Competition Tribunal confirms Cape Gates R40 million settlement in collusion case

7 Jun 2018

PBM

The 10 years old collusion case against Cape Gate, a company that supplies lightly galvanised wire, nails, wire and other various wire products, has been settled after the Competition Tribunal confirmed a R40m settlement.

A statement released by the Tribinal noted that the the company has admitted to price fixing, dividing markets and collusive tendering in a case that involves several other operators. These includes Allens Meshco, Hendok, Wireforce Steelbar, Agriwire, Agriwire North, North, Agriwire Upington, Cape Wire, Forest Wire, Independent Galanising, Associated Wire Industries and CWI.

The case dates back to 2008 after Consolidated Wire Industries, a subsidiary of Scaw South Africa, admitted that its employees participated in price-fixing meetings with their competitors namely. They agreed on a national price list for wire and wire products, on adjustments to the national price list and in collusive tendering of wire rod and wire rod related products of cable armouring wire. CWI applied for leniency.

On September 2009 the Commission concluded its investigations and referred its findings to the Tribunal. It found that respondents had allegedly engaged in directly or indirectly fixing prices and in collusive tendering.

Cape Gate admitted to its involvement in the alleged conduct soon after the referral in 2009 but disputed the quantum of the penalty.

In arguing for the R40 million settlement the Competition Commission said it had taken into consideration Cape Gate’s assistance though litigation “protracted by numerous legal challenges (in relation to this complaint) which have taken the parties through the Courts, including the Supreme Court of Appeal” when determining the penalty.

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