Firms re­ferred over deal to col­lude

Cape Times - - NEWS - Do­minic Adri­aanse

TWO lo­cal poul­try feed­ing equip­ment man­u­fac­tur­ers have been re­ferred to the Com­pe­ti­tion Tri­bunal for pros­e­cu­tion by the Com­pe­ti­tion Com­mis­sion, for en­ter­ing into a col­lu­sive agree­ment.

The com­pa­nies, Tech­ni­cal Sys­tems (Pty) Ltd and CGC In­dus­tries (Pty) Ltd, trad­ing as RTS In­dus­tries (Pty) Ltd (RTS), which sup­ply flat wire, augers and coil­ing ma­chin­ery to the global poul­try feed­ing mar­kets, face charges re­lat­ing to divi­sion of mar­kets by al­lo­cat­ing ter­ri­to­ries, af­ter agree­ing that RTS would exit the mar­ket.

The Com­pe­ti­tion Com­mis­sion’s in­ves­ti­ga­tion de­ter­mined that the two firms’ con­duct had con­tra­vened the Com­pe­ti­tion Act.

The com­mis­sion’s spokesper­son, Sipho Ng­wema, said that af­ter re­sign­ing from Tech­ni­cal Sys­tems’ em­ploy, the owner of RTS In­dus­tries had signed a three-year re­straint of trade agree­ment.

“But he formed RTS and started di­rectly com­pet­ing with Tech­ni­cal Sys­tems, which was in breach of the re­straint of trade agree­ment.

‘‘In 2014, Tech­ni­cal Sys­tems sued RTS and its owner for breach­ing the agree­ment, and in June 2015 reached a set­tle­ment be­fore the West­ern Cape High Court, in terms of which RTS was pro­hib­ited from en­ter­ing the mar­ket for­ever,” he said.

Tech­ni­cal Sys­tems’ deal stated that RTS would never be al­lowed to en­ter the mar­ket with­out their ap­proval.

Ng­wema said that their in­ves­ti­ga­tion es­tab­lished that the set­tle­ment agree­ment ran in per­pe­tu­ity, and was in con­tra­ven­tion of the Com­pe­ti­tion Act.

“This also goes against the cor­po­rate le­niency pol­icy, which is aimed at erad­i­cat­ing car­tel ac­tiv­ity, as it harms the econ­omy at large,” he said.

Ng­wema said the com­mis­sion was not seek­ing a penalty against RTS, who were as­sist­ing with the pros­e­cu­tion of Tech­ni­cal Sys­tems.

No re­sponse had been re­ceived from the head of Tech­ni­cal Sys­tems or his rep­re­sen­ta­tive by dead­line.

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