A pact that fixed power cable prices crumbles: Association admits guilt

11 May 2018

PBM

The cartel that has been fixing selling prices of electric power cables in South Africa has in effect crumbled after its core organisation admitted guilt and its admission was confirmed by the Competition Tribunal.

The Competition Commission which is prosecuting the case announced the confirmation of an agreement with the Association of Electric Cable Manufacturers South Africa (AECMSA). Members of the association include well known names in a long list that includes Abedare Cables, Tulisa Cables, Alvern Cables and South Ocean Electric Wire Company, Alcon Marepha, CBI-Electric: African Cables, Phoenix Power Cables, Cabcon Technologies, Silcom, Malesela Taihan Electric Cable, Kewberg Cables & Braids and Norco Cables.

Customers affected by the fixing of selling price of electric power cables were primarily Eskom, large industry and municipalities.

The commission claims in its prosecution that all members of AECMSA agreed on input prices or costs in respect of raw material input products necessary for the manufacturing of power cables.  The prices or costs of affected raw materials were: copper; lead; aluminium; SIMAG Redraw Rod; XLPE, Steel tape; polyethylene and non-halogenated compound; fully galvanised wire; PVC cable compound; rubber, neoprene CR sheath, CM sheath, EPM insulation and silicone.

AECMSA has admited that the practice directly or indirectly fixed the selling price of power cables. The association is going to pay an administrative penalty of R14 853.67. This amounts to 1% of AECMSA’s membership fees for 2010, as the association has no turnover.

The Commision noted that AECMA’s decision to settle the complaint referral does not amount to a settlement or a acknowledgement of any contravention of any member of AECMA. Members will decide independently whether to admit or deny the contraventions and whether or not they wish to settle with the Commission.

Some members of the Association have paid administrative penalties with regards to this complaint:

  • Aberdare Cables was granted conditional corporate leniency on 5 March 2012 as part of the investigation into activity undertaken by firms in the sector.
  • Malesela Taihan Electric Cable has paid an administrative penalty of R20.2m,
  • ATC agreed to pay R80.74 million
  •  South Ocean Holdings an R13.3m administrative penalty

This article was lifted from ProBonoMatters, an online platform dedicated to serve public good.

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