note. The evidence concerning Mr Fatouros could not reasonably be said to require explanation or contradiction by Cussons. For the reasons already given, considered in the context of the evidence as a whole, Mr Fatouros' email of 23 July 2008 and his telephone conversation with Mr Pederson are relatively benign. 584 The Commission did not, in the context of its Jones v Dunkel submissions, give any examples of documents authored or received by Ms Baldwin or Ms Gill that relevantly required explanation, contradiction or elucidation. For the most part, the documents authored or received by Ms Baldwin and Ms Gill could not reasonably be said to require explanation or contradiction. The Commission seized on some parts of those documents and contended that they supported its circumstantial case. It does not follow, in all the circumstances, that Cussons might reasonably be expected to have called Ms Baldwin and Ms Gill to explain or contradict the documents in some way. 585 In any event, even if the rule in Jones v Dunkel applied in the circumstances, it is difficult to see how that would have materially assisted the Commission's case. The most that could be said is that it could be inferred that the evidence that might have been given by Mr Fatouros, Ms Baldwin and Ms Gill would not have assisted Cussons' case, or that the evidence or inferences that might have been explained or contradicted by those witnesses can be more readily accepted. Importantly, however, a Jones v Dunkel inference cannot be employed to make up any deficiency of evidence (Jones v Dunkel at 312), or to convert conjecture or suspicion into inference. It does not permit an inference that the evidence of Mr Fatouros, Ms Baldwin and Ms Gill would have been damaging for Cussons' case: Australian Securities and Investments Commission v Hellicar & Ors (2012) 247 CLR 345 at [232]. 586 Disputed questions of fact must be decided by the Court according to the evidence that the parties adduce, not according to some speculation about what other evidence might possibly have been led: Hellicar at [165]. It is unclear from the Commission's submissions exactly what inference or inferences it says should be drawn by the Court from the fact that Cussons did not call Mr Fatouros, Ms Baldwin and Ms Gill. That is because the submissions addressed the evidence at a very general or global level. The Commission appeared to be simply inviting the Court to speculate about what evidence the witnesses might have given about certain unspecified matters, or worse still inviting the Court to infer that the evidence would have been damaging to Cussons case. 587 The Commission's submissions concerning the rule in Jones v Dunkel are rejected. It cannot, in all the circumstances, be inferred from the failure of Cussons to call evidence from Mr Fatouros, Ms Baldwin and Ms Gill, that the evidence of those witnesses would not have assisted Cussons' case, or that evidence or inferences that might have been explained by those witnesses can more readily be accepted. In any event, even if such inferences were to be drawn, in all the circumstances that would not have assisted the Commission's case in any material way. Such inferences certainly would not and could not make up for the deficiencies in the Commission's case. Parallel conduct, economic irrationality and motive 588 The Commission submitted that the inference that Cussons entered into, or arrived at, the alleged arrangement or understanding with Unilever and Colgate was supported by what it contended amounted to parallel conduct by Cussons, Unilever and Colgate. That parallel conduct was said to be that each of the Suppliers commenced supplying ultra concentrates and substantially ceased supply of standard concentrates at the same time. The Suppliers also manufactured and supplied ultra concentrates at a uniform concentration. This parallel conduct and uniformity was said to be "remarkable" in circumstances where the individual incentive for any one of the Suppliers was to transition in a non-uniform manner. 589 There can be no doubt that in some circumstances evidence of parallel conduct may provide circumstantial support for the existence of a collusive arrangement or understanding. The significance or weight to be attached to parallel conduct, however, will depend on all the particular facts and circumstances in which the parallel conduct occurred, including the features of the relevant market and the likelihood of such conduct occurring in the absence of an arrangement or understanding: Air New Zealand at [466]. The problem for the Commission is that its submissions concerning the circumstantial significance of the parallel conduct that it asserts occurred in this case are not supported by its own economic evidence, and are significantly undermined by the unchallenged economic evidence adduced by Cussons. 590 Professor Williams' opinion evidence rose no higher than that the parallel conduct would not have occurred if the parties had behaved unilaterally: that is, that there was no direct or indirect communication between them. He did not go so far as to suggest that it could only be explained on the basis of an arrangement or understanding. And significantly, there could be no doubt that there was significant communication between the Suppliers, in the broad sense explained by both Professor Williams and Professor Hay, in relation to the transition. There could be no doubt that each of the Suppliers was communicating with Coles and Woolworths in relation to their transition plans. In the course of so communicating, each of the Suppliers obtained information concerning the plans and proposals of the other Suppliers in relation to the transition, including the timing and scope of the transition. The Suppliers factored that information or "market intelligence" into their decision making processes. 591 As discussed earlier, the effect of Professor Hay's evidence was that the parallel conduct relied on by the Commission was entirely explicable on economic grounds and would likely have occurred without any agreement, arrangement or understanding. The economic factors referred to by Professor Hay included the absence of any economic incentive for an individual supplier to delay the introduction of ultra concentrates and forgo the known economic benefits of reduced costs and possibly higher margins; the retailers' strong economic reasons for requiring a prompt and simultaneous transition by all suppliers; and the retailers' structured range review processes. Professor Hay's opinions were not tested or challenged. They significantly undermined the Commission's submission that the asserted parallel conduct supported the inference of the existence of an arrangement or understanding between Cussons, Unilever and Colgate. 592 In short, any parallel conduct was explicable on grounds that had nothing to do with any arrangement or understanding. 593 The Commission also contended that there were two other circumstantial considerations that supported the existence of the alleged arrangement or understanding. The first was said to be that the joint transition by the Suppliers was economically irrational behaviour in the context of the laundry detergent market. The second was said to be that Cussons, Unilever and Colgate had a clear purpose or motive to form an arrangement or understanding in relation to the transition. 594 The alleged economic irrationality was said to be that the Suppliers were cognisant that financial benefits could be obtained by a Supplier who did not transition when the other Suppliers did so. The main benefit was that the Supplier who did not transition could possibly achieve larger sales of their standard concentrate product because consumers were likely to buy a larger box of detergent, albeit a standard concentrate, than a small box, albeit an ultra concentrate, if both boxes were at the same price point. Thus, it was said to be rational for a Supplier to delay its transition, and irrational to transition at the same time as the other Suppliers. 595 The difficulty with the Commission's economic irrationality submission, however, is that it ignores much of the other evidence that suggested that the Suppliers had strong economic and commercial incentives to transition as early as possible. Those economic incentives, which were again the subject of Professor Hay's unchallenged evidence, included the significant costs savings and the prospect of improved margins from ultra concentrates, the concern at being left behind if other Suppliers transitioned first, the potential of increased sales if consumers were persuaded by the benefits of the new products, and the fact that the retailers also saw considerable economic and commercial benefits in the shift to ultra concentrates and were thus encouraging that to occur. 