The Competition Tribunal will hear from these companies: Baxter International, RTT, Group Five and Progress Milling

27 Jun 2018

PBM

The Competition Tribunal is set to hear a number of cases this week including an appearance for settlement by Baxter International in relation to the fixing of an Eskom tender, Progress Milling which us admitting to price fixing and dividing markets and Group Five which seeks immunity for price fixing in 15 projects. There is also the case of RTT Group which has agreed to pay a settlement for its failure to comply with conditions placed on mergers involving warehouse and courier service companies, Warehouseit and Courierit.

Here follows the cases.

Baxter International appears for settlement relating to Eskom tender 

A settlement for collusion in respect of an Eskom issued tender will be considered by the Competition Tribunal with regard to Baxter International Movers.

Baxter International Movers and JH Retief Transport are alleged to have engaged in price fixing, dividing of markets and collusive tendering in connection with a tender issued in 2008.  Baxter has agreed to pay an administrative penalty of R24 506.64 and has admitted it engaged in one instance of cover pricing.

In terms of the Commission’s complaint, Baxter had requested JH Retief submit a cover price for R8 500 and Baxter submitted a tender price of R7 600.

JH Retief has paid a R4,3m penalty (R4 273 060.80) for 3487 instances of collusion emerging from an investigation by the Commission into the furniture removal market launched in November 2010.

Fines issued for contraventions uncovered during the same investigation are:

  • Cape Express Removals (1774 instances) R645 710 (10% turnover)
  • Pro Rack Removals (548 instances) R454 127.60 (10% turnover)
  • Core Relocations (44) R211 750.66 (9% turnover)

Progress Milling admits to price fixing and dividing markets – Tribunal to hear

Progress Milling has admitted to engaging in price fixing in the white maize product market between 1999 and 2007 and has agreed to a settlement of R2 120 000. Unlike the other respondents who have settled Progress Milling also admits to dividing markets and allocation of customers.

The Tribunal is to consider the settlement.

In March 2007, the Commission initiated a complaint against Tiger Brands, Pioneer Foods, Foodcorp, Pride Milling and Progress Milling. The initiation was later amended to include other players in the milling industry including Blinkwater Mills and Godrich Mills, TWK Milling, Keystone Milling, Westra Milling, Carolina Rollermeule Mills, Brenner Mills, Paramount Mills, NTK Milling, and Bothaville Milling.

The investigation was extended after the Commission received a corporate leniency application from Premier Foods in 2007, which was corroborated by a further leniency application filed by Tiger Brands in the same year.

The following respondents have concluded settlement agreements in which they admit to fixing the price of milled white maize products and they dates when they would be implemented:

  • Pioneer Foods paid an administrative penalty of R500 000 000
  • Brenner Mills was fined R12 000 872
  • Pride Milling paid an administrative penalty R10 624 959
  • Blinkwater paid R10 112 504.20
  • Keystone Milling paid R6 730 349
  • Carolina Rollermeule agreed to pay R4 417 546
  • Bothaville Milling paid R4 211 385.90
  • Godrich Mills paid R4 354 467

Tiger Brands Limited and Premier Foods (Pty) Ltd are leniency applicants.

Group Five applies for immunity for 15 construction projects 

The Tribunal is to consider a settlement agreement in terms of which construction company Group Five would receive immunity for cooperating with the Commission’s investigation into the construction industry and disclosing its participation in 15 construction projects.

On 10 February 2009 the Commission initiated a complaint into alleged collusive conduct in the construction of the 2010 Fifa World Cup stadia. In September 2009, following applications for immunity, the Commission initiated a complaint with regards to price fixing, market allocation and collusive tendering conduct in respect of construction projects.

On 1 February 2011 the Commission invited companies to take part in the Construction Fast Track Settlement Process. Fifteen construction companies paid settlements amounting to R1 463 814 392. The Commission encouraged firms to apply for leniency in terms of its Corporate Leniency Policy.

Group Five disclosed its participation in the following projects for which it has been given immunity:

  1. Durban International Convention Centre
  2. N17 Link Road to Soweto
  3. Northern Waste Water Treatment Works
  4. R102 to New Airport
  5. Main Road 577
  6. Renault Motor Company
  7. Dwaalboom Cement Works Pre-Heated Tower
  8. Green Point Stadium in Cape Town
  9. Olifantspoort Water
  10. Anglo Platinum Housing Project
  11. Khangela Bridge
  12. Bogoso Gold Mine
  13. Rio Tinto QMM Minerals
  14. Sappi Amakhulu
  15. Gauteng Freeway Improvement Project

RTT Group to pay settlement for failure to comply with merger conditions

Logistics company RTT Group has agreed to pay a settlement for its failure to comply with conditions placed on mergers involving warehouse and courier service companies, Warehouseit and Courierit. The Tribunal is to hear the matter tomorrow, 26 June 2018.

The acquisition by RTT Group of a majority stake in Warehouseit and Courierit was approved by the Tribunal on 25 September 2015 with conditions relating to public interest concerns.

In terms of the conditions, a two year moratorium was placed on merger related job losses and Courierit would continue to use its subcontractors on terms and conditions no less favourable for 5 years after confirmation of the merger. The Commission was concerned that Courierit sub-contractors would lose their subcontracts post-merger as a result of RTT’s ability and intention to self-provide the services offered by Courierit sub-contractors pre-merger.

The merging parties were meant to inform employees and third party contractors of the conditions in a specified time and then provide an affidavit to the Commission of their compliance. The merging parties failed to do so.

The Tribunal is to consider a settlement agreement of R75000.

A variation order is also to be considered whereby a condition involving subcontracts be amended to read that “Courierit shall continue to use the services of a sub-contractor on the affected routes and on the same basis that prevailed before the merger, provided that this condition will not preclude Courierit from using the services of historically disadvantaged persons, referred to in section 3(2) fo the Competition Act….”

info@probonomatters.co.za

 

Leave a Reply

Your email address will not be published. Required fields are marked *