Price-fixing talk over the wagyu costs Koyo $2m
Eight courses at top Sydney restaurant Azuma normally costs $110 a head, but one 2008 dinner has cost ball-bearing maker Koyo $2 million.
Koyo, a subsidiary of Japanese group JTEKT, has been ordered to pay a $2 million penalty after it 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 followed an international investigation into the alleged cartel, Australian Competition and Consumer Commission chairman Rod Sims said. "We've ramped up our work in cartels," he said. "We've got 10 or more investigations going."
Since the turn of the century executives of ball-bearing suppliers ran a dinner club, known as the Southern Cross Association, that met 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-bearings 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 to dinner at Azuma.
The restaurant, at the base of the Chifley Tower in the CBD, is no stranger to high-powered gatherings. Corporate heavyweights including David Gonski, Business Council of Australia chief executive Jennifer Westacott and Qantas spin doctor Olivia Wirth are 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 with its rivals to increase its price 3 per cent.
NSK and Nachi, who were not parties to the lawsuit, allegedly agreed to raise their prices 4 per cent.
Further price rises were agreed upon at another dinner in 2009.
Koyo admitted to the cartel conduct and agreed to the $2 million penalty. Mr Sims said the investigation was ongoing.