596 The evidence established that throughout 2008, each of the Suppliers anxiously weighed up the advantages and disadvantages of different scenarios and approaches to the transition to ultra concentrates, including delaying the transition, or retaining some standard concentrate brands. They conducted "war game" exercises in which they considered, amongst other things, the likely plans or responses of their competitors and what strategies they should adopt in different scenarios. They also considered the strong preferences of Woolworths and Coles as to the timing and scope of the transition. When the evidence as a whole is considered, it cannot be concluded that Cussons, or any of the other Suppliers, acted in an economically irrational way by not delaying their transition to ultra concentrates. 597 The purpose or motive that the Commission asserted that the Suppliers had to enter or arrive at an arrangement or understanding was to avoid the risks that attended a unilateral transition to ultra concentrates. As was discussed in detail earlier, there was evidence that each of the Suppliers was aware that if they transitioned earlier than their competitors, or one of them, there was a risk that they would lose sales because confused consumers would continue to purchase standard concentrates because they perceived that the larger box represented better value. The Suppliers were aware that the risk would be alleviated or eliminated if all the Suppliers transitioned at much the same time. It does not follow, however, that the Suppliers believed or thought that the only way to alleviate that risk was to enter into an arrangement or understanding. Indeed, the evidence indicated to the contrary. 598 As has already been noted, the evidence revealed that Cussons and the other Suppliers factored the potential risks that attended a unilateral transition into their decision making concerning the transition. They attempted to anticipate what their competitors were doing, or likely to do, in relation to the transition to ultra concentrates. They took into account market intelligence and other information that they obtained, including from Woolworths, in relation to the plans of their competitors. That way, they were able to minimise the risks of a unilateral transition, without having to resort to entering into an arrangement or understanding. The evidence in this regard was entirely consistent with the analysis and opinions of Professor Hay. 599 In all the circumstances, the Commission's submissions concerning parallel conduct, economic irrationality and motive have little or no merit. Those matters provide little, if any, support for the Commission's circumstantial case that that Cussons, Unilever and Colgate entered into the alleged Withhold Supply Arrangement. The Withhold Supply Provisions 600 The discussion of the evidence and the Commission's case thus far has largely addressed the question whether, in general terms, the evidence shows that Cussons was a party to any sort of arrangement or understanding with Colgate and Unilever concerning the transition to ultra concentrates. That discussion largely reflects the way the Commission advanced its case in its submissions. It is, however, necessary for the Commission to prove, on the balance of probabilities, that any arrangement that was made, or any understanding that was arrived at, by Cussons included the Withhold Supply Provisions. 601 There were three alleged Withhold Supply Provisions. It is necessary to separately consider the evidence in relation to each. The first of the alleged Withhold Supply Provisions – prevent etc. supply of ultra concentrates until March 2009 602 The first of the alleged Withhold Supply Provisions was that Colgate, Unilever and Cussons would prevent, restrict, or limit the supply to Woolworths, Coles and Metcash of ultra concentrates until a particular date, originally scheduled to be January 2009, but changed, before that date, to March 2009. 603 The Commission did not point to any direct evidence that established that Cussons agreed, arranged, undertook, or gave any form of commitment to Unilever or Colgate that it would prevent, restrict or limit the supply of ultra concentrates to Woolworths, Coles and Metcash until either January 2009 or March 2009. There was no direct evidence of any communication between Cussons and the other two Suppliers, either directly or through Woolworths as a "hub", in which such an agreement, undertaking or commitment was conveyed. There was no evidence of a communication which directly referred to Cussons, or indeed, any of the Suppliers, preventing, limiting or restricting supply of ultra concentrates until January or March 2009. Indeed, the evidence tended to indicate that Cussons and the other Suppliers would have been very hard pressed to supply their new ultra concentrates before March 2009 in any event because of manufacturing and other logistical restraints. That was why, on the Commission's own case, Colgate and Unilever told Woolworths that they wanted the launch date moved from January or February 2009 to March 2009. 604 Putting the absence of any direct communications to one side, there is also insufficient evidence to support an inference that Cussons agreed, arranged, undertook, or gave any form of commitment to Unilever or Cussons that it would not supply ultra concentrates to Woolworths, Coles or Metcash, before either January or March 2009. While the evidence does indicate that Cussons ultimately accepted Woolworths preferred transition date of March 2009, and perhaps knew or had an expectation that Unilever and Cussons had done the same, there was no evidence to suggest that Cussons felt obliged or committed in any respect to Unilever or Colgate to refuse to supply ultra concentrates to any of the retailers if they had requested. The evidence did not establish that there was any meeting of the minds between Cussons and either Unilever or Colgate in that regard. 605 Indeed, the evidence suggested to the contrary. Cussons adduced unchallenged evidence that it supplied a number of its new ultra concentrated laundry detergent products to Woolworths, Coles and Metcash in the weeks ending 15 February 2009 and 22 February 2009. Those supplies were detailed earlier in the chronology of facts and evidence. There was no evidence that Cussons felt in any way constrained not to supply those products at those times because of any arrangement or understanding with Unilever or Colgate. There is nothing to suggest that those supplies could be explained on the basis that Cussons was cheating on any such arrangement. There was, for example, no evidence of any complaint by Unilever or Colgate concerning Cussons' supplies during February 2009. Indeed, there was also evidence that both Unilever and Colgate were also requested to, and did, supply some of their new ultra concentrated products to Woolworths and Coles before March 2009. 606 The Commission contended that the supplies of ultra concentrates that occurred before the supposedly agreed transition date of March 2009 were so small or disparate to be immaterial. That submission is rejected. The supplies were of a size and scale that was inconsistent with the existence of any arrangement or understanding including provisions of the sort alleged by the Commission. The second of the alleged Withhold Supply Provisions – prevent etc. supply of non-uniform ultra concentrates from March 2009 607 The second of the alleged Withhold Supply Provisions was that Colgate, Unilever and Cussons would prevent, restrict, or limit the supply to Woolworths, Coles and Metcash of ultra concentrates other than those that met certain prescribed parameters (including in relation to the degree of concentration, the physical dimensions and configuration of packaging and advertising, communication and product claims) from a particular date, originally January 2009 but changed, before that date, to March 2009. The Commission alleged that the prescribed parameter in relation to concentration level was 2x (twice the level of concentration of a standard concentrate). It is unclear exactly what the prescribed parameters were in relation to physical dimensions and configuration of packaging, or in relation to advertising, communication and product claims. All that was alleged was that there would be "material similarity" of the parties' ultra concentrates in respect of those parameters. 