NATIONAL COUNCIL OF PROVINCES
QUESTION FOR WRITTEN REPLY
QUESTION NO.: 319
DATE OF PUBLICATION: 19 AUGUST 2011
Mr K A Sinclair (COPE-NC) to ask the Minister of Economic Development:
Whether his department has identified any specific companies which were
operating in (a) an uncompetitive and (b) a monopolistic manner that was
detrimental to the (i) consumer and (ii) poor in the 2010-11 financial
year; if not, what is the position in this regard; if so, (aa) which
companies have been identified, (bb) what actions have been taken against
such companies and (cc) what are the further relevant details?
CW408E
REPLY
During the 2010/2011 financial year, the Commission initiated 22
investigations against companies with regard to alleged anti-competitive
behaviour.
Many of the investigations are centred on the consumer goods markets. In
particular, 9 of the 22 investigations initiated in the reporting period
were in the Food and Agro-Processing sector, which have a impact on the
poor.
Of the 22 initiations, 14 were cartel cases. The other 8 cases were rule of
reason cases which involved mainly alleged abuse of dominance including one
case involving an alleged restrictive vertical practice and four cases
involving restrictive horizontal practices. The investigations initiated in
other sectors were mainly into alleged cartels.
As may be seen from Table 1 below, the Commission referred eleven
complaints to the Competition Tribunal for prosecution during the financial
year, two of which pertain to complex abuse of dominance allegations and
the remainder to cartels.
Table 1: Cases referred to the Competition Tribunal for adjudication in
2010/11 financial year:
| |Complainant |Respondent(s) |Market/ Sector |
|1 |The Competition|Reinforcing Steel Contractors |Rebar |
| |Commissioner | | |
|2 |The Competition|Reclamation Group, Consol |Manufacturing |
| |Commissioner |(Pty) Ltd; Nampak (Pty) Ltd |âglass |
|3 |Bedford Square |Liberty Group, ERF 179Â |Property |
| |Property |Bedfordview | |
|4 |Desco Agencies |Pentel SA |Stationery |
|5 |The Competition|Sasol Ltd, Safripol (PTY) Ltd,|Polymers |
| |Commissioner |SANS fibres (PTY) Ltd, Hosal | |
| | |Fibres (PTY) Ltd | |
|6 |Parsons |Tyre Manufacturers |Tyre |
|7 |The Competition|Grinaker LTA Giuricich Coastal|Construction |
| |Commissioner |Projects (Parking lot) |Bidrigging |
|8 |The Competition|Lesotho Highlands (Pillings) |Construction |
| |Commissioner | |Bidrigging |
|9 |The Competition|Fritz Pienaar Cycles &Cyclelab|Cycles |
| |Commissioner | | |
|10 |The Competition|SAA Cargo & Others |Fuel |
| |Commissioner | | |
|11 |The Competition|Computicket |Ticketing |
| |Commissioner | | |
Many respondents, particularly those facing allegations of cartel conduct,
have taken advantage of the Commissionâs expressed willingness to settle
complaints. Settlement and consent orders enable the speedy and least
costly resolution of cases. Key to its success in settling this number of
cases has been the Commissionâs policy of rewarding early cooperation by
respondents with it, particularly where this has an impact on expediting
its investigation and subsequent prosecution of remaining respondents.
This policy is reflected in the penalties that have been agreed to between
the Commission and those respondents, as set out in Table 2. The Commission
is also of the view that the consistency of its approach to penalties, both
in terms of the applicable turnover and what it terms the four principles
(the requirements of admission of a contravention particularly in respect
of cartel conduct, cooperation, cessation of the conduct and a compliance
programme), have played a key role in the decision by firms to settle their
cases.
Table 2: Administrative penalties levied in the 2010/11 Financial Year:
|No |Name of Company |Nature of the |Fine |
| | |Conduct | |
|1 |Masana Petroleum Solutions |Price Fixing |R 13,000,000.00 |
|2 |Keystone Milling Company |Price Fixing and |R 6,730,349.00 |
| | |Market Allocation | |
|3 |Zedex Trading 799 |Collusive Tendering|R 40,000.00 |
|4 |Anix Trading 739 |Collusive Tendering|R 20,000.00 |
|5 |Power Metal Recyclers |Price Fixing, |R 12,773,587.55 |
| | |Market Allocation | |
| | |and Restrictive | |
| | |Vertical | |
| | |Arrangements | |
|6 | Cape Concrete Works |Collusion |R 4,371,386.00 |
|7 |Aveng (Africa) t/a Duraset |Dividing Markets |R 21,900,000.00 |
| | |And Collusive | |
| | |Tendering | |
|8 |Rainbow Farms |Minimum Resale |R 1,000,000.00 |
| | |Price Maintenance | |
|9 |Safripol |Price Fixing |R 16,474,573.11 |
|10 |National Scrap Metals |Market Allocation |R 17,730,973.60 |
|11 |Swan Plastics |Price Fixing Market|R 7,649,414.40 |
| | |Allocation and | |
| | |Collusive Tendering| |
|12 |WBHO Construction & Edwin |Failure to Notify |R 1,100,000.00 |
| |Construction |an Intermediate | |
| | |Merger | |
|13 |Amalgamated Scrap Metals |Price Fixing Market|R 3,264,944.60 |
| |Recycling |Allocation and | |
| | |Collusive Tendering| |
|14 |Abbedac Trading |Price Fixing Market|R 4,965,793.70 |
| | |Allocation and | |
| | |Collusive Tendering| |
|15 |Universal Recycling Company|Price Fixing Market|R 18,061,596.75 |
| | |Allocation and | |
| | |Collusive Tendering| |
|16 |Flo-tek Pipes and | Price Fixing |R 5,049,433.26 |
| |Irrigation | | |
|17 |Pioneer Foods |Price Fixing Market|R 500,000,000.00 |
| | |Allocation and | |
| | |Collusive Tendering| |
|18 |Southern Pipelines |Price Fixing Market|R 16,882,597.00 |
| |Contractors Pty Ltd ) |Allocation and | |
| | |Collusive Tendering| |
|19 |Concrite Walls (Pty) Ltd) |Price Fixing Market|R 6,192,457.00 |
| | |Allocation and | |
| | |Collusive Tendering| |
|20 |Liberty Group Limited |Market Allocation |R 18,811,708.55 |
|21 |Foskor |Excessive Pricing |R 6,481,889.65 |
|22 |Sasol Chemical Industries |Price Fixing |R 111,690,000.00 |
| |Limited | | |
| |Total |R 794,190,704.17 |