Tribunal to hear excessive pricing case against Sasol
COMPETITION Tribunal will from today hear a case that Sasol is charging excessive prices for propylene and for polypropylene in the domestic market.
Brought by the Competition Commission, the case centres around the cost of propylene, the primary input in the manufacture of polypropylene. Polypropylene is a polymer used by plastics converters to produce a wide range of plastic products such as food packaging, household products, plastic pipes in construction and car parts in the automotive industry.
In a statement issued by the Tribunal on Friday, it explained that the Commission alleges that Sasol is charging excessive prices to the detriment of consumers and has requested the Tribunal to impose a penalty of 10% of Sasol’s 2009 turnover for the alleged contraventions.
“This case arises out of the Commission’s 2007 investigation, against Sasol and Safripol, in which it found that both parties had colluded to indirectly fix the price of polypropylene and that Sasol had charged excessive prices for propylene and polypropylene.” it read.
The Commission referred the case to the Tribunal in August 2010. Since that time both Sasol and Safripol have settled with the Commission on the collusion aspect of the case, paying penalties of R16.5 million and R111 million respectively. However, Sasol has denied the excessive pricing allegations and intends to defend its pricing policies in next week’s hearing before the Tribunal.
The hearing is expected to take four weeks and the Tribunal will hear evidence from 16 witnesses.
In a separate statement, the Department of Trade and Industry (DTI) welcomed the hearing, saying it “believes an important precedent can be established that low costs of production of intermediate industrial products should translate into low priced inputs for downstream and labour absorbing industries”.
“The competitiveness of local manufacturers in these relatively labour-intensive activities is dependent on competitively priced input materials. SA is the world leader in coal-based synthesis and gas-to-liquid technologies, of which propylene feedstock is a by-product.
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