Cartel case against cement company dismissed
The Competition Tribunal says NPC had no reason to be part of a market-sharing agreement
The country’s top antitrust tribunal has dismissed a price-fixing and market division case against cement maker Natal Portland Cement Cimpor (NPC) more than a decade after an investigation was launched.
The Competition Commission referred the case to the Competition Tribunal after a probe, which ran from 2008 to 2012, into collusive conduct in the cement industry against NPC and other producers Pretoria Portland Cement (PPC), Lafarge and AfriSam.
The commission later granted PPC conditional immunity, while AfriSam and Lafarge settled and paid fines of R128.8m and R148.7m, respectively.
The commission, which raided the premises of the companies in Gauteng and KwaZulu-Natal in June 2009, alleged that the companies engaged in cartel conduct from 1995 until “at least” 2009.
The commission wanted the tribunal to rule that NPC had contravened the Competition Act and to impose an administrative penalty of 10% of annual turnover. It alleged that the companies had agreed to allocate each producer the market share it had held before 1996 when a lawful cement cartel existed under apartheid.
In its ruling, the tribunal said that while there was “reasonable suspicion” that NPC might have been part of a meeting where cartel arrangements were made, “the facts don’t adequately support such a suspicion”.
“It is common cause that PPC, Lafarge and AfriSam had reached consensus on maintaining market stability according to the international cement rules and that the price war engaged in by the three had hurt them financially.”
The tribunal said NPC had not engaged in a price war. There was no need for the KwaZulu-Natal company to be part of a meeting to resolve the price war by reaching a capacity-based market sharing agreement, it said.
“It was operating at maximum capacity, which it could not increase, and operated mainly, almost exclusively, in southern KwaZulu-Natal, where the others had only a limited presence and where selling cement at competitive prices was challenging because of the transport costs in doing so,” the tribunal said.
PPC, Lafarge and AfriSam had been equal shareholders in NPC until 2002. NPC denied that it had contravened the Competition Act and said it was not liable to pay an administrative penalty. The commission referred the case against NPC to the tribunal for prosecution in 2015.
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