REAL ESTATE UNDERTAKINGS & FINDINGS - ACC

The following are some recent undertakings and decisions concerning real estate and like businesses:

RAY WHITE REAL ESTATE

ACCC accepts Ray White Real Estate administrative undertakings.

The Australian Competition and Consumer Commission has accepted administrative undertakings from Ray White (Real Estate) Pty Ltd and one of its agencies following allegations of misleading and deceptive advertising.

Ray White (Real Estate) Pty Ltd is the master franchisor of the Ray White network in Queensland.
Following a complaint about the advertising and auction of three properties in Brisbane's northern suburbs in late 2003, the ACCC expressed concern that the properties were promoted using indicative prices significantly below the prices at which they were passed at auction. The ACCC believed the action placed the agency at risk of breaching the misleading and deceptive conduct provisions of the Trade Practices Act 1974, in particular, sections 52, 53(e) and 53A*.
 
Ray White Pty Ltd and its agent acknowledged that the actions may have raised implications under the misleading or deceptive conduct provisions of the Act and offered administrative undertakings to address the ACCC's concerns and to ensure future property advertising by the entire Queensland Ray White network comply with the Act.

As part of its administrative undertakings, Ray White Pty Ltd and its agent have agreed to: ACCC Chairman, Mr Graeme Samuel, said the administrative undertakings are an effective and positive resolution to this matter and the high level of cooperation provided by Ray White Pty Ltd and its agent should also be acknowledged.

"The undertakings are particularly beneficial as they seek to ensure compliance by the entire Queensland Ray White network.

"Ray White's recognition that its agent's actions in this instance may raise implications under the Act should alert other real estate companies that it is in their commercial interests to ensure that advertising practices comply with the Act", Mr Samuel said.

January 2005
*Section 52 prohibits a corporation from engaging in conduct which is misleading or deceptive, or which is likely to mislead or deceive. Section 53(e) prohibits a corporation from making false or misleading representations with respect to the price of goods or services. Section 53A prohibits a corporation from making false or misleading representations in relation to the sale of land.


ANGLO ESTATES

Property developer penalised for attempted price fix Property developer Anglo Estates Pty Ltd attempted to enter into price-fixing and other anti-competitive arrangements with the Shire of Esperance over the sale of land in the shire, in breach of the Trade Practices Act 1974, the Federal Court, Perth has found.

Justice Robert French also declared that Anglo Estates directors, Ken and Ross Williamson, had attempted to induce the Shire to enter into a price-fixing arrangement in contravention of the Act.
The court ordered Anglo Estates to pay pecuniary penalties of $15,000 and Mr Ross Williamson to pay a pecuniary penalty of $5,000. While the Australian Competition and Consumer Commission sought higher penalties against Anglo Estates and its directors, Justice French believed a modest penalty was appropriate. The ACCC is currently considering that aspect of the judgment.

The declarations and penalties follow ACCC action in March 2004 which alleged that Anglo Estates tried to reach an arrangement where the Shire would not sell vacant residential lots in its Flinders Estate development for less than $80,000 per lot when lots first became available, with annual CPI adjustments for subsequent years.

It was also alleged that Anglo Estates attempted to reach an arrangement in which the Shire would not develop and sell until the end of 2010 some vacant residential lots in its Flinders Estate development.
The ACCC did not allege in any way that the Shire had contravened the Act.
By consent the Federal Court declared that Anglo Estates had attempted to contravene the Act and that the Williamsons had attempted to induce the Shire to contravene the Act. By consent the court also restrained Anglo Estates and its directors from engaging in similar conduct for three years and ordered Anglo Estates to pay the ACCC's costs.

"Consumers in any part of Australia, facing important decisions about the purchase of residential land are entitled to expect that land prices are determined by a fair market and not dictated by attempts at anti-competitive conduct", ACCC Chairman, Mr Graeme Samuel, said.


LIQUORLAND

Federal Court penalises Liquorland $4.75 million for anti-competitive liquor deals Liquorland (Australia) Pty Ltd has been penalised $4.75 million by the Federal Court after the company admitted that it entered into illegal agreements with a number of applicants for liquor licences in New South Wales.

"This is a significant penalty for a contravention of Part IV of the Trade Practices Act which should serve as a warning to other companies which may try to prevent new entrants to markets from being able to compete effectively", Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, said today.

