CDPP v Alkaloids of Australia

Facts and summary

On 1 December 2020 criminal cartel charges were been laid against pharmaceutical ingredient company, Alkaloids of Australia Pty Ltd, and its former export manager, Christopher Kenneth Joyce. Each were been charged with 33 criminal offences.

The ACCC alleges Alkaloids of Australia and overseas suppliers of the ingredient SNBB (hyoscine butylbromide) ‘made and gave effect to arrangements to fix prices, restrict supply, allocate customers and/or geographical markets, and/or to rig bids for the supply of SNBB to international manufacturers of generic antispasmodic medications’ over a period of almost 10 years.

The matter will be prosecuted by the Commonwealth Director of Public Prosecutions and was first listed in the Downing Centre Local Court for 19 January 2021.

On 26 October 2021 Christopher Kenneth Joyce pleaded guilty to criminal cartel conduct and was committed to the Federal Court of Australia for sentence. Joyce was convicted and sentenced to 32 months imprisonment (to be served by way of intensive correction in the community), a fine of $50,000 and disqualification from managing corporations until 29 November 2027.

In November 2021 Alkaloids of Australia pleaded guilty to cartel conduct. They were convicted and fined a total of AU$1,887,500.

ACCC media release

Criminal cartel charges laid against pharmaceutical ingredient company and its former export manager

1 December 2020

Alkaloids of Australia Pty Ltd and its former export manager, Christopher Kenneth Joyce, have each been charged with 33 criminal cartel offences, contrary to the Competition and Consumer Act 2010, formerly the Trade Practices Act 1974, following a criminal investigation by the ACCC.

The matters will be prosecuted by the Commonwealth Director of Public Prosecutions (CDPP).

Alkaloids of Australia produces and supplies the active pharmaceutical ingredient SNBB (scopolamine N-butylbromide, also known as hyoscine butylbromide), which is the active pharmaceutical ingredient in antispasmodic medications taken to relieve stomach pain and bowel cramps.

The ACCC alleges that Alkaloids of Australia and other overseas suppliers of SNBB made and gave effect to arrangements to fix prices, restrict supply, allocate customers and/or geographical markets, and/or to rig bids for the supply of SNBB to international manufacturers of generic antispasmodic medications.

The allegations extend over a period of almost 10 years, beginning on 24 July 2009, when criminal cartel laws came into force in Australia.

“Cartel conduct, such as price fixing, market and customer allocation, and bid rigging, is a very serious breach of the law,” ACCC Chair Rod Sims said.

“The specific purpose of most cartels is to increase the profits of the cartel members by agreeing to act together instead of competing with each other.”

“We are committed to pursuing cartel conduct allegations, in order to protect businesses and consumers from the economic harm of such conduct,” Mr Sims said.

The matter is listed in the Downing Centre Local Court on 19 January 2021.

Background

Alkaloids of Australia is a company which produces active pharmaceutical ingredients, based in Queensland and NSW.

SNBB is manufactured from the Duboisia plant, which is native to Australia. Duboisia plants are grown commercially for the pharmaceutical industry in and around Kingaroy in Queensland. SNBB is produced in Australia and exported for use in antispasmodic medications. The medications are then imported into Australia as a final product.

Note to editors

The ACCC investigates cartel conduct, manages the immunity process and, in respect of civil cartel contraventions, takes proceedings in the Federal Court.

The CDPP is responsible for prosecuting criminal cartel offences in accordance with the Prosecution Policy of the Commonwealth. The ACCC refers serious cartel conduct to the CDPP for consideration of prosecution in accordance with the Memorandum of Understanding between the CDPP and the ACCC regarding Serious Cartel Conduct.

For corporations, the maximum fine for each criminal cartel offence is the greater of:

• $10 million

• three times the total benefits that have been obtained and are reasonably attributable to the commission of the offence, or

• if the total value of the benefits cannot be determined, 10 per cent of the corporation’s annual turnover connected with Australia.

An individual convicted of a criminal cartel offence may be sentenced to up to 10 years’ imprisonment or fined up to $420,000, or both. 

Local Court

Alkaloids of Australia Pty Ltd

In November 2021 Alkaloids of Australia Pty Ltd has pleaded guilty to three charges of criminal cartel conduct and has admitted a further seven offences. The conduct involved price fixing, bid rigging and market allocation arrangements with overseas pharmaceutical ingredient suppliers.

View ACCC media release.

Christopher Joyce

Christopher Joyce pleaded guilty on 26 October 2021 and was committed to the Federal Court of Australia for sentencing.

ACCC media release

26 October 2021

Christopher Kenneth Joyce, the former export manager of pharmaceutical ingredient company Alkaloids of Australia Pty Ltd, has today pleaded guilty to criminal cartel conduct in Sydney’s Downing Centre Local Court.

Following an ACCC investigation and referral to the Commonwealth Director of Public Prosecutions (CDPP), on 1 December 2020 Alkaloids of Australia and Christopher Joyce were charged with criminal cartel offences under the Competition and Consumer Act, formerly called the Trade Practices Act.

Alkaloids of Australia produces and supplies SNBB (scopolamine N-butylbromide), which is an active pharmaceutical ingredient in antispasmodic medications.

Earlier today, Christopher Joyce pleaded guilty to three charges, and admitted his guilt in respect of seven further offences, relating to his conduct involving price fixing, bid rigging and market allocation cartel arrangements between Alkaloids of Australia and other overseas SNBB suppliers.

The price fixing charges to which Christopher Joyce has pleaded guilty extend over a period of about eight years from July 2009, when criminal cartel laws came into force in Australia.

“This is the first guilty plea by an individual to criminal cartel conduct under the criminal cartel laws,” ACCC Chair Rod Sims said.

Christopher Joyce has been committed to the Federal Court of Australia for sentence, and the matter is next listed for a case management hearing on 10 November 2021.

The proceedings against Alkaloids of Australia are continuing.

Alkaloids of Australia is yet to enter pleas to the criminal cartel charges it is facing. That matter is listed in the Downing Centre Local Court on 9 November 2021.

As these matters are currently before the court, the ACCC will not be providing further comment at this time.

Background

Alkaloids of Australia is a company which produces active pharmaceutical ingredients, based in Queensland and NSW.

SNBB (scopolamine N-butylbromide, also known as hyoscine butylbromide) is the active pharmaceutical ingredient in antispasmodic medications taken to relieve stomach pain and bowel cramps.

SNBB is manufactured from the Duboisia plant, which is native to Australia. Duboisia plants are grown commercially in and around Kingaroy in Queensland for the pharmaceutical industry.

SNBB is produced in Australia and the medications are then imported into Australia as a final product.

Note to editors

The ACCC investigates cartel conduct, manages the immunity process and, in respect of civil cartel contraventions, takes proceedings in the Federal Court.

The CDPP is responsible for prosecuting criminal cartel offences in accordance with the Prosecution Policy of the Commonwealth. The ACCC refers serious cartel conduct to the CDPP for consideration of prosecution in accordance with the Memorandum of Understanding between the CDPP and the ACCC regarding Serious Cartel Conduct.

An individual convicted of a criminal cartel offence may be sentenced to up to 10 years’ imprisonment or fined up to $444,000, or both.

Anyone with information about cartel conduct is urged to call the ACCC Cartel Hotline on (02) 9230 3894.

Release number:

164/21