Actrol faces action over refrigerant pricing

AUSTRALIA: Refrigeration wholesaler Actrol Parts Pty is to face court over allegations that it made false or misleading representations related to refrigerant price increases.

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court of Australia alleging that Actrol made false or misleading representations and engaged in misleading or deceptive conduct in contravention of the Australian Consumer Law (ACL).

The ACCC’s allegations relate to representations made by Actrol about the reasons for significant increases in the price of certain HFC refrigerants in July 2012. It alleges that in a letter dated 20 June 2012, sent to its customers and posted on its website, Actrol made a false or misleading representation that the price increases for R134a, R410A, R404A, R407C and R507A were due to changes in input costs and general market conditions.

The ACCC also alleges that the letter impliedly that the price increases were due to an increase in its costs of supplying those types of HFC refrigerant gas and the introduction of the carbon tax scheme.

“The ACCC alleges that prior to the introduction of the carbon tax scheme Actrol was amassing a stockpile of HFC refrigerant gas, and the price increases were implemented by Actrol in order to increase its margins and achieve a significant one off benefit to its earnings,” ACCC chairman Rod Sims said.

Australia’s introduced its controversial carbon tax in July 2012. The amount of tax applied to refrigerants was based upon the refrigerant’s global warming potential, leading to huge price increases amongst some of the higher GWP gases.

When the carbon tax was introduced the ACCC was directed to investigate businesses that engaged in misleading conduct concerning the effect of the carbon tax.

The current Liberal government under Tony Abbott is pledged to repeal the controversial tax in July claiming that the tax introduced by the previous Labour administration is inflicting “plenty of pain, with no environmental gain”.

A report produced at the end of last  year claimed that the tax had reduced greenhouse gas emissions by less than 0.1% (Cooling Post, December 8, 2013).

“This case is a further demonstration of the role of the ACCC in scrutinising claims made by all levels of business in relation to the introduction of the carbon tax, and taking enforcement action where appropriate.  The ACCC will be equally vigilant in monitoring the practices of businesses following the repeal of the carbon tax, to ensure that consumers get the benefit of the repeal as quickly as possible”, Mr Sims said.

The ACCC is seeking pecuniary penalties, declarations, injunctions, publication orders, a compliance programme, and costs.

Actrol was acquired by Australian plumbing-giant Reece in February. Alan Wilson, executive chairman of Reece Australia, told the Cooling Post that Reece was aware of the investigation by the ACCC in relation to the alleged conduct as part of its due diligence on the Actrol Group. He added that the company was considering its position in respect of the proceedings.