The ACCC instituted legal proceedings in the Federal Court against Liquorland and Woolworths Limited on 30 June 2000. The case against the second respondent Woolworths is continuing before Justice Allsop.
Liquorland, a subsidiary of Coles Myer Ltd, admitted to five contraventions of the exclusionary (primary boycott) provisions of the Act. In determining the appropriate penalty to recommend to the court, the ACCC welcomed Liquorland's cooperation in resolving the case prior to the commencement of a lengthy and expensive trial.

"Following the ACCC first raising the issue with Coles Myer the company ceased entering into similar agreements", Mr Samuel noted. "The ACCC also recognises that Coles Myer has in recent years made a substantial investment in trade practices law compliance training and strategies throughout the company".

Liquorland has conceded that it had entered into five agreements with liquor licence applicants for the substantial purpose of restricting and preventing those businesses from competing with its own Liquorland stores in the supply of takeaway liquor.

The ACCC had alleged that the conduct arose in circumstances where Liquorland objected to certain liquor licence applications and then proposed restrictive agreements in return for withdrawing their objections. The restrictive agreements contained one or more conditions to the following effect: The ACCC agreed to discontinue a number of its claims against Liquorland in order to settle the matter.
Justice Gyles today ordered Liquorland pay pecuniary penalties of $950,000 for each of the contraventions ($4.75 million in total) as follows: When imposing the penalty of $4.75 million against Liquorland, Justice Gyles noted that: "each of the deeds in question constituted a significant restriction upon the business of the third party compared with the position that would have pertained had the party obtained an unrestricted licence…. It is also obvious that consumers lost the choice and competition between outlets that otherwise would have been available in the event a third party did obtain an unrestricted licence.
"It follows that there would have been significant loss or damage to those parties and a significant gain to Liquorland by reason of the contravening conduct".

In addition Justice Gyles ordered injunctions against Liquorland preventing it for a period of three years from engaging in similar conduct in the future or giving effect to any existing deeds which had legal effect independently of proceedings in the Licensing Court in respect of a liquor licence application and which was made for the purpose of preventing, restricting or limiting the supply of takeaway liquor. He also ordered that Liquorland make a contribution to the ACCC's costs of $250,000.


PETROL PRICE FIXING

ACCC begins proceedings for alleged petrol price-fix The Australian Competition and Consumer Commission has begun legal proceedings alleging price-fixing by two petrol retailers in the suburb of Woodridge, south of Brisbane.

The ACCC has alleged in the Federal Court that during periods in 2002 to 2004 Mr Terence O'Keeffe and Mr Parmjit Singh, the respective managers of the Matilda Woodridge and BP Logan City sites (which are both located on Kingston Road Woodridge) made and gave effect to arrangements that they would agree the time within the weekly price cycle that they would each increase their prices for unleaded petrol, and the amount they would each charge.

It is further alleged that Mr Terence O'Keeffe and Mr Parmjit Singh made and gave effect to an arrangement to increase their respective prices for liquefied petroleum gas (LPG) in November 2002. 
It is alleged Mr Terence O'Keeffe made the unleaded petrol arrangements on behalf of O'Keeffe Nominees Pty Ltd, and the LPG arrangement on behalf of Meribell Pty Ltd. It is alleged Mr Parmjit Singh made both the unleaded petrol and the LPG arrangements on behalf of Gullyside Pty Ltd.  It is alleged such arrangements contravene section 45 of the Trade Practices Act 1974.

The ACCC is seeking injunctions and declarations against Gullyside Pty Ltd and Mr Parmjit Singh, and is seeking injunctions, declarations and pecuniary penalties against O'Keeffe Nominees Pty Ltd, Meribell Pty Ltd and Mr Terence O'Keeffe.


PROPERTY INVESTMENT SEMINAR
 
Advertisements for millionaire property investment seminar 'misleading'

The Federal Court has made orders, by consent, against property investment seminar promoter Giann & Giann Pty Ltd and its director, Mr John Giannopoulos, for misleading and deceptive conduct in the promotion of a Secrets of a Real Estate Millionaire property investment seminar.

Giann & Giann Pty Ltd, trading as Break Free Events, was responsible for advertisements which appeared in a number of Australian newspapers in late 2003, advertising a "Free Event" to be presented by property investor, Mr Peter Flanagan.