608 The Commission's lengthy written submissions barely touched on the evidence in support of this alleged provision. Nor was it really addressed in oral evidence. The Commission certainly did not point to any direct evidence that established that Cussons agreed, undertook, or gave any sort of commitment to Unilever or Colgate that it would prevent, restrict or limit the supply of ultra concentrates that didn't meet any of the alleged prescribed parameters from either January 2009 or March 2009. Equally, there was no evidence of any communication between Cussons and the other two Suppliers, either directly or through Accord or Woolworths as a "hub", in which such an agreement, undertaking or commitment was directly conveyed. 609 The Commission's circumstantial case in respect of the degree of concentration appeared to be based on the fact that the degree of concentration was referred to, at least to some extent, in Colgate's proposal to Accord, the fact that both Mr Davies and Mr Cunningham agreed in cross-examination that they assumed or understood, from information given by Woolworths, that both Colgate and Unilever were moving to ultra concentrates with a 2x degree of concentration, and the fact that each of the Suppliers ultimately did move to ultra concentrates with that degree of concentration. 610 When the evidence is considered as a whole, however, it cannot be inferred that Cussons was a party to any arrangement that limited or restricted it to only supplying ultra concentrates with a 2x degree of concentration. 611 Mr Cunningham was a member of the team that performed the feasibility study for Cussons' Project Mastermind. His understanding was that the feasibility study only explored the feasibility of a 2x concentration level, as opposed to a 1.5x level, because a 1.5x concentration level would be more difficult to market to consumers than a 2x concentration level. It was also not technically feasible for Cussons to develop a 3x concentration level. The feasibility study was in early 2008, well before the Accord proposal and well before any communications with Woolworths that referred to what Cussons' competitors may have been doing. Thus, Cussons' decision to move to a 2x ultra concentrate appears to have been arrived at independently and to have had nothing to do with any arrangement or understanding with its competitors. In those circumstances, the fact that both Mr Davies and Mr Cunningham may have come to assume or understand from Woolworths' communications that Unilever and Colgate were likely to move to ultra concentrates with a 2x degree of concentration was largely immaterial. 612 It should also be noted that it would appear that both Colgate and Unilever were in a similar position to Cussons in relation to the degree of concentration: both were technically incapable of producing a 3x concentrate and neither appears to ever have considered a 1.5x concentrate. Internal Unilever documents reveal that Unilever decided to move to a 2x degree of concentration because that was the "desired consumer proposition". Ms Katz's evidence was that the decision did not have anything to do with what Unilever may have learned about what its competitors were doing. It was, in all the circumstances, hardly surprising that each of the Suppliers ultimately transitioned to ultra concentrates with a 2x degree of concentration. 613 While the Commission advanced virtually no submissions in relation to the alleged prescribed parameters relating to the dimensions and configuration of packaging, it would appear that its case in respect of an arrangement or understanding concerning those parameters relied almost entirely on three documents. The first two documents were emails that Mr Fuchs sent to each of the Suppliers, and others, on 13 August and 22 December 2008. The third was a document containing the notes of the "super concentrates workshop" Cussons conducted with Woolworths on 25 August 2008. 614 As noted in the detailed factual chronology, the 13 August 2008 email attached a blank spreadsheet and requested the Suppliers to enter "all the new dimensions as we will need to do a few POG mock ups". The 22 December 2008 email attached a spreadsheet that was said to contain the "pack dimensions of the 3 major vendors". The email itself simply said that "[t]his will allow you to look at some POG [planogram] suggestions". 615 Those emails, properly considered in the context of the evidence as a whole, are incapable of supporting an inference that there was an understanding between the Suppliers that they would prevent, restrict or limit the supply of ultra concentrates that did not meet those, or any other, parameters relating to pack dimensions. It is tolerably clear from the terms of the emails that Mr Fuchs sent them to the Suppliers for the purpose of seeking the assistance of the Suppliers in relation to the preparation of Woolworths' planogram. That is also evidently how the Suppliers interpreted the emails. That was the effect of the evidence of both Mr Wilson, of Cussons, and Mr Bellingham of Unilever. There is nothing to suggest that the Suppliers exchanged information concerning their proposed pack dimensions in response to Mr Fuchs' earlier email, let alone that that was done for the purpose of some arrangement or understanding that only ultra concentrates with specified pack dimensions would be supplied to Woolworths. The latter email was sent at a very late stage, no doubt after the Suppliers had already committed themselves to their respective pack dimensions. 616 As also discussed in the detailed factual chronology, the notes of the workshop held on 25 August 2008 include the statement "PZC [Cussons] proposal (pack sizes, on-pack communication, dimensions etc.) in line with what other manufacturers are proposing". Somewhat confusingly, however, the note later records, in the context of "shelf management impact", that Woolworths was "waiting on PZC to provide proposed pack sizes and dimensions so that they can begin to do planogram mock-ups". That would suggest that, while Cussons had not formally responded to Mr Fuch's request, in his 13 August email, to provide pack dimensions, there was likely to have been some discussion at the workshop in relation to Cussons' proposed pack sizes. It would appear, in that context, that Mr Fuchs told Cussons that its proposed pack directions were broadly in line with what Colgate and Cussons were proposing. There is, however, no evidence to suggest that Mr Fuch's provided that information for the purposes of encouraging Cussons to enter into an arrangement or understanding with the other Suppliers to only supply ultra concentrates with those pack dimensions, or that the information caused or resulted in the Suppliers entering into any such arrangement, or that the information had any impact whatsoever on Cussons' final decisions in relation to pack dimensions. 617 It should also be noted in relation to pack dimensions that the only evidence concerning the pack dimensions of the products supplied by the Suppliers after the transition tended to indicate that the pack dimensions of the 500 gram products of the three Suppliers were materially different. 618 The Commission's case in relation to prescribed parameters concerning advertising, communication and product claims on packaging also received virtually no attention in the Commission's submissions. It is accordingly unclear what evidence the Commission relied on in support of the allegation that Cussons, Unilever and Colgate entered into an arrangement, or arrived at an understanding, that included a provision that they would not supply ultra concentrates that did not meet prescribed parameters concerning those matters. 