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[2011] ZACT 23
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Competition Commission v Carolina Rollermeule (Pty) Ltd, Competition Commission v Pioneer Foods (Pty) Ltd and Others (15/CR/MAR10) [2011] ZACT 23 (13 April 2011)
COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: 15/CR/Mar10
In
the matter between:
The
Competition Commission
…...................................................................
Applicant
and
Carolina
Rollermeule (Pty) Ltd
…...............................................................
Respondent
Panel:
N
Manoim (Presiding Member), Y Carrim (Tribunal Member) and A Wesseis
(Tribunal Member)
Heard
on:
13
April 2011
Decided
on:
13
April 2011
ORDER
The Tribunal hereby
confirms the order as agreed to and proposed by the Competition
Commission and the respondent, annexed hereto
marked "A".
N Manoim
Concurring:
Y
Carrim and A Wesseis
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
HELD
IN PRETORIA
CC
CASENO: 2007MAR244
CT
CASE NO.: 15/CR/MAR10
In
the matter between:
COMPETITION
COMMISSION
…..........................................................................
Applicant
and
CAROLINA
ROLLERMEULE (PTY) LTD
….....................................................
Respondent
In
re:
COMPETITION
COMMISSION
…..........................................................................
Applicant
And
PIONEER
FOODS (PTY) LTD
….................................................................
First
Respondent
FOODCORP
(PTY) LTD
….......................................................................
Second
Respondent
GODRICH
MILLING (PTY) LTD
…..........................................................
Third
Respondent
PROGRESS
MILLING (PTY) LTD
…......................................................
Fourth
Respondent
PRIDE
MILLING (PTY) LTD
…..................................................................
Fifth
Respondent
WESTRA
MILLING (PTY) LTD
….............................................................
Sixth
Respondent
BRENNER
MILLS (PTY) LTD
…...........................................................
Seventh
Respondent
BLBNKWATER
MILLS (PTY) LTD
…....................................................
Eighth
Respondent
TWK
MILLING (PTY) LTD
…....................................................................
Ninth
Respondent
NTK
MILLIN (PTY) LTD
….......................................................................
Tenth
Respondent
CAROLINA
MILLS (PTY) LTD
….......................................................
Eleventh
Respondent
ISIZWE
MILLS (PTY) LTD
…................................................................
Twelfth
Respondent
BOTHA
VILLE MILLING (PTY) LTD t/a THUSO MILLS
…......
Thirteenth
Respondent
PARAMOUNT
MILLS (PTY) LTD
…...............................................
Fourteenth
Respondent
KEYSTONE
MILLING CO.(PTY) LTD
…..........................................
Fifteenth
Respondent
PREMIER
FOODS (PTY) LTD
….........................................................
Sixteenth
Respondent
TIGER
BRANDS LIMITED MILLS
…............................................
Seventeenth
Respondent
SETTLEMENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND CAROLINA
ROLLERMEULLE (PTY) LTD IN REGARD TO ALLEGED CONTRAVENTIONS
OF
SECTION 4
(1) (b) OF THE
COMPETITION ACT 89 OF 1998
The
Competition Commission and Carolina Rollermeulle. (Pty) Ltd hereby
agree that application be made to the Competition Tribunal
for
confirmation of this Settlement Agreement as an order of the
Tribunal in terms of
section 49D
as read with
sections 58(1)
(b) and
59
(1) (a) of the
Competition Act 89 of 1998
, as amended, on the
terms set out below. This settlement agreement is entered into in
settlement of the price fixing and market
allocation allegations in
the white maize milling industry.
1.
Definitions
1.1
For the purposes of this settlement agreement the following
definitions shall apply:
1.1.1.
"Act"
means
the Competition Act, 1998 (Act No.89 of 1998), as amended.
1.1.2.
""Blinkwater"
means
Blinkwater Mills (Pty) Ltd, a company duly incorporated in
accordance with the company laws of the Republic of South Africa,
with its registered office, alternatively its principal place of
business at 10 SADC Street, Middelburg, Mpumalanga Province.
1.1.3.
"Bothaville"
means
Bothaville Milling (Pty) Ltd t/a Thuso Mills, a company duly
incorporated in accordance with the company laws of the Republic
of
South Africa, with its registered office, alternatively, it
principal place of business at 10
th
Avenue,
Industrial Site, Bothaville, Free State Province.
1.1.4.
