Unilever faces fine over cartel conduct

The Competition Commission has charged Unilever SA for cartel conduct, referring a cartel case against the group and Malaysian firm Sime Darby Hudson Knight for prosecution to the Competition Tribunal.

An earlier investigation by the commission had found that Unilever SA, which is partly owned by Remgro, and Sime Darby had divided markets by allocating the manufacturing and supply of bakery and cooking products throughout the country. Sime Darby settled with the commission in 2016.

The Boksburg-based company was to pay a R35m fine for anticompetitive behaviour and invest an additional R135m in a new packaging and warehousing facility.

But now the commission is seeking an order from the Competition Tribunal declaring that Unilever and Sime Darby contravened section 4(1)(b)(ii) of the Competition Act. This includes declaring Unilever liable for payment of an administrative penalty equal to 10% of its annual turnover.

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

The commission’s investigation found that from at least 2004 to 2013 Unilever and Sime Darby had entered into a “sale of business agreement” whereby they agreed not to compete with each other in certain pack sizes of margarine and edible oils.