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Kuehne + Nagel fined US$2.7 million for air cartel in New Zealand
NEW ZEALAND's High Court in Auckland has fined Swiss freight forwarder Kuehne + Nagel NZ$3.1 million (US$2.7 million) plus costs, for breaches of the Commerce Act as part of the so-called Gardening Club that practiced "hard core cartel behaviour" in the air cargo market.
This latest and final fine brings the total penalties ordered in this long-standing case to NZ$11.95 million with the company paying the biggest fine of the lawsuit, reported UK's Handy Shipping Guide.
Kuehne + Nagel is one of six international freight forwarding companies investigated by the New Zealand Commerce Commission for cartel behaviour.
The other five defendants of the probe launched in 2007 have admitted their role in the cartel and paid penalties in 2010 and 2011. Kuehne + Nagel challenged the Commission's jurisdiction, but was unsuccessful in both the High Court and Court of Appeal.
Kuehne + Nagel admitted to being part of a secret cartel that called itself the Gardening Club that agreed to charge surcharges on air freight forwarding services from the UK to countries including New Zealand, ostensibly to cover the costs of increased security measures imposed in the UK.
The cartel participants agreed that they would each pass on certain costs to customers, rather than compete in the usual way and determine their own pricing structures and price levels.
Said commission chairman Mark Berry: "The Gardening Club was a classic hard-core cartel. Members attended covert, off-site meetings outside of business hours and used code words to describe the agreed surcharges.
"Our investigation uncovered emails in which Gardening Club members referred to the agreed surcharges as the new price for asparagus for the forthcoming season' and the price of marrows," said Dr Berry.
This latest and final fine brings the total penalties ordered in this long-standing case to NZ$11.95 million with the company paying the biggest fine of the lawsuit, reported UK's Handy Shipping Guide.
Kuehne + Nagel is one of six international freight forwarding companies investigated by the New Zealand Commerce Commission for cartel behaviour.
The other five defendants of the probe launched in 2007 have admitted their role in the cartel and paid penalties in 2010 and 2011. Kuehne + Nagel challenged the Commission's jurisdiction, but was unsuccessful in both the High Court and Court of Appeal.
Kuehne + Nagel admitted to being part of a secret cartel that called itself the Gardening Club that agreed to charge surcharges on air freight forwarding services from the UK to countries including New Zealand, ostensibly to cover the costs of increased security measures imposed in the UK.
The cartel participants agreed that they would each pass on certain costs to customers, rather than compete in the usual way and determine their own pricing structures and price levels.
Said commission chairman Mark Berry: "The Gardening Club was a classic hard-core cartel. Members attended covert, off-site meetings outside of business hours and used code words to describe the agreed surcharges.
"Our investigation uncovered emails in which Gardening Club members referred to the agreed surcharges as the new price for asparagus for the forthcoming season' and the price of marrows," said Dr Berry.
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