Fine dining serves up $2m fine
Koyo, a subsidiary of Japanese group JTEKT, has been handed a $2 million penalty after if was found to have conspired with its competitors to fix the price of ball bearings in the Australian market.
The Federal Court ruling on Friday follows an international investigation into the alleged cartel, Australian Competition and Consumer Commission chairman Rod Sims said.
Since 2000, senior executives from ball-bearing suppliers ran a dinner club, the Southern Cross Association, meeting three or four times a year in Sydney and Melbourne, the court found.
Koyo controls up to 10 per cent of the $400 million-a-year Australian ball bearing market, which it shares with fellow Japanese engineering groups NSK and Nachi.
In February 2008, Koyo managing director Hiroshi Sano and his counterparts - Naofumi Tada of NSK Australia and Ryo Kodama of Nachi Australia - sat down for dinner at Azuma, at the base of the Chifley Tower. It is no stranger to high-powered gatherings, with corporate heavyweights including David Gonski, Jennifer Westacott and Qantas spin doctor Olivia Wirth among those who have supped on treats such as steamed baby abalone and seared salmon belly sushi.
At the February dinner, the companies exchanged confidential information about the prices they were charging for "after-market" (AM) bearings - those used to repair and maintain machinery.
It was agreed to "implement an increase in the sales price for bearing products to AM customers in Australia", Justice Richard Edmonds said.
The association reconvened in May at the Kabuki Shoroku restaurant in Clarence Street, where Koyo struck a deal to increase its price by 3 per cent.
NSK and Nachi, who were not parties to the lawsuit, allegedly agreed to raise their prices by 4 per cent. Further rises were agreed at another dinner in 2009. Koyo admitted cartel conduct. Mr Sims said the investigation was continuing.
Frequently Asked Questions about this Article…
The Federal Court handed Koyo a $2 million penalty for conspiring with competitors to fix the price of ball bearings in the Australian market.
Koyo was fined $2 million for participating in a price-fixing cartel with other ball-bearing suppliers in Australia, which is illegal under competition laws.
The Southern Cross Association was a dinner club where senior executives from ball-bearing suppliers met three or four times a year to discuss pricing strategies, which led to the price-fixing scandal.
Koyo controls up to 10% of the $400 million-a-year Australian ball bearing market.
The Australian Competition and Consumer Commission (ACCC) was involved in the international investigation that led to the Federal Court ruling against Koyo for price-fixing.
NSK and Nachi, both Japanese engineering groups, were involved in the price-fixing scandal with Koyo, although they were not parties to the lawsuit.
During the February 2008 dinner at Azuma, Koyo and its counterparts agreed to implement an increase in the sales price for bearing products to after-market customers in Australia.
At the May meeting at Kabuki Shoroku restaurant, Koyo struck a deal to increase its prices by 3%, while NSK and Nachi allegedly agreed to raise their prices by 4%.
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