The Australian Competition and Consumer Commission instituted proceedings against Giann & Giann and Mr Giannopoulos in September 2004, alleging that in the newspaper advertisements, as well as brochures handed out to attendees of the free seminars advertising a four-day course, the following representations were made: when, in fact: The ACCC alleged that Mr Giannopoulos had aided, abetted, counselled or procured and was knowingly concerned in or a party to Giann & Giann's alleged misleading and deceptive conduct in promoting the seminars and course.

The Federal Court has declared, by consent, that the conduct of Giann & Giann and Mr Giannopoulos in relation to the advertisements and brochures was misleading and deceptive or likely to mislead or deceive in contravention of section 52 of the Trade Practices Act 1974.
Further, the Federal Court has ordered the following by consent: "This is a good result of the ACCC's campaign against misleading conduct by wealth-creation promoters", ACCC Chairman, Mr Graeme Samuel, said today.


WESTFIELD ACQUISITIONS

ACCC not to oppose Westfield acquisitions
The Australian Competition and Consumer Commission will not oppose the acquisitions by Westfield of 25 per cent of Sunshine Plaza (Queensland) and 50 per cent of Woden Plaza (ACT) and Penrith Plaza (NSW) from General Property Trust, ACCC Chairman, Mr Graeme Samuel, said today.
"Following market inquiries among retailers and landlords, the ACCC considers that the acquisitions are unlikely to substantially lessen competition", Mr Samuel said.

"Westfield owns a number regional shopping centres* in Sydney and one in Canberra. However, the ACCC does not consider that this transaction will result in a substantial lessening of competition as Westfield will face competition from other regional shopping centres and, to a lesser extent, from other retail centres.

"In addition, large tenants have a degree of countervailing power against Westfield and other landlords as they are essential to the success of any regional shopping centre.
"In the case of Sunshine Plaza, Westfield's 25 per cent stake will not give it management control. It is management control rather than centre ownership which is the most relevant factor in determining how a regional shopping centre deals with its retail tenants".

The ACCC will issue a public competition assessment on this matter in due course.


REAL ESTATE PRICE PROJECTIONS

Gary Peer & Associates found to have misled buyers

Real estate agents Australia-wide have been warned not to mislead prospective buyers over price projections following a Federal Court decision today.

Justice Sundberg has found that Gary Peer & Associates Pty Ltd had engaged in misleading conduct in the way it advertised a property at 341 Glen Eira Road, Caulfield, Victoria in 2003.
The company advertised the property with the representations "price guide $600,000 plus buyers should inspect" and later "price guide $650,000 plus buyers should inspect".

The court found that the representations falsely represented the price at which: The court also found that Gary Peer & Associates Pty Ltd did not have reasonable grounds to make the representations.

Justice Sundberg stated it was appropriate in this case to make declarations to mark the court's disapproval of the real estate agency's conduct. He noted that "the subject matter of the case is of considerable public interest, involving as it does advertisements for the sale of real property that affect many members of the public".

He noted that "the applicant, as a public body charged with the responsibility for enforcing the Act, has a genuine interest in seeking declarations".

The court ordered the company to pay the ACCC's costs.
In 2003 the ACCC identified misleading and deceptive behaviour in the property industry as a priority area. Since that time the ACCC has worked with the industry at both the national and local levels to improve compliance with the Act.

"The Trade Practices Act requires adequate and appropriate disclosure at all times of all relevant price information, so that prospective buyers and the general public can make informed pricing decisions", ACCC Chairman, Mr Graeme Samuel, said.  "This case is the first case of the underquoting of property prices brought by the ACCC.  The decision has national coverage.

"The court's decision is a timely reminder that the real estate industry has to be ever vigilant and compliant with the Trade Practices Act in respect of its advertising practices".


UNDERGROUND PROPERTY SCAMS

'Underground' property scams will be pursued: ACCC

The Australian Competition and Consumer Commission will continue to pursue misleading property scams regardless of the methods used to entice potential investors, ACCC Chairman, Mr Graeme Samuel, has warned in a speech to the Real Estate Institute of Victoria.
He was responding to claims that property seminars which made misleading promises about quick wealth had gone 'underground'.