619 There was some evidence that there were discussions at the meeting of Accord on 25 August 2008 that related to a "star system of labelling" which was put forward by Unilever. There was, however, no agreement concerning that proposal. There were also some communications between Woolworths and the Suppliers in late November 2008 and January 2009 concerning matters that appeared to be loosely related to advertising, promotions or marketing. Those communications, individually or collectively, are incapable of supporting any inference of any arrangement or understanding between the Suppliers in terms of the second of the Withhold Supply provisions. The third of the alleged Withhold Supply Provisions – prevent etc. the supply of standard concentrates after March 2009 620 The third limb of the Withhold Supply Provisions was that Colgate, Unilever and Cussons would prevent, restrict, or limit the supply to Woolworths, Coles and Metcash of standard concentrates from a particular date, originally January 2009, but changed, before that date, to March 2009. The Commission's case in relation to this limb of the Withhold Supply Provisions was in effect that it was the Suppliers' collective decision to cease or refuse to supply standard concentrated laundry powder to Woolworths and the other major retailers once ultra concentrates were introduced. The Commission's case in that regard appeared to rely heavily on the fact that, as events transpired, there was a complete, or at least an almost complete, transition to ultra concentrates in March 2009. 621 There are at least three difficulties in respect of this aspect of the Commission's case. The first difficulty is that, as with the other two limbs of the Withhold Supply Provisions, there is no direct evidence that Cussons was party to any arrangement or understanding that involved the Suppliers collectively withholding supply of standard concentrates. There was no evidence of any communication, oral or written, between Cussons and the other two Suppliers, either directly or through the supposed "hub" of Woolworths, that suggested that Cussons had undertaken or committed to the other Suppliers that it would not supply any standard concentrates to the major retailers beyond a particular date. Certainly none of the Unilever witnesses gave evidence of any such communications. 622 The second difficulty is that the existence of an arrangement including this provision is contrary to the direct evidence of the position taken by Cussons at the 25 August 2008 Accord meeting. As has already been discussed in some detail, the evidence, including the contemporaneous documentary evidence and the evidence of Ms Moss, clearly indicated that Mr Davey, on behalf of Cussons, made it clear at that meeting that Cussons would not agree to any proposal which required Cussons to move all its brands to ultra concentrates at once or by a certain date. While Mr Davey was cross-examined at some length, the evidence concerning the position he took at the Accord meeting was not directly challenged. 623 It was also never directly put to Mr Davey, or any other Cussons witness, that the reason that Cussons ultimately ceased selling standard concentrates to Woolworths or Coles was that Cussons had entered into an arrangement with Colgate and Unilever to prevent, limit or restrict such supplies. 624 The third difficulty with the Commission's case is that the weight of the evidence suggested that it was Coles and Woolworths who decided that, once the Suppliers began supplying ultra concentrates, they would cease to stock standard concentrates on their shelves for sale to consumers. Thus, the effective withdrawal of standard concentrates from the shelves of Woolworths and Coles that occurred by March 2009 was the product of commercial decisions made by Woolworths and Coles to "de-range" or cease buying standard concentrates from the Suppliers, not any arrangement or understanding between the Suppliers that they would refuse to supply standard concentrates to Woolworths and Coles from that time. 625 The documentary evidence, most of which was considered earlier in the detailed chronology, clearly indicated that Woolworths foresaw difficulties if it continued to stock standard concentrates alongside ultra concentrates. The difficulties included consumer confusion and issues concerning unit pricing. Woolworths also wanted to reduce the shelf space taken up by laundry detergents without de-ranging certain brands. Internal Unilever documents recorded that by August 2008, Woolworths had advised Unilever that it wanted all Unilever's brands to move to ultra concentrates from the first quarter of 2009 "to ease consumer confusion and reduce shelf space without requiring rationalisation". 626 The evidence also indicated that Unilever had initially considered that its Drive brand would not move to an ultra concentrated version. By August 2008, however, Woolworths had made it plain to Unilever that if Drive was not available in an ultra concentrate by the first quarter 2009 review date, "Drive will be de-ranged until the Q3 review". As for Coles, in an email that Mr Schadel of Coles sent to suppliers on 4 November 2008, he said that the key objectives of Coles' March 2009 review would be a "Complete Conversion of Laundry Detergents and Liquids to Concentrated formats" and that "Only new format concentrates will be considered as part of this review". 627 Mr Davey's evidence was that it was clear to him "later in 2008 that Coles and Woolworths did not want to buy or supply any standard concentrates for our [Cussons'] brands after ultra concentrates were introduced". Similarly, Mr Wilson's evidence was that, after he read emails sent by Mr Fuchs in early August 2008, it was clear to him that "Mr Fuchs' preference was not to supply both standard and super concentrates at the same time" and that "Woolworths' preference was to change all laundry powder SKUs to super concentrate". As for Coles, following a meeting that Mr Wilson had with Mr Schadel of Coles in August 2008, it was clear to Mr Wilson that Mr Schadel did not want Cussons to continue to supply Coles with both standard and ultra concentrates. There was no evidence that Cussons ever refused to supply standard concentrates that were the subject of an order from Coles or Woolworths. 628 The evidence of the Unilever witnesses also tended to confirm that Unilever stopped offering to supply standard concentrates to Woolworths because Woolworths had made it clear that it would not continue to buy that product. Mr Basha's evidence was that he "thought Woolworths wanted the standard concentrates gone" and that he was not aware that Woolworths ever requested Unilever to supply standard concentrates after the introduction of ultra concentrates. Similarly, Mr Bellingham's evidence was that, after a meeting with Woolworths in late July 2008, it was clear to him that "Woolworths did not want [Unilever] to continue to supply standard concentrates when [it] transitioned". In an email Mr Bellingham subsequently sent to Mr Fuchs, he confirmed that "Unilever will only produce ultra concentrate liquids and powders for the Australian retail market". Ms Katz's recollection was that Woolworths wanted a complete category changeover, which included all brands, and she did not believe that Unilever ever refused to supply standard concentrates. 629 Colgate's internal documents were essentially to the same effect. It would appear that as at July 2008, Colgate was planning to transition all its brands to ultra concentrates other than its Dynamo brand. By August 2008, however, the "trade" (the retailers) had indicated that they would "not accept non-Ultra formats post January [2009] to drive conversion". Internal Colgate emails confirmed that, while the initial proposal was to leave Dynamo in a standard format, feedback from the customer development team indicated that "they would all be deleted by Coles and Woolworths during the changeover" and that "[w]e must be in 2x ultra by January [2009] or the trade will de-list us". 630 It may readily be accepted that Woolworths and Coles were not in a position to dictate to Cussons or the other Suppliers what products they were or were not to manufacture. That proposition was put to and accepted by some of the Cussons witnesses in cross-examination. That is, however, not to the point. Cussons and the other Suppliers were no doubt free to continue to manufacture standard concentrates and supply those products to anyone who wished to purchase them. There was, however, little point continuing to manufacture standard concentrates if the major supermarket retailers did not want to buy them. Woolworths and Coles plainly had the power to decide that they did not wish to continue to purchase any particular product manufactured by the Suppliers, including standard concentrates. What they purchased and put on their shelves for sale to consumers was entirely a matter for them. 631 The evidence revealed that Woolworths and Coles decided that, once the Suppliers began manufacturing and supplying ultra concentrates, they no longer wished to purchase and stock standard concentrates. That decision was taken for a number of reasons. Those reasons related mainly to the business and commercial interests of Woolworths and Coles. The evidence does not support the inference or conclusion that the retailers ceased stocking standard concentrates because the Suppliers prevented, restricted or limited to supply standard concentrates to them. 632 Finally, it should be noted that, contrary to the Commission's submissions, Cussons did continue to sell some standard concentrates to Metcash after March 2009. The evidence in that regard was discussed earlier in the context of the detailed factual chronology. While the number and nature of those supplies was fairly limited, they were nonetheless inconsistent with the existence of the third of the Withhold Supply Provisions. Conclusion in relation to the alleged Withhold Supply Provisions 633 If there was an arrangement or understanding between Cussons, Unilever and Colgate concerning the transition to ultra concentrates in 2009, the evidence does not support the inference or conclusion that any such arrangement or understanding included the alleged Withhold Supply Provisions. Conclusion in relation to issues 1 and 2 of the Withhold Supply Arrangement issues 634 For all the reasons just given, the Commission failed to discharge its burden of proving, on the balance of probabilities, that Cussons entered into an arrangement, or arrived at an understanding, with Colgate and Unilever which contained the Withhold Supply Provisions. The evidence, considered as a whole, does not support or sustain such a finding. Issues 3, 4 & 5 – were the Withhold Supply Provisions exclusionary provisions? 635 Issues 3, 4 and 5 essentially concern whether the Withhold Supply Provisions as alleged were exclusionary provisions within the meaning of s 4D of the Act. It is strictly unnecessary to answer those questions given that it has been found that the Commission has not proved that Cussons entered into an arrangement, or arrived at an understanding, that contained the Withhold Supply Provisions. 636 It should perhaps be noted, however, that if it had been proved that Cussons had entered into or arrived at an arrangement or understanding that contained the Withhold Supply Provisions, the terms in which those provisions have been pleaded make the conclusion that they were exclusionary provisions within the meaning of s 4D of the Act effectively inescapable. Cussons did not submit otherwise. Issue 6 – giving effect to the Withhold Supply Arrangement 637 Given the findings that have been made, it is also unnecessary to consider issue 6 of the Withhold Supply Arrangement issues, which concerns whether Cussons gave effect to the Withhold Supply Provisions. As it has been found that Cussons did not enter into any arrangement, or arrive at any understanding, which included the Withhold Supply Provisions, it must follow that Cussons did not give effect to any such provisions. Issues 7 & 8 – contraventions 638 The answers to issues 7 and 8 of the Withhold Supply Arrangement issues also follow from the findings that have been made in relation to issues 1, 2 and 6. The Commission failed to prove that Cussons contravened either s 45(2)(a)(i) of the Act by making an arrangement, or arriving at an understanding, that included the Withhold Supply Provisions, and failed to prove that Cussons contravened ss 44ZZRK or 45(2)(ii) of the Act by giving effect to the Withhold Supply Provisions. THE ALIGNED TRANSITION ARRANGEMENT ISSUES 639 As was the case with the Withhold Supply Arrangement issues, it is convenient to consider issues 1 and 2 of the Aligned Transition Arrangement issues together. Issues 1 & 2: did Cussons enter into an arrangement or understanding with Colgate and Unilever which included the Aligned Transition Provisions? 640 The question, in simple terms, is whether, having regard to the whole of the evidence, the Commission has discharged its burden of proving, on the balance of probabilities, that Cussons made an arrangement, or arrived at an understanding, with Colgate and Unilever which included the Aligned Transition Provisions. 641 The short answer to that question is again "no": the evidence does not sustain such a finding. 642 It is important to reiterate, at the outset, that the alleged Aligned Transition Arrangement and Provisions were really simply alternative formulations of the alleged Withhold Supply Arrangement and Provisions. The Commission did not allege that there were two entirely separate and distinct arrangements and understandings between Cussons, Unilever and Colgate. As the Commission put it in its submissions, "the Aligned Transition Arrangement is reflective of the Withhold Supply Arrangement in the sense that both are concerned with the circumstances in which the Suppliers came to cease supply of Standard Concentrates and commence the supply of Ultra Concentrates". 643 The Commission no doubt pleaded the Withhold Supply Provisions in such a way that, if made out, they would be taken to be exclusionary provisions as defined in s 4D of the Act. To make out a contravention of s 45(2)(a), the Commission would then not need to prove that the provisions had the purpose, or would have or be likely to have the effect, of substantially lessening competition. The alternative formulation of the provisions in terms of the Aligned Transition Provisions required the Commission to prove that the provisions had that purpose or effect. 644 In any event, the Commission did not advance any separate submissions concerning issues 1 and 2 of the Aligned Transition Arrangement issues. It essentially relied on the submissions made in support of its case in respect of the Withhold Supply Arrangement. The Commission did not rely on any different or additional evidence to the evidence relied on in support of its case in respect of the Withhold Supply Arrangement. The material facts pleaded in support of the alleged Aligned Transition Arrangement were the same as those pleaded in support of the alleged Withhold Supply Arrangement. The Commission simply submitted that the direct and circumstantial evidence that established the existence of the alleged established the existence of the Aligned Transition Arrangement, including the Aligned Transition Provisions, and that Cussons was a party to that arrangement. 645 It is accordingly unnecessary to provide any additional reasons in respect issues 1 and 2 of the Aligned Transition Arrangement issues. It suffices to say that, for essentially the same reasons already given in relation to issues 1 and 2 of the Withhold Supply Arrangement issues, the Commission failed to discharge its burden of proving, on the balance of probabilities, that Cussons entered into an arrangement, or arrived at an understanding, with Colgate and Unilever which contained the Aligned Transition Provisions. The evidence, considered as a whole, does not support or sustain such a finding. Issues 3 & 5: purpose of the Aligned Transition Arrangement and Provisions 646 Issue 3 is whether the Aligned Transition Provisions had a substantial purpose of substantially lessening competition in the laundry detergent market. The Commission's particulars of the alleged anti-competitive purposes of the Aligned Transition Provisions were set out in great detail in paragraph 65 of the ASOC. Issue 3 addresses the first limb of the elements in s 45(2)(a)(ii) of the Act. Issue 5 is whether the Aligned Transition Arrangement had the purpose of preventing, restricting or limiting the production or likely production of laundry detergent products by any or all of Colgate, Cussons and Unilever. Issue 5 addresses the purpose element in s 44ZZRD(3)(a)(i) of the Act. It is relevant to the Commission's case that Cussons gave effect to a cartel provision and contravened s 44ZZRK in the period after 24 July 2009. 647 It is again strictly unnecessary to resolve issues 3 and 5 given that it has been found that Cussons did not enter into or arrive at any arrangement or understanding with Unilever and Colgate that included the Aligned Transition Provisions. It is also difficult and artificial to attempt to make a finding concerning the purpose or purposes for which Cussons entered into an arrangement or understanding containing the Aligned Transition Provisions in circumstances where it has been found that no such arrangement or understanding was in fact entered into or arrived at. It is even more difficult where, as discussed earlier, the Commission's case did not identify the officers or employees of Cussons who it alleged caused Cussons to enter into the Aligned Transition Arrangement. 