Unilever in cooking oil fix scandal

THE Competition Commission referred a cartel case against Unilever South Africa and Sime Darby Hudson Knight to the Competition Tribunal for prosecution yesterday.

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 for the manufacturing and supply of bakery and cooking products throughout South Africa.

The commission is seeking an order from the Competition 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‚” the commissioner of the Competition Commission‚ Tembinkosi Bonakele, said. Sime Darby settled with the commission last year. 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. 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 was active.

Sime Darby would not supply retail customers with its Crispa-branded edible oils.

Sime Darby would only produce and supply a 25-litre pack size of edible oils‚ supplied exclusively to industrial customers. – TMG Digital