Com­pa­nies, Page 19

Re­tail­ers un­der pres­sure as con­sumers tighten their belts

The Star Early Edition - - NEWS - Roy Cokayne

SIX MAN­U­FAC­TUR­ERS and sup­pli­ers of bricks, pavers, in­clud­ing clay and con­crete blocks, have been charged by the Com­pe­ti­tion Com­mis­sion for price-fix­ing and di­vi­sion of mar­kets.

The six charged are Coro­brik, Era Bricks, Es­ton Brick and Tile, De Hoop brick­fields, Clay In­dus­try and Kopano brick­works.

Com­mis­sion com­mu­ni­ca­tions head Sipho Ng­wema said yes­ter­day the charges fol­lowed a probe in April into al­leged con­tra­ven­tions of the Com­pe­ti­tion Act re­lat­ing to price-fix­ing and di­vi­sion of mar­kets in the man­u­fac­tur­ing and sup­ply of bricks, pavers, blocks of clay and con­crete.

Ng­wema said Coro­brik al­legedly en­tered into sep­a­rate bi­lat­eral agree­ments with each of the other five com­pa­nies in terms of which they agreed to di­vide up the mar­ket by al­lo­cat­ing spe­cific prod­ucts and/ or cus­tomers in con­tra­ven­tion of the act.

In ad­di­tion, Coro­brik and Era Bricks al­legedly agreed to fix the prices at which they sold bricks, pavers and blocks, he added.

Ng­wema said Coro­brik and Era Bricks al­legedly also con­cluded a mem­o­ran­dum of agree­ment. In terms of it, they al­legedly agreed Era Bricks would not sup­ply its prod­ucts directly to cus­tomers in com­pe­ti­tion with Coro­brik but in­stead would sell directly to Coro­brik, which would then sell to cus­tomers in the open mar­ket.

Col­lu­sion

The com­mis­sion said they also agreed that Era Bricks would not man­u­fac­ture or sell any bricks other than the types it was man­u­fac­tur­ing and sell­ing to Coro­brik and it would not man­u­fac­ture or sell any com­pet­i­tive prod­uct ca­pa­ble of be­ing used in the brick in­dus­try in sub­sti­tu­tion for bricks.

The com­mis­sion claimed that the com­pa­nies also agreed that in the event that Era Bricks had ex­cess prod­ucts, it would not to sell the ex­cess prod­ucts at prices lower than those charged by Coro­brik.

Ng­wema added that Coro­brik al­legedly also con­cluded sep­a­rate bi­lat­eral dis­trib­u­tor­ship agree­ments in­di­vid­u­ally with Es­ton Brick, Clay In­dus­try, De Hoop and Kopano.

In terms of these, Es­ton Brick, Clay In­dus­try, De Hoop and Kopano al­legedly agreed with Coro­brik that they would not sup­ply their re­spec­tive prod­ucts directly to cus­tomers in com­pe­ti­tion with Coro­brik and in­stead each sup­ply their re­spec­tive prod­ucts to Coro­brik, which would then sell directly to cus­tomers.

The com­mis­sion’s in­ves­ti­ga­tions into the con­struc­tion ma­te­ri­als sec­tor fol­lows it iden­ti­fy­ing the in­fra­struc­ture and con­struc­tion sec­tor in about 2009 as one of four broad pri­or­ity sec­tors in which it would un­der­take proac­tive anal­y­sis of pos­si­ble com­pe­ti­tion-re­lated prob­lems.

This led to the com­mis­sion re­port­ing in June 2013 that 15 firms had agreed to pay fines col­lec­tively to­talling R1.46bn for col­lu­sive ten­der­ing in con­tra­ven­tion of the Com­pe­ti­tion Act.

Then com­mis­sioner Shan Ram­bu­ruth told the par­lia­men­tary port­fo­lio com­mit­tee on trade and in­dus­try in 2009 that price trends of build­ing ma­te­ri­als were much higher than the price of raw com­modi­ties. The com­mis­sion sub­se­quently re­ferred a num­ber of cases to the Com­pe­ti­tion Tri­bunal.

Labour Min­is­ter Mil­dred Oliphant, ANC head of eco­nomic trans­for­ma­tion Enoch Godong­wana and ANC spokesper­son Zizi Kodwa speak of the out­come of their com­mis­sion on the 6th day yes­ter­day of the ANC 5th Na­tional Pol­icy Con­fer­ence held at Nas­rec near Jo­han­nes­burg.

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