648 It is also to be noted that the Commission did not advance any substantive submissions concerning these issues. Its submissions were mainly directed towards issue 4 relating to the effect of the Aligned Transition Provisions. The Commission's submissions in relation to the purpose of the Aligned Transition Provisions did not refer to the evidence that was said to support the proposition that the provisions had the impugned purpose or purposes. Rather, the effect of the submissions was that the terms of the Aligned Transition Provisions were such that the inference or conclusion that they had the requisite purpose was inescapable. 649 If it was necessary to determine whether Cussons' purpose or purposes for transitioning to ultra concentrates in March 2009, as opposed to some other time, was anti-competitive (in the sense described in ss 45(2)(a)(ii) and 44ZZRD(3)(a)(i) of the Act) as alleged by the Commission, the answer would be that the evidence does not sustain any such finding. For the reasons given earlier in the context of issues 1 and 2 of the Withhold Supply Arrangement issues, the substantial reason why Cussons transitioned to ultra concentrates in February or March 2009, as opposed to some other time, was so the transition would align with Woolworths' expectations and preferences that the transition be aligned with its major review. It should also be noted in this context that the Commission did not squarely put to any of the Cussons witnesses that Cussons' purpose in transitioning in March 2009, as opposed to some other time, was anti-competitive. 650 It is true that by late 2008 Cussons knew that both Colgate and Unilever were also likely to be transitioning at the same time in accordance with the expectations and preferences of Woolworths. Equally, it may be accepted that Cussons saw that a simultaneous transition was beneficial because it reduced or eliminated the potential risks that would accompany a unilateral transition. It does not follow, however, that Cussons' substantial purpose in transitioning when it did was anti-competitive as alleged by the Commission. On balance, the evidence considered as a whole does not support that inference or conclusion. 651 Equally, if it was necessary to determine whether Cussons' purpose or purposes for effectively ceasing the supply standard concentrates to Woolworths and Coles from March 2009 was anti-competitive, the answer would again be "no". The evidence does not support that inference or conclusion. As considered in detail in the context of issues 1 and 2 of the Withhold Supply Arrangement issues, the evidence revealed that the essential reason that Cussons ceased supplying standard concentrates to Woolworths and Coles was that both those retailers made it abundantly clear that they no longer wished to buy and stock standard concentrates. It should again be noted that the Commission did not squarely put to any of the Cussons witnesses that Cussons' purpose in ceasing the supply of standard concentrates to Woolworths and Coles was anti-competitive. Issue 4: the effect of the Aligned Transition Provisions 652 Issue 4 is whether the Aligned Transition Provisions had the effect, or likely effect, of substantially lessening competition in the laundry detergent market in that each provision had the effects, or likely effects identified in paragraph 65 of the ASOC. 653 It is again strictly unnecessary to determine this issue. That is because it has been found that Cussons did not enter into or arrive at, or was not a party to, any arrangement or understanding with Unilever and Colgate that included the Aligned Transition Provisions. Nevertheless, it may be useful to make some findings concerning the evidence that was adduced, and the arguments that were advanced, in support of this issue. 654 It was common ground that, in determining whether certain conduct has the effect or likely effect of substantially lessening competition in a market, it is necessary to apply a "with or without test". That means that the Court compares the state of competition in the market that exists or existed with the impugned conduct (here, the wholesale laundry detergent market with the agreement containing the Aligned Transition Provisions) and the state that the market would have been in if the conduct had not taken place. The hypothetical market "without" the collusive conduct is commonly, but not always helpfully, referred to, at least by seasoned and sophisticated competition lawyers, as the "counterfactual". The counterfactual in the present case was, or at least should have been, the laundry detergent market that would have existed in March 2009 and thereafter if Cussons, Unilever and Colgate had not entered into an arrangement or understanding containing the Aligned Transition Provisions. 655 The difficulty with the Commission's case that the Aligned Transition Provisions had the effect, or likely effect, of substantially lessening competition, at least insofar as it relied on Professor Williams' evidence and opinions, is that Professor Williams' opinions were premised on an assumed counterfactual that was unrealistic and contrary to what the evidence suggested would be the likely state of the laundry detergent market but for the Aligned Transition Provisions. As has already been discussed in some considerable detail, Professor Williams appears to have been asked to assume that the counterfactual was a "world in which conduct is unilateral". Thus, Professor Williams' analysis and opinions were based on his comparison between the laundry detergent market with the Aligned Transition Provisions, and the laundry detergent market where there was no explicit or implicit communication between the competitors in that market. And, it will be recalled, implicit communications would include, for example, a situation where one competitor was able to obtain information about the plans and decisions of another competitor from a retailer to which that competitor had disclosed its plans and decisions. 656 There could be little doubt that, as a matter of economic theory and economic modelling, the concept of unilateral conduct is important. Without wishing in any way to enter the academic debate between Professors Williams and Hay in respect of the Cournot and Bertrand models of oligopoly, it would appear that the concept of unilateral conduct is a useful concept in producing models for the purpose of predicting or analysing conduct in an oligopolistic market. That is not to say, however, that it is necessarily appropriate to assume that the market that would exist in the absence of an anti-competitive arrangement or understanding would be a market in which there was only unilateral conduct. Indeed, such an assumption would in many, if not most, cases be unrealistic. As Professor Williams himself noted, models of unilateral conduct or behaviour are at one extreme in a continuum between unilateral behaviour and the perfect cartel that manages to co-operate as if it were a pure monopoly. It is unlikely that many actual oligopolistic markets exist where there is only unilateral conduct – other than perhaps in textbooks or economic models. 657 There was no evidence to suggest that the laundry detergent market that would have existed in the absence of the Aligned Transition Arrangement would have been a market in which there was only unilateral conduct. Indeed, the evidence relied on by the Commission suggested that indirect and implicit communications and other forms of "coordinated interaction", which did not without more constitute or comprise the proscribed arrangements or understandings, were, and were likely to continue to be, commonplace in the laundry detergent market. That was likely to be the case even in the counterfactual "world" without the Aligned Transition Agreement. It was, for example, highly likely that in the counterfactual world, each of the Suppliers would continue to have the incentive and means to seek out and obtain market intelligence from the major retailers, Woolworths and Coles, about the plans and decisions of their competitors. The counterfactual world that Professor Williams was asked to assume permitted no such forms of indirect communication or coordinated interaction. It was, in that respect, artificial and unrealistic. That was, in many respects, the very point that was implicit, if not explicit, in Professor Hay's analysis. 