COMPETITION TRIBUNAL REPUBLIC OF SOUTH AFRICA
Case No: CO141Dec24
In the matter between:
The Competition Commission Applicant
And
Vermont Sales (Pty) Ltd Respondent
Panel: AW Wessels (Presiding Member)
A Ndoni (Tribunal Member)
G Budlender (Tribunal Member)
Heard on: 04 March 2025
Decided on: 04 March 2025
CONSENT AGREEMENT
The Tribunal hereby confirms the consent agreement concluded between the
Competition Commission and Vermont Sales (Pty) Ltd annexed hereto.
Presiding Member 04 March 2025
Mr Andreas Wessels Date
Concurring: Ms Andiswa Ndoni and Adv. Geoff Budlender SC
IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD AT PRETORIA)
CT CASE NUMBER:
CC CASE NUMBER: 2023Jul0001
In the matter between:
THE COMPETITION COMMISSION OF SOUTH AFRICA Applicant
And
VERMONT SALES (PTY) LTD Respondent
CONSENT AGREEMENT IN TERMS OF SECTION 49D AS READ WITH
SECTIONS 58(1)(a)(iii) AND 58(1)(b) OF THE COMPETITION ACT, 89 OF 1998 1
AS AMENDED, BETWEEN THE COMPETITION COMMISSION AND VERMONT
SALES (PTY) LTD IN RESPECT OF ALLEGED CONTRAVENTIONS OF SECTION
5(2), OF THE COMPETITION ACT, 1998, AS AMENDED
PREAMBLE
The Competition Commission and Vermont Sales (Pty) Ltd hereby agree that
application be made to the Competition Tribunal for the confirmation of this
Consent Agreement as an order of the Tribunal in terms of section 49D read with
section 58(1)(a)(iii) and 58(1)(b) of the Competition Act No. 89 of 1998, as
amended in respect of alleged contraventions of section 5(2) of the Act.
1. DEFINITIONS
For the purposes of this Consent Agreement, the following definitions shall apply:
1.1. "Act" means the Competition Act, No. 89 of 1998, as amended.
1.2. "Commission" means the Competition Commission of South Africa, a
statutory body established in terms of section 19 of the Act, with its principal
place of business at Mulayo Building (Block C), the DTI Campus, 77 Meintjies
Street, Sunnyside, Pretoria, Gauteng.
1.3. "Commissioner" means the Commissioner of the Commission,
appointed in terms of section 22(1) of the Act.
1.4. "Complaint" means the complaint which was initiated by the
Commissioner on 13 June 2023 against the Respondent in terms of Section
498(1) of the Act for an alleged contravention of section 5(2) of the Act.
1.5. "Confirmation Date" means the date of confirmation of the Consent
Agreement as an order of the Tribunal.
1.6. "Consent Agreement" means this agreement duly signed and
concluded between the Commission and Respondent.
1.7 “Festool" means the premium brand of power tools and accessories
distributed by the Respondent in South Africa.
1.8. “Parties" means the Commission and the Respondent.
1.9. "Respondent" means Vermont Sales (Pty) Ltd, a company duly
registered in accordance with the laws of the Republic of South Africa, with its
principal place of business at 192 Tsessebe Crescent, Corporate Park South,
Old Pretoria Rd, Randjespark, Midrand, South Africa.
1.10. "Tribunal” means the Competition Tribunal of South Africa, a statutory
body established in terms of section 26 of the Act, with its principal place of
business at Mulayo Building (Block C), the DTI Campus, 77 Meintjies Street,
Sunnyside, Pretoria, Gauteng.
2. THE COMPLAINT INVESTIGATION FINDINGS
2.1 On 14 March 2023, Integrity Tools (Pty) Ltd ("Integrity Tools"} lodged a
complaint alleging that the Respondent had a trading policy which required
dealers who did not physically hold stock of Festool products to not advertise
Festool products at a discount to the recommended list price. Pursuant to
Integrity Tools withdrawing its complaint, the Commissioner initiated a complaint
against the Respondent on 13 June 2023 in terms of section 498(1) of the Act for
allegedly engaging in the practice of minimum resale price maintenance in
contravention of section 5(2) of the Act.
2.2 The Commission investigated the complaint including allegations that the
Respondent required dealers to offer customers a maximum of 15% discount in
respect of Festool products.
2.3 During the course of the investigation, the Respondent approached the
Commission with a view to resolving the matter amicably . The Parties agreed to
settle the complaint in the terms of this Consent Agreement.
3. ADMISSION
The Respondent does not admit that it contravened section 5(2) of the Act.
4. FUTURE CONDUCT
The Respondent agrees to:
4.1 Desist from conduct in contravention of section 5(2) of the Act.
4.2 Develop, implement, and monitor a competition law compliance
programme incorporating corporate governance designed to ensure that none of
its employees, management, directors and agents who are involved in any
commercial activities in South Africa engage in future contraventions of the
Act. In particular, such compliance programme will include the following:
4.2.1 A competition policy to be drafted and implemented by the
Respondent;
4.2.2 Specific training on competition law aspects particularly relevant to
the prohibited practice of minimum resale price maintenance, which
training has already commenced; and
4.2.3 Ensure that such training will be made available to all new
employees joining the Respondent. Furthermore, the Respondent will
update such training annually to ensure on an on-going basis that it and its
members cannot engage in any anti-competitive activities.
5. ADMINISTRATIVE PENALTY
5.1 Having regard to the provisions of sections 58(1)(a)(iii) as read with
sections 59(1)(a), 59(2) and 59(3) of the Act, the Respondent undertakes to pay
an administrative penalty.
5.2 The Parties have agreed that the Respondent will pay an administrative
penalty in the amount of R900 000.00 (Nine hundred thousand Rand).
5.3 This amount does not exceed 10% of the Respondent's total annual
income in the Republic and its exports from the Republic for its 2022 financial
year.
5.4 The Respondent will pay the amount set out in 5.2 above to the Commission
in three equal instalments within 90 days after the Confirmation Date.
5.5 The penalty must be paid into the Commission's bank account which is as
follows:
NAME: THE COMPETITION COMMISSION FEE ACCOUNT =
BANK: ABSA BANK, PRETORIA
ACCOUNT NUMBER 4087641778
BRANCH CODE: 323 345
PAYMENT RERERENCE: 2023Jul0001
5.6 The penalty will be paid over by the Commission to the National Revenue
Fund in accordance with the provisions of section 59(4) of the Act.
6. MONITORING AND COMPLIANCE
6.1 The Respondent shall provide the Commission with an affidavit attested to
by a senior official from the Respondent within 60 days of the Confirmation Date,
confirming compliance with the undertakings in 4 above.
6.2 The compliance affidavit and other documents relating to this matter
shall be forwarded to the Commission at ccsa@compcom.co.za with the
Commission case number of this matter (i.e. 2023Jul0001) as the reference.
7. FULL AND FINAL SETTLEMENT
This Settlement Agreement is entered into in full and final settlement in respect
of all conduct which is the subject matter of the Commission's investigation
under the Complaint, and, upon confirmation as an order of the Tribunal,
concludes all proceedings between the Commission and the Respondent in
respect of all such conduct.
Dated and signed at MIDRAND on the 12th day of NOVEMBER 2024
Duly authorised to sign for Vermont Sales (Pty) Ltd
Name in Full: ROLAND HUMT
Position: DIRECTOR
Dated and signed at Pretoria on the 4th day of December 2024
For the Competition Commissioner
Doris Tshepe
Commissioner