"We are … aware that as the heat has been turned up on [misleading property] seminars, promoters are turning to other methods to continue to lure investors through spam, direct marketing, telemarketing and even door-to-door.

"Be assured that regardless of the method used, the ACCC will continue to keep a close eye on the property spruikers and take action to protect consumers".
Mr Samuel said that since it launched its campaign in the property area, the ACCC had received more than 300 complaints and inquiries into its InfoCentre about property seminars, two-tier/time-share property schemes, auctioneer bidding processes and general concerns about real estate representations.

"It's clear from those complaints, and very recent discussions we have had with the industry, that many in the real estate industry are ignorant of their responsibilities under the Trade Practices Act, and the role of the ACCC.

"This is of particular concern, as the Commission has made it clear that real estate practices are a priority area".
Mr Samuel said it appeared agents didn't typically seek legal advice about their obligations under the Trade Practices Act, and nor was the Act specifically covered in real estate agents' training courses.
 
"There also appears to be some confusion in the industry, particularly in Victoria, about the powers of the ACCC and whether this conflicts with state government consumer affairs agencies and their administration of specific real estate legislation".

Among the ACCC's concerns was dummy bidding, which the ACCC regarded as "completely unacceptable" and which was being outlawed in some States.

"I am aware of concerns in the industry about the proscriptive nature of the[se] new regulations, and suggestions that they may lead to anomalies such as the banning of otherwise perfectly legitimate practices.
"May I suggest that the industry has only itself to blame for these consequences. Every industry – regardless of whether they are real estate agent, phone companies or retail giants - must be sensitive to community expectations and standards.

"Any industry which fails to respond to legitimate community concerns cannot complain when governments, which are sensitive at all times to the electorate, then pick up the ball and run with it.
"I should point out that irrespective of the laws introduced in various states and territories, this will not in any way negate the provisions of the Trade Practices Act, nor undermine our ability to intervene when we believe there has been deceptive or misleading conduct.

"While I strongly support moves by the states to clean up the auction process and outlaw dummy bids, the Commission will stand firm on the need for open and transparent processes that are not likely to mislead, and take action to enforce this where necessary.

"Even if an agent believes their actions to be legal under state law, we can, and will act, when behaviour contravenes the Trade Practices Act".

Mr Samuel commented that concerns about under- and over-quoting continued to be brought to the ACCC.

"In the view of the ACCC such behaviour can’t be viewed as anything other than deceptive and misleading conduct", he said.

"The Trade Practices Act requires adequate and appropriate disclosure at all times of all relevant price information, so that prospective buyers and the general public can make informed pricing decisions.
"Advertising or quoting a property at a price significantly less than the agent's estimated selling price, the market valuation or the vendor's price indications constitutes a breach of the Trade Practices Act.  The Act would also be breached if an agent over quotes the value of a property to a vendor in order to obtain the listing".


TWO TIER PRICING

ACCC to appeal property marketing scheme decision

The Australian Competition and Consumer Commission will appeal some aspects of the judgment of the Federal Court made on 18 December 2003 in ACCC v Oceana Commercial Pty Ltd and Others.
In that judgment, Justice Kiefel did not find that the conduct of various parties alleged to be involved in a property marketing scheme on the Gold Coast contravened the Trade Practices Act 1974.

The ACCC, which instituted proceedings in November 2001, acted on a complaint received from a couple in Cairns who attended an investment seminar conducted by National Asset Planning Corporation Pty Ltd and were subsequently flown to the Gold Coast to view investment properties and visit a finance consultant, Investlend (Aust).  The couple purchased a unit within a marketed development on that day. 
Justice Kiefel considered that the ACCC did not establish that the prices paid were above the fair market value.  Justice Kiefel did not find that the conduct of the lawyer involved in the conveyancing of the property for the couple or that of the property developers, had been shown to contravene the Act.   
Further, Justice Kiefel found that the conduct of the Commonwealth Bank of Australia, utilised to finance the couple's purchase of the unit, was not unconscionable.  It was not alleged by the ACCC that the bank was directly involved in the property marketing to the purchasers.

The appeal is expected to be heard before the Full Federal Court in May 2004.


