Golden Gaytime have had a hard time getting distributed, a court case claims. Picture: Supplied
Golden Gaytime have had a hard time getting distributed, a court case claims. Picture: Supplied

Why Gaytimes are vanishing from servos

Ever gone looking for a Gaytime, but you just can't find one?

Now we may know why.

Peters, the company that makes Drumsticks, Maxibon, Eskimo Pie and lots of other frozen favourites is in deep trouble. Australia's competition watchdog is dragging them off to Federal Court with maximum speed, charging them with trying to freeze out other ice-cream companies.

The Australian Competition and Consumer Commission (ACCC) accuses Peters of having a contract with a refrigerated trucking company preventing them from distributing competing ice-creams to service stations and convenience stores in some parts of Australia. The biggest sales outlets for single-serve ice creams - think Magnums or Paddle Pops - is servos and convenience outlets.

A big cold truck company called PFD delivers Peters ice creams in Adelaide, in regional areas of Australia and a few other places. Peters had a clause in its contract banning PFD from delivering other companies' ice creams. That meant competitors were locked out.

The ACCC is going after Peters with guns blazing, accusing them of anti-competitive conduct. The fines payable could be $10 million or even more if the ACCC wins.

"Other ice cream suppliers had no commercially viable way of distributing their single serve ice creams to national petrol and convenience retailers," ACCC Chair Rod Sims said.

Which is why sometimes you have to make do with a Maxibon.

The two big players in ice cream in Australia are Peters, maker of the Drumstick, and Streets, maker of Cornetto, Paddle Pops, Magnums, Golden Gaytimes, Bubble-o-Bills, Calippos and splices (I asked Rod Sims what his favourite ice cream is and he told me: Drumstick).

Peters has been accused of barring other companies from being able to distribute their products. Picture: Supplied
Peters has been accused of barring other companies from being able to distribute their products. Picture: Supplied

Streets is owned by Unilever, a massive multinational company worth $US100 billion. Peters is owned by a company called AFG, which is owned by Froneri, a large multinational ice-cream concern, which is half-owned by Nestle, a massive multinational company worth $300 billion.

So what's the difference, you might ask? Why does it matter if Peters bullies Streets?

The answer is: It's not just about the big dogs. According to the ACCC, Bulla ice-cream was trying to get some of its ice-creams into service stations.

Bulla is a family-owned dairy company better known for tubs of cream which is trying to branch out. According to the ACCC's court case, Bulla asked PFD to distribute its ice creams and PFD said it wasn't allowed to because of the Peters contract.

"Bulla could not find another commercially viable way to distribute its Single Serve Ice Cream Products to national Petrol and Convenience Retailers. As such, Bulla did not distribute its Single Serve Ice Cream Products to national Petrol and Convenience Retailers," allege the ACCC court documents.

Peters, by the way, disputes that. They say Bulla could have found some cold trucks if it really tried.

"For many years there have been an extensive number of commercially viable distribution options available for the delivery of ice cream products around Australia to petrol and convenience retailers. It is our position that other manufacturers have not been prevented from supplying their products to retailers by virtue of AFG's distribution arrangements with PFD," said an AFG spokesperson.

Streets 'Cornetto' ice creams are just one of the products that has been in shorter supply in some servos. Picture: Supplied
Streets 'Cornetto' ice creams are just one of the products that has been in shorter supply in some servos. Picture: Supplied

AFG is the name of the company that owns the Peters Ice Cream brand. While claiming they've done nothing wrong, AFG also point out they have since nixed the clauses in the contract that prevented PFD from loading some boxes of Streets Paddle Pops in the back.

The law they are accused of breaking is called "exclusive dealing" which is a way of reducing competition. In a free market economy, competition is the big thing stopping big companies from absolutely screwing us on price and quality. That is why the ACCC's role in protecting competition is so important.

"I want companies competing on their merits. On the basis of the quality of their ice creams, and the price of their ice creams. I don't want them competing by blocking their competitors," said Mr Sims.

So if you've ever thought the price of ice creams in service stations was a bit high, or that the chocolate on the outside of them is getting a bit thin, this court case is for you.

Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.


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