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Warning! Private companies to pay harsh penalties for price fixing

The Competition Commission says an investigation found that from 2002 to 2013 Kawasaki K-line colluded on a tender issued by Toyota SA.

The logo of Kawasaki K-line. Picture: Supplied.

JOHANNESBURG – The Competition Commission has warned private companies found to be colluding that they will face harsh penalties.

The commission on Monday announced a Japanese company - Kawasaki K-line - is guilty of price fixing, market division and collusive tendering involving the transportation of Toyota vehicles from South Africa to other countries by sea.

The Competition Commission' says the investigation found that from 2002 to 2013 K-line colluded on a tender issued by Toyota South Africa.

The commission’s Makgale Mohlala says in 2015 NYK and WWL admitted to colluding on the tender and settled the matter, paying administrative penalties of almost R104 million and another of just a little more than R95 million, respectively.

He says the commission has concluded this tender foul play but there are more investigations of a similar nature underway.

“The investigation is big, there’s a number of tenders. That tender we referred to is one of those many tenders that we’re looking at.”

Mohlala says the commission believes the hefty penalties will be a good deterrent.

MORE COMPANIES TO FOLLOW

The commission says a Japanese company found guilty of price fixing and market division involving a Toyota South Africa tender is only the tip of the iceberg into a massive investigation of collusion in the industry.

Mohlala says the companies involved form part of a bigger investigation.

“Some of them are those that are there in the statement, NYK, WWL and K-Line. So and then there are others that it’s only fair to mention their names when we refer the matter.”

He says it’s important to ensure that there are harsh consequences for companies found to be colluding.

“Ultimately consumers stand to pay more in circumstances where if the costs of shipping were not exorbitant, they were going to pay less.”

The commission has asked the tribunal to fine Kawasaki K-Line 10% penalty of its annual administrative turn over.

UNILEVER SCANDAL

Last week, the commission recommended a fine equivalent to 10% of Unilever’s local turnover for price fixing of edible oils and margarine.

The Competition Commission said it had completed an investigation which began in 2014 when it raided the local units of Unilever Plc and Sime Darby Bhd because it suspected price fixing.

It found that between 2004 and 2013, the two companies had an agreement not to compete with each other on certain pack sizes of margarine and edible oils.

Sime Darby, the world’s top palm oil planter, settled with the Commission last year, the Commission said in a statement.

“Food and agro-processing is an important focus area for the Competition Commission, and we are determined to root out exploitation of consumers by cartels that are so prevalent in this sector,” the Commission’s head Tembinkosi Bonakele said in a statement.

Unilever’s South African unit declined to comment. Unilever does not report local turnover figures.

The Commission has handed the findings of the probe along with a recommendation for a penalty to the Competition Tribunal, which holds hearings on the antitrust matters before giving the final ruling.

(Edited by Leeto M Khoza)

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