WESTFIELD'S UNCONSCIONABLE CONDUCT

ACCC settles unconscionable conduct, misleading conduct action against Westfield
An Australian Competition and Consumer Commission action against Westfield Shopping Centre Management Co. (Qld) Pty Limited (and associated companies and individuals) alleging unconscionable conduct and misleading conduct has been  settled on a without admissions basis.

As part of the settlement, Westfield has paid an agreed amount to former retail tenants of a shop at the Indooroopilly Shopping Centre in Brisbane (formerly managed by Westfield) and has undertaken to the Federal Court of Australia that, in future, it will use a specific release of liability clause when entering into settlement agreements with retail tenants*.

"Westfield has provided an undertaking to the Federal Court of Australia addressing the ACCC's concerns that a condition sought through its solicitors from the former tenants during settlement of private litigation between Westfield and those tenants may have contravened section 51AC** of the Trade Practices Act 1974", ACCC Chairman, Mr Graeme Samuel, said today.

The ACCC began proceedings against Westfield in October 2001 alleging misleading or deceptive conduct and unconscionable conduct in breach of the Act.  In particular, the ACCC alleged that Westfield acted unconscionably by making it a condition of the  settlement of the private litigation that the former tenants would sign a deed of release containing a certain clause releasing liability.  Amongst other things, the clause required that the former tenants not commence, recommence or continue any action in connection with the subject matter of their private litigation, including commencing, recommencing or continuing any administrative or governmental investigation against Westfield (or other parties involved in the private litigation).

The ACCC considered that the condition might have impeded the tenants from approaching or assisting the ACCC in any investigation into Westfield’s conduct.

Westfield acknowledged that the condition may have had the effect of discouraging  the tenants from approaching or assisting the ACCC, although this effect was not intended.

The ACCC was concerned that this condition was not reasonably necessary for the  protection of Westfield’s legitimate interests in ensuring the finality of the private action between Westfield and the former tenants, and arose in circumstances where there was a significant difference in the relative bargaining strengths of the parties.

"The ACCC considers the matter to be one which raises significant public interest issues", Mr Samuel said.

"The ACCC wanted to ensure it or any other law enforcement agency is not unduly fettered in its investigative functions or inhibited in the performance of its public duties".

"The resolution of this matter provides some clarification for landlords and shopping centre managers about the ACCC's expectations in dealing with tenants.  It also preserves the freedom of citizens to co-operate with enforcement agencies and ensures that the public interest is served".

"The ACCC regards as a high priority the prohibitions on unconscionable conduct in Part IVA of the Act.  All businesses must be careful not to inappropriately use any power they may have in their dealings with small business.  The ACCC is, and will continue to be, a strong enforcer of the law, without fear or favour".

Westfield will contribute to the ACCC’s legal costs.


HILL END PROPERTY DEVELOPER

Hill End property developer to refund all purchasers following undertaking to ACCC
Property buyers will receive refunds following an Australian Competition and Consumer Commission investigation of a property development.

The former and current directors of the property developer Hill End Recreation Park Pty Ltd (trading as Hill End Property Group) have given the ACCC court-enforceable undertakings following alleged misleading or deceptive conduct in the sale of land at Hill End, in central New South Wales.

Between December 2003 and February 2004 the company, in advertisements in Sydney newspapers, in brochures, and via its website, promoted the sale of various sized blocks of land ranging from 80 square metres for $1,290 to one acre for $50,000.  The company implied that freehold title to blocks would be provided, that the land was suitable for the building of dwellings, and a development application for building permits was to be submitted to the local council.

The ACCC's investigations revealed that individual buyers would not have received freehold title to any block but rather 1/100,000 share of the 12.5 hectares under subdivision.  Further, the company did not own the land proposed for the subdivision, rather the company held an option to buy it, however that option was not exercised.  Consequently purchasers could not obtain title to a share of the land.  The ACCC also ascertained that local government restrictions would prevent approval of subdivision of the land and its use for the building of multiple dwellings.

The company's directors, Mr Brendon Davenport and Mr Michael Braithwaite, have acknowledged that consumers were misled by the actions of the company and its representatives.  They have given personal undertakings to the ACCC to ensure all purchasers receive refunds.  At least $60,000 in deposits and payments, representing purchases exceeding $160,000, were made by more than 30 consumers.  Payments by other purchasers are yet to be ascertained.