"Brenner"
means
Brenner Mills (Pty) Ltd, a company duly incorporated in accordance
with the company laws of the Republic of South Africa,
with its
registered office, alternatively its principal place of business at
980 Park Street, Arcadia, Pretoria, Gauteng.
1.1.5.
"Carolina
"
means Carolina Rollermeule (Pty) Ltd, a company duly incorporated in
accordance with the company .laws of the Republic
of South Africa,
with its registered office, alternatively its principal place of
business at 27 Voortrekker Street, Carolina,
Mpumalanga Province.
1.1.6.
"CLP"
means
the Commission's Corporate Leniency Policy gazetted in Government
Gazette number 31064 of2008.
1.1.7.
"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 Building C, Mulayo Building, DTI Campus, 77
Meintjies Street, Sunnyside, Pretoria, South Africa.
1.1.8.
"Commissioner"
means
the Commissioner of the Competition Commission appointed in terms of
section of 22 of the Act;
1.1.9.
"Foodcorp"
means
Foodcorp (Pty) Ltd; a company duly incorporated in accordance with
the company laws of the Republic of South Africa, with
its
registered office alternatively its principal place of business at
415 Mitchel Street, Pretoria West, Gauteng.
1.1.10.
"Godrich"
means
Godrich Milling (Pty) Ltd, a company duly incorporated in accordance
with the company laws of the Republic of South Africa,
with its
registered office, alternatively its principal place of business at
Lanham Street, Extention Bronkhorstpruit, Mpumalang
Province.
1.1.11.
"Kalel"
means
Kalel Mills, now t/a Isizwe Mills (Pty) Ltd a company duly
incorporated in accordance with the company laws of the Republic
of
South Africa, with its registered office, alternatively, its
principal place of business or whose last known address was 32
Watt
Street, Industrial Area, Middelburg, Mpumalanga Province.
1.1.12.
"Keystone" means Keystone Milling (Pty) Ltd, a company
duly incorporated in accordance with the company laws
of the
Republic of South Africa with its registered office, alternatively
its principal place of business at 47 Lucas Street,
Rustenburg,
North West Province.
1.1.13.
"NTK"
means
NTK Mills a company duly incorporated in accordance with the company
laws of the Republic of South Africa with its registered
office,
alternatively, its principal place of business at 84 River Road,
Modimole, Limpopo province.
1.1.14.
"Paramount"
means
Paramount Mills (Pty) Ltd,a company duly incorporated in accordance
with the company laws of the Republic of South Africa
with its
registered office, alternatively, its principal place of business at
4 Royan Road, Gately East London, Eastern Cape
Province.
1.1.15.
"Pioneer"
means
Pioneer Foods (Pty) Ltd, a company duly incorporated in accordance
with the company laws of the Republic of South Africa
with its
registered office, alternatively its principal place of business at
Markstraat 32, Paarl, Cape Town. Western Cape Province.
1.1.16.
"Premier"
means
Premier Foods (Pty) Ltd a company duly incorporated in accordance
with the company laws of the Republic of South Africa,with
its
registered office, alternatively principal place of business at 1
Joint Street, Isando, Johannesburg, Gauteng.
1.1.17.
"Pride"
means
Pride Milling (Pty) Ltd, a company duly incorporated in accordance
with the company laws of the Republic of South Africa,
with its
registered office, alternatively principal place of business at
Ground Floor, Block C, Futuram Office Park, 117 Lenchen
Avenue,
Centurion, Pretoria, Gauteng.
1.1.18.
"Progress
Milling"
means
Progress Milling (Pty) Ltd, a company duly incorporated in
accordance with the company laws of the Republic of South Africa,
with its registered office, alternatively its principal place of
business at No. 1 20
th
Street,
Industria Polokwane, Limpopo Province.
1.1.19.
"Respondents"
means
all the firms that are cited in the complaint referral affidavit and
which are individually named in this settlement agreement.
1.1.20.
"Settlement
Agreement"
means
this settlement agreement duly signed and concluded between the
Commission and Carolina Rollermeule.
1.1.21.
"Tiger" means Tiger Brands Limited, a company duly
incorporated in accordance with the company laws of the Republic
of
South Africa, with its registered office, alternatively its
principal place of business at 3010 William Nicol Drive, Bryanston,
Johannesburg, Gauteng.
1.1.22.
"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 Building C, Mulayo Building, DTