AW Tyree Transformers Pty Ltd and Wilson Transformers Co P/L

The applicants sought authorisation of a joint marketing agreement which they claimed was a competitive response to changes in electricity supply industry

• AW Tyree supplied distribution transformers
• Wilson produced power transformers and specialised distribution transformers
• There are four ranges of distribution transformers
• Tyree produces mainly sub 100 kVA products
• Wilson produces mainly above 100 kVA products
• Changes to industry were forcing electricity utilities to implement cost reduction strategies

The joint marketing agreement was entered into so parties could jointly tender to utility customers – the agreement set out when joint bids could be made:

• If tender indicates preference for single supplier
• If utility expresses positive interest in joint bid

When no joint bid, the companies would operate separately.  Authorisation was sought.

• Noted the applicants currently compete in respect of only a limited range. The joint venture will predominantly affect range B transformers and is limited to where range B is linked to range A or range C and where tender indicates it will assess tenders on preference for single supplier. Where a tender is for range B only, A’s will compete

• The JV has no significant anti-competitive effect because of (1) the number and size of existing competitors that would provide the parties with significant competition; (2) the threat of imports due to falling tariffs; (2) the countervailing power of utilities and (4) evidence that demand is falling

• In fact, the JV is pro-competitive because it provides an additional market participant able to singularly provide full range of transformers … where this is demanded