The company's representative, Mr Chris Sharp, has had his authority to sell land on the company's behalf revoked, and no longer acts for the company.  An Administrator has been appointed to the company.

Purchasers whose details are held by the company will be contacted to arrange refunds and the directors are still awaiting details of some consumers' purchases from sales agents.  The directors will also place corrective notices in relevant press seeking direct contact from certain consumers.
Consumers who do not hear from the directors may seek a refund by providing proof of payment to the company's solicitor Mr Joseph Kotowicz, Konstan Lawyers, (02) 9558 3344.

The ACCC acknowledges the cooperation of the company's directors in taking action to satisfactorily resolve the ACCC's concerns.

"This is a very satisfactory result for consumers who were misled when buying the Hill End land", ACCC Chairman, Mr Graeme Samuel, said today. "The ACCC has been conducting a successful crackdown on misleading and deceptive conduct in the realty area.
"Today's announcement is an important step in this campaign and indicates that the high priority the ACCC places on consumer redress".

Section 52 of the Trade Practices Act 1974 prohibits businesses from engaging in conduct in trade or commerce that is misleading or deceptive or is likely to mislead or deceive.  Section 53A of the Act prohibits businesses from making misleading representations concerning the nature of the interest in the land or the use to which the land is capable of being put or may lawfully be put. 


PROPERTY INVESTMENT PROMOTION

ACCC institutes against Break Free Events over property investment promotion
The Australian Competition and Consumer Commission has instituted legal proceedings against Giann & Giann Pty Ltd and its director, Mr John Giannopoulos, alleging misleading and deceptive conduct over the promotion of a Secrets of a Real Estate Millionaire property investment seminar.

Giann & Giann Pty Ltd trades under the name Break Free Events and is alleged to be responsible for advertisements which appeared in a number of Australian newspapers in late 2003, advertising a "Free Event” to be presented by property investor Mr Peter Flanagan.

The ACCC has alleged that in the newspaper advertisements, as well as brochures handed out to attendees of the free seminars advertising a four-day course, the following representations were made: when, in fact:
The ACCC further alleges that Mr Giannopoulos aided, abetted, counselled or procured; and was directly or indirectly knowingly concerned in or a party to Giann & Giann’s alleged misleading and deceptive conduct in promoting the seminars and course.

The ACCC is seeking: A directions hearing will be held.


PORT BOTANY LEASE

No ACCC action over Vopak Port Botany lease

The Australian Competition and Consumer Commission will not take action concerning the storage lease agreement between Vopak Terminals Sydney Pty Ltd and the Shell Company of Australia to store jet fuel and other petroleum products at the Vopak Terminal at Port Botany, ACCC Chairman, Mr Graeme Samuel, said today.

"Concern over access to fuel supplies arising from the introduction of tighter fuel standards by State and Commonwealth Governments has had a noted impact on the business of independent importers", Mr Samuel said. "The ACCC's market inquiries have revealed that, as major independents retailers have sought longer term contracts with the domestic refiner/marketers in order to protect their operations, independent imports have become less viable".

Mr Samuel noted that the loss of these contracts made it difficult for independent importers to develop a profitable business case for the leasing of the Vopak facilities.

"During the ACCC's inquiries concerns were expressed over the impact of recent developments such as the supermarket alliances on the independents'operations", Samuel said.  "However, in regard to the storage terminals at Port Botany, it is the ACCC's view that the fuel standards have had a far greater impact as independents have sought certainty of supply".

Shell will acquire the 65,000 cubic metres of storage at Port Botany that is currently leased to Trafigura Fuels Australia Pty Ltd, an importer and wholesaler of leaded and unleaded petrol and diesel to independent distributors and retailers.  This lease expires at the end of August 2004.  Should the ACCC oppose the leasing of the terminal space by Shell it is likely that the 65 000 cubic metres storage would remain unused.

The ACCC conducted market inquiries to determine the impact on competition in the wholesale and retail petroleum markets and has come to the view that that the Vopak/Shell arrangements would not substantially lessen competition for the purposes of the Trade Practices Act 1974.

