OUTCOME OF CASES HEARD BY THE TRIBUNAL - 28 JULY 2020
| Type of matter | Parties involved | Commission’s recommendation to the Tribunal | Tribunal Decision |
| Consent agreement | Competition Commission And Cambridge Food (Pty) Ltd | Confirm as an order of the Tribunal | Confirmed |
| Consent agreement | Competition Commission And Sumitomo Electric Industries Ltd
| Confirm as an order of the Tribunal | Confirmed |
| Large merger | KLK Landbou Ltd And Carpe Diem Raisins (Pty) Ltd
| Approve without conditions | Approved without conditions |
Tribunal confirms consent agreement between Commission, Cambridge Food for alleged maize meal excessive pricing during Covid-19
The Tribunal has confirmed a consent agreement between the Competition Commission (the Commission) and Cambridge Food (Pty) Ltd (Cambridge Food) relating to alleged excessive pricing of maize meal in the context of Covid-19.
The Commission found that Cambridge Food Jozini (a division of Cambridge Food in Kwa-Zulu Natal) charged an excessive price for 25kg Top White Super Maize Meal during April 2020, in contravention of section 8(1)(a) of the Competition Act (the Act) read together with Regulation 4 of the Consumer Protection Regulations (the Regulations).
Maize meal falls under the category of “basic food and consumer items” in the Consumer Protection Regulations.
Cambridge Food neither admits to having contravened the Act or the Regulations, nor admits that its conduct constitutes excessive pricing. However, it agrees to resolve the complaint to avoid protracted litigation and costs. In terms of the consent agreement, Cambridge Food agrees, among others, to:
- ensure, with immediate effect and for the duration of the state of national disaster, that its gross profit margin on 25kg Top White Super Maize Meal does not exceed a specified percentage;
- donate essential goods worth R24 947.00 (twenty four thousand nine hundred and forty seven Rand) to the Siyaphambili Qondile Home Based Care Project. This amount is based on, among others, the additional income derived by Cambridge Food as a result of the significant increase in margins in April 2020;
- develop and implement a competition law compliance programme; and
- circulate a statement summarising the content of the consent agreement to all senior management and senior operational staff employed at Cambridge Food.
Background
In April 2020, the Commission received information relating to alleged excessive prices charged by Cambridge Food for, among others, 25kg Top White Super Maize Meal.
Based on pricing and cost information supplied by Cambridge Food Jozini, the Commission found that between 22-29 April 2020, Cambridge Food Jozini increased the maize meal price from R129.99 to R159.99 without a corresponding increase in cost.
Cambridge Food Jozini is a grocery supermarket which focuses on providing basic food and consumer items to a variety of consumers including lower income earners.
The Commission concludes that the conduct by Cambridge Food, at its Jozini store, of escalating its price and gross profit margins without corresponding increases in costs is a contravention of the Act read together with the Regulations.
Consent agreements
The factors that the Tribunal considers in consent agreement matters include the level of cooperation by the firm in question with the competition authorities as well as how timely it has settled the complaint against it.
The Tribunal took these factors into account when considering the consent agreement between the Commission and Cambridge.
Tribunal confirms settlement between Commission and Japanese company accused of cartel conduct in relation to Toyota parts
The Tribunal has confirmed a consent agreement between the Commission and Sumitomo Electric Industries Ltd (SEI), a Japanese company accused of price fixing, market division and tender collusion in relation to Toyota parts used in vehicles sold in South Africa.
In terms of the consent agreement, SEI has agreed to, among others:
- pay an administrative penalty of R437 278.38 (four hundred and thirty seven thousand, two hundred and seventy eight Rand and thirty eight cents);
- refrain from any conduct/prohibited practice in contravention of the Act in future;
- implement and monitor a competition law compliance programme; and
- circulate a statement summarising the contents of the consent agreement to its managers and directors.
BACKGROUND
The Commission investigated two complaints of cartel conduct against SEI:
First complaint
In December 2014, the Commission launched an investigation against SEI and another Japanese company, Denso Corporation (Denso) for allegedly fixing prices, dividing markets and collusive tendering in relation to the manufacture and supply of heater control panels (HCP’s) used in motor vehicles in contravention of section 4(1)(b)(i), (ii) and (iii) of the Act.
The Commission’s investigation found that around 2007, SEI and Denso met and/or held telephonic conversations to set the prices which they would submit in response to a Request For Quotes (RFQ) issued by Toyota in respect of HCP’s for the 2009 Toyota Prado 611L.
Second complaint
In February 2015, the Commission again launched an investigation against SEI and Denso in relation to the manufacture and supply of body electronic control units (body ECU’s). This investigation also related to alleged price fixing, market division and collusive tendering in contravention of section 4(1)(b)(i), (ii), and (iii) of the Act.
The investigation found that SEI and Denso had colluded to set the prices when responding to the RFQ issued by Toyota in respect of the standard body ECU’s for the 2009 Toyota Prius, 2010 Toyota Verso, 2010 Toyota Auris and 2011 Toyota Yaris.
According to the consent agreement, bidding processes typically entail the issue of the RFQ some three years prior to production of a vehicle. The affected automotive models were sold in South Africa as follows:
- Toyota Prado 2010 to 2013;
- Prius 2009 to 2015;
- Yaris 2011 to 2014;
- Verso from 2010 to 2014; and
- Auris from 2010 to 2012.
Tribunal approves merger: KLK Landbou & Carpe Diem Raisins
The Tribunal has approved, without conditions, the proposed transaction whereby KLK Landbou Ltd (KLK) intends to acquire additional issued share capital of Carpe Diem Raisins (Pty) Ltd (Carpe Diem). Post-merger, KLK will have sole control of Carpe Diem.
KLK is controlled by Senwes Ltd. Senwes controls numerous firms. KLK and Senwes (and all the firms they control) are the acquiring group. The acquiring group is involved in numerous activities including the supply of agricultural trade sites, building supplies and the processing and packaging of raisins through Carpe Diem.
Carpe Diem is jointly controlled by KLK and van der Colff Beleggings (Pty) Ltd. Carpe Diem purchases and processes raisins which it then sells locally or exports.
The Commission, which assesses large mergers before referring them to the Tribunal for a decision, concluded that the merger is unlikely to result in a substantial lessening of competition in any South African market. In addition, the Commission concluded that the proposed transaction is unlikely to result in job losses or raise any other public interest concerns.
Issued by:
Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib
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