658 As Professor Hay put it in his report: It is well understood by economists that, especially in an oligopoly setting, there can be a wide range of behaviour that falls short of a collusive arrangement or understanding. Yet, it appears that when Dr. Williams refers to "unilateral" conduct as the hallmark of his "but-for" world, he is ruling out the possibility that oligopolistic interdependence might influence how firms behave. He therefore appears to be limiting the possibilities to a "but-for" world in which firms ignore their interdependence and act as if sitting in a hermetically sealed chamber ignorant of and/or uncaring about what their competitors are doing and how they might react to one another's actions. Even aside from the ambiguity of what conduct would be permitted in Dr. Williams' "unilateral" world, a world in which real oligopolists who have been interacting in the marketplace for some time are imagined to ignore their history and their mutual independence seems to me to be a poor benchmark for constructing a useful "but-for" world. 659 The evidence clearly showed that the Suppliers were never likely to operate in a "hermetically sealed chamber". Nor was that likely to be the state of the market in the absence of the Aligned Transition Arrangement. The Commission submitted that the counterfactual that Professor Williams was asked to assume was "appropriately anchored in economic concepts". That was presumably a reference to the Cournet and Bertrand models of oligopoly behaviour. Even if that be so, it does not mean that it was a relevant or appropriate counterfactual. The Commission also submitted that Professor Williams' counterfactual does not exclude benign communications, but does exclude a retailer passing on commercially sensitive information from one Supplier to another Supplier. That was not how Professor Williams saw it. He gave the following evidence in cross-examination: Q: This may be obvious, Professor, but I just want to make sure that I get it clear, and it's clear for his Honour. It follows I think from what you've just said and from what you say in your reports, that there's no direct correlation between what you term "unilateral behaviour" and lawful or unlawful behaviour; is that correct? A: That's my understanding, yes. Q: Because the alternative to unilateral behaviour, as I've understood your opinion, is that a world in which there is some communication between competitors in some way, if I can put it that way? A: Yes. Q: And that communication isn't necessarily direct communication, for example? A: That's right. It may be merely by signalling in a market or some form – without even direct speaking to each other. Q: So, for example, in a case like this where you've got three laundry detergent suppliers out of – I think there are five in the market at the time – and two major retailers, your analysis would classify market intelligence acquired by a retailer as a communication of sorts? A: Yes. It could be via a third party, yes. Q: And in this analysis, there's no attribution of intent on the part of the supplier in either receiving information in that circumstance or, indeed, in providing it to its customer. Intent is irrelevant, in other words? A: Economics would be silent on intent. 660 On the whole, the evidence concerning the laundry detergent market, and the opinions of Professor Hay, show that the counterfactual that Professor Williams was asked to assume was unrealistic and flawed. That flaw undermined his analysis and opinions. Professor Hay's views concerning the appropriate counterfactual are to be preferred. 661 Putting Professor Williams' evidence and views concerning the counterfactual to one side, the Commission contended that, but for the Aligned Transition Arrangement, Colgate, Cussons and Unilever would not have, or would not have been likely to, simultaneously transition all of their powdered and remaining liquid laundry detergents for domestic use to ultra concentrates. Rather, in the Commission's submission, the following things would have, or would have been likely to have, occurred: first, one or other of the Suppliers would have changed their laundry detergent product range to ultra concentrates before the others; second, one or more of the Suppliers would have offered ultra concentrates at a lower price than standard concentrates which had an equivalent or similar performance in the laundry detergent market; third, one or more of the Suppliers would have supplied laundry detergent products with a variety of levels of concentration; fourth, laundry detergent products with a variety of package sizes would have been supplied; and fifth, laundry detergent products with a variety of appearances (including pack communications) would have been supplied. 662 In the Commission's submission, the consequences of those occurrences, or that state of affairs in the counterfactual world, would have been threefold: first, it was likely that there would have been vigorous price competition between standard concentrates and ultra concentrates; second, there would, or would have been likely to have been, higher ongoing demand for standard concentrates in the laundry detergent market; and third, there would, or would have been likely to have been, reductions in the price of ultra concentrates following their introduction to the laundry detergent market by reason of the implementation of discounts to encourage consumers to purchase ultra concentrates rather than standard concentrates. 663 There are a number of significant problems with those submissions, and the Commission's case concerning substantial lessening of competition generally. First and foremost, the evidence, considered as a whole, does not support the Commission's contentions about what was likely to have happened had there been no Aligned Transition Arrangement. The evidence has already been considered in considerable detail. Without repeating what has already been said, the following points can be made. 664 First, to the extent that the Commission's submissions rely on the opinion of Professor Williams concerning the likelihood of their having been a simultaneous transition if the Suppliers acted unilaterally, his opinion is not accepted for the reasons already given. The opinions of Professor Hay are to be preferred. It should be reiterated, in this context, that Professor Hay was not cross-examined. 665 Second, the Commission's case appears to be that the evidence established that, if the Suppliers had acted unilaterally, Woolworths would have insisted that the transition occur in February 2009. The suggestion appears to be that the Suppliers colluded with a view to pressuring Woolworths into moving the date to March 2009. That submission is rejected for the reasons already given. The evidence does indicate that Woolworths initially planned that the transition would occur in February 2009, but then moved the date to March 2009. The evidence tends to suggest, however, that this occurred by reason of overtures from Unilever and possibly Colgate. While Unilever and Colgate may have referred to their understanding of Cussons' position in their discussions with Woolworths, there is insufficient evidence to prove that Cussons engaged in any form of coordinated or collusive conduct with Unilever and Colgate to force Woolworths to move the launch date. There is also insufficient evidence that Woolworths agreed to change the date because it was somehow overwhelmed by the collective action of the Suppliers. 