Background

Vopak currently leases terminal storage at Port Botany to Trafigura (65 000 cubic metres) and to Woolworths (35 000 cubic metres).  Trafigura's lease expires at the end of August 2004 and Woolworths' lease expires in mid-2006.  Trafigura, an independent importer of petroleum products, brings in fuel to its own terminal at Hastings in Victoria and to the Port Botany terminal in New South Wales, which it leases from Vopak.

Since January 2000 some State Governments and the Federal Government have introduced tighter standards for fuel, which have constrained the ability of independent importers to source fuel from the Asia-Pacific region and to import fuel into Australia on a commercial basis.  Western Australia introduced tighter fuel standards in January 2000, Queensland in July 2000 and South Australia in March 2001.  The Federal Government introduced tighter Commonwealth fuel standards in January 2002 which were to be progressively introduced to January 2006.

The Commonwealth fuel standards that took effect from January 2004 relate to the amount of olefins and methyl tertiary-butyl ether (MTBE) that can be included in petrol.  There was a degree of uncertainty last year about whether fuel meeting these standards would be available in the Asia-Pacific region from independent refineries.  This led to several larger independents, who previously sought fuel from imports, changing their supply arrangements by contracting significant supplies through the domestic refiner/marketers. 

A number of other developments have occurred in the petroleum market in concert with the uncertainty surrounding the availability of imported fuel able to meet the new Australian standards.  These included the alliances between a range of supermarkets and domestic refiners/marketers, the closure of the Port Stanvac refinery in South Australia, and forecast tightening of supply in the Asia-Pacific region, including increased demand from China. 

Overall these changes have resulted in increased competition for retail petroleum products, although this has been accompanied by a loss of sales volume by many independents. 
Contrary to earlier concerns expressed by Trafigura in 2003, the ACCC understands that in 2004 the company has been able to source fuel meeting the new Commonwealth standards from China and Taiwan.  However, independent imports in the first half of 2004 (via Trafigura) have been very small, in the region of 2-3% of total sales of petrol in New South Wales.

Trafigura's lease of the Vopak terminal at Port Botany terminates at the end of August 2004.  Vopak has negotiated to lease the 65 000 cubic metres of storage to Shell, which proposes to use it to store imported jet fuel and petrol.  There has been short supply of both these products in the Sydney market in recent times, as demonstrated by the highly publicised shortage of jet fuel in Sydney in September last year.
 
Were the ACCC to oppose the leasing of the 65 000 storage to Shell, it is not clear that the storage capacity would be adequately used by Trafigura, or any other independent importers, given the number of major independent wholesalers and retailers who have entered into supply agreements with domestic refiner/marketers for the next few years.  It is likely, therefore that the terminal capacity would remain largely unused should the current proposal not proceed. 

The ACCC notes that while demand from independent wholesalers and retailers for imported fuel is limited, this may increase in the future as supply contracts come up for re-negotiation and the extent to which  fuel meeting the 2006 Commonwealth standards is available in the Asia-Pacific region becomes clearer.  In this regard the ACCC notes that Vopak is prepared to build more terminal capacity if demand warrants it.

The ACCC also understands there are on-going discussions regarding the availability of the 35 000 cubic metres of storage at Port Botany currently leased to Woolworths.


AGENT'S SELLING SCHEME

ACCC institutes against land agent's selling scheme for misrepresentation of ACCC approval

The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court, Adelaide, against Set Sale Realty Pty Ltd and its director Mr David Pilling for alleged false and misleading representations made about the Pilling System, a real estate property selling system.
Set Sale Realty owns the trademarks 'Set Sale', 'Buyer Enquiry Range' and 'Buyer Ranged' and trades under the name Pilling Systems. Set Sale Realty promotes a real estate property selling system which uses these trademarked terms and has licensing agreements with real estate agents in South Australia, Victoria, New South Wales, the Australian Capital Territory and Tasmania to use the system.

The ACCC alleges that in January 2004 Set Sale Realty sent to its licensee real estate agents an email and attached notice which claimed that the ACCC had approved the Pilling System. The notice was designed to be used by real estate agents in the information kits they provided to prospective vendors.

The ACCC alleges that the representations are false and misleading in breach of sections 52 and 53(c) of the Trade Practices Act 1974 because the Pilling System does not have ACCC approval as claimed.
The ACCC is seeking court orders including: The matter has been listed for a directions hearing in the Federal Court, Adelaide, on 15 September 2004 at 9 a.m.


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