Top food firms in cartel case probe

THE competition commission yesterday referred a cartel case against Unilever South Africa and Sime Darby Hudson Knight to the competition tribunal for prosecution.

This follows an investigation by the commission which found that Unilever and Sime Darby divided markets by allocating specific types of products and customer goods in the market for the manufacturing and supply of bakery and cooking products throughout South Africa‚ it said in a statement.

The commission is seeking an order from the tribunal declaring that Unilever and Sime Darby contravened a section of the Competition Act as well as an order 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 competition commission‚ and we are determined to root out exploitation of consumers by cartels that are so prevalent in this sector‚” said the commissioner of the competition commission‚ Tembinkosi Bonakele.

Sime Darby settled with the commission in 2016.

The commission’s investigation found that from at least 2004 to 2013‚ Unilever and Sime Darby entered into a sale of business agreement‚ which contained a clause in terms of which they agreed not to compete with each other on certain pack sizes of margarine and edible oils.

In terms of the noncompete clause‚ Unilever and Sime Darby agreed that:

● Unilever would not supply industrial customers with its Flora branded edible oils;

● Sime Darby would not supply industrial customers with margarine pack sizes that were less than 15kg;

● Sime Darby would not supply to the retail sector of the market where Unilever is active;

● Sime Darby would not supply retail customers with its Crispa branded edible oils; and

● Sime Darby would only produce and supply a 25 litre pack size of edible oils‚ which it would supply to industrial customers exclusively. — TMG