666 Third, for the reasons already given in detail, the evidence supports the proposition that both Woolworths and Coles made it clear to the Suppliers that, once ultra concentrated products were being supplied, they no longer wished to purchase standard concentrated brands from the Suppliers. Thus, even if the Suppliers were required to meet an earlier launch date in February 2009, it does not follow that Woolworths and Coles would have continued to purchase and stock standard concentrates for supply to consumers. They would have "de-ranged" any standard concentrates. There would therefore have been no scope for price competition of the sort suggested by the Commission. It should also be noted in this context that the evidence also tended to show that, while the Suppliers were each conscious of the risks of a complete transition to ultra concentrates if their competitors did not also completely shift to ultra concentrates at the same time, they also each saw considerable economic benefits in a complete transition to ultra concentrates. This was also contrary to the Commission's case that, in the counterfactual world, one or more of the Suppliers would have continued to supply standard concentrates for some time. 667 Fourth, the Commission did not point to any cogent or persuasive evidence in support of its contention that one or more of the Suppliers would have offered ultra concentrates at a materially lower price than standard concentrates. The Commission's contention in this regard also lacks clarity and precision. It raised more questions than it answered. If Woolworths had required the transition to have occurred in February rather than March 2009, which of the Suppliers would only have transitioned some of their brands, and how many brands would have remained in a standard concentrate format? For how long would that situation have continued? Would the alleged "vigorous price competition" have occurred at the retail or wholesale level? The Commission's case as articulated answered none of those questions. It amounted to little more than speculation. 668 Fifth, both Professor Williams and Professor Hay gave consideration to what had occurred in early 2008 when there was an incomplete transition to ultra concentrated liquid laundry detergents. The evidence indicated that Unilever changed all its liquid brands to ultra concentrates, whereas Cussons continued to supply both standard and ultra concentrated liquids. While there was some disagreement between Professors Williams and Hay in relation to the characterisation of the changes in pricing that occurred during or as a result of the transition to liquid ultra concentrates, it would appear to have been common ground that Cussons increased its price of liquid laundry detergents in February 2008, lost market share to Unilever, and did not subsequently decrease its prices in response. Thus, the incomplete transition to liquid ultra concentrates did not result in significant price competition. That would appear to be inconsistent with the Commission's case concerning price competition. It should also be noted in that regard that Professor Hay's unchallenged view was that he found no support for Professor Williams' prediction that an incomplete transition to ultra concentrated powder would have led to substantial discounting of ultra concentrates. Professor Williams' prediction was essentially unsupported by any empirical analysis. 669 Sixth, both Professor Williams and Professor Hay gave some consideration to the data concerning the pricing of laundry detergents following the March 2009 transition. Professor Hay's analysis of the available data, which related to the period commencing 20 months before March 2009 and ending 16 months after, was that average net wholesale prices of powder detergent fell 10.4% while average net wholesale prices of liquid detergent fell 4.2%. At the retail level, the average price paid per factored kilogram of powder detergent fell 6.6% while the average retail price paid per factored litre of liquid detergent rose by 1.9%. 670 Professor Hay's unchallenged opinion was that the overall effect of the transition was to benefit both retailers and consumers and that the introduction of ultra concentrates had a significant procompetitive impact on average wholesale net prices per factored kilogram of powder detergent. Professor Williams, in response, suggested that it was preferable to compare average prices over a shorter period. Even that analysis, however, showed that the average retail price of powdered detergent decreased by 2.97%. It does not appear that Professor Williams conducted the same analysis in relation to wholesale prices. 671 On the whole, Professor Hay's analysis of the pricing data is to be preferred to the analysis conducted by Professor Williams. Professor Williams' analysis was unpersuasive. 672 Finally, it should also be noted that the Commission's submissions barely dealt with the competition implications of the third of the Aligned Transition Provisions, which related to the supply of only ultra concentrates that met certain prescribed parameters. There was virtually no meaningful analysis of the state of competition in the market with that provision, as compared with the likely state of competition in the counterfactual world without it. That certainly did not feature in Professor Williams' reports. Nor did it feature in the Commission's submissions. There was, for example, no meaningful analysis of the likelihood of there being products with different levels of concentration in the counterfactual world, let alone any analysis of the likelihood or extent of any competition based on the different levels of concentration. There was no, or at least no meaningful, analysis of the differences in pack sizes or pack communications that may have existed in the counterfactual world, or how that would have impacted on competition. The absence of any analysis or submissions in relation to this aspect of the Commission's case concerning the effect of the Aligned Transition Provisions perhaps reflects the fact that, on the whole, the evidence simply did not support the Commission's case. 673 While it is perhaps possible to see some superficial attraction in the Commission's contentions concerning the anti-competitive impact of a simultaneous and uniform transition to ultra concentrates by all the Suppliers, ultimately its case in that regard was unsupported by any persuasive economic analysis on the part of Professor Williams, was contrary to the effectively unchallenged evidence of Professor Hay, and was in any event unsupported by the evidence of what was likely to happen in the absence of the alleged Aligned Transition Agreement, and what in fact happened to prices when the transition in fact occurred in March 2009. 674 Had it been necessary to consider and determine issue 4, it would have been determined adversely to the Commission. Issue 6: giving effect to the Aligned Transition Arrangement 675 Even accepting, for the sake of argument, that Cussons effectively fully transitioned to ultra concentrates at the same time as Unilever and Colgate, for the reasons already given the Commission failed to discharge its burden of proving that such conduct occurred as a result of Cussons giving effect to any arrangement or understanding it had made or arrived at with Unilever and Colgate. The Commission failed to prove that Cussons was a party to the Aligned Transition Arrangement. It therefore could not, in any relevant sense, give effect to any such arrangement. The Commission did not advance any substantive submissions in relation to this issue. Issues 7 & 8: contravention of s 45(2)(a)(ii), s 45(2)(b) and s 44ZZRK of the Act 676 Given that the Commission failed to discharge its burden of proving, on the balance of probabilities, that Cussons made an arrangement, or arrived at an understanding, with Colgate and Unilever which included the Aligned Transition Provisions, it must follow that Cussons did not contravene any of s 45(2)(a)(ii), s 45(2)(b) and s 44ZZRK of the Act in respect of the Aligned Transition Arrangement issues. CONCLUSION AND DISPOSITION 677 The Commission failed to discharge its burden of proving, on the balance of probabilities, that Cussons contravened s 45(2)(a)(i) and (ii), s 45(b)(i) and (ii) and s 44ZZRK as alleged. The evidence, considered as a whole, does not prove to the requisite standard that Cussons made an arrangement, or arrived at an understanding, with Unilever and Colgate that included the alleged Withhold Supply Provisions, or the alleged Aligned Transition Provisions. Nor does the evidence prove that Cussons gave effect to any such arrangements or understandings. Even if the Commission had been able to prove that Cussons made an arrangement or arrived at an understanding that included the Aligned Transition Provisions, it nonetheless failed to prove that the Aligned Transition Provisions had the purpose, or had or were likely to have, the effect of substantially lessening competition in the relevant market. 678 The appropriate orders are that the Commission's application, insofar as it related to Cussons, be dismissed with costs. I certify that the preceding six hundred and seventy-eight (678) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wigney. Associate: Dated: 22 December 2017