Cartel drives up imported car costs
This year, South Africans became aware that they were probably paying more for imported cars than they should be paying because of a cartel in the shipping industry.
This was after the Competition Commission began to crack the whip and began an investigation.
This week, the commission said it believed the cartel activity might be greater than it initially considered.
The cartel was thought to be operating in the markets for shipping cars, equipment and machinery to and from South Africa.
The commission’s legal team voiced its concerns this week as it secured approval by the Competition Tribunal for a settlement with one of the foreign shipping companies.
It said it was reluctant to discuss the investigation further with the tribunal as it was an ongoing probe.
The legal team told the tribunal: “The commission is curious now. We are paying attention because there could be wider implications for the shipping industry. We think there were bigger companies involved in the prohibited practices.”
This week, shipping company Compañía Sudamericana de Vapores settled one instance of a prohibited practice with the commission and agreed to pay a fine of more than R8.8 million.
This involved collusion on a tender for General Motors in which cars were shipped from South Korea to South Africa in 2009.
There are two outstanding cases the commission is investigating. They involve tenders for Volkswagen and Ford.
If these two cases are not settled, they could be referred to the tribunal for prosecution
The legal team told the tribunal this week that Compañía Sudamericana de Vapores was not in possession of any information that would persuade the team to settle the two cases.
The settlement agreement before the tribunal this week states that the commission believes the cartel operated between 1999 and 2012.
The commission case against nine international shipping companies was initiated in September 2012.
The nine companies include Japanese firms Mitsui OSK Lines, Nippon Yusen Kabushiki Kaisha and Kawasaki Kisen Kaisha; Chilean concern Compañía Sudamericana de Vapores; Norwegian companies Höegh Autoliners and Wallenius Wilhelmsen Logistics; and South Korean-based Eukor Car Carriers. They are being investigated for price fixing, market division and collusive tendering for the transportation of vehicles, equipment and machinery by sea to and from South Africa. Tenders that the commission alleges were colluded upon were for customers Toyota Motor Corporation, Toyota SA Motors, Volkswagen, Volkswagen SA, Nissan Motor Corporation, Daihatsu Motor, Honda Motor Company, BMW SA, Auto Alliance, Volvo Construction Equipment, Ford Motor Company of Southern Africa, General Motors and the Mitsubishi Motor Corporation.
In August this year the Competition Tribunal heard two settlement agreements involving Wallenius Wilhelmsen Logistics and Nippon Yusen Kabushiki Kaisha.
Wallenius Wilhelmsen Logistics admitted to 11 instances of engaging in prohibited practices and agreed to pay a fine of R95.69 million.
Nippon Yusen Kabushiki Kaisha admitted to 14 instances of engaging in prohibited practices and agreed to pay a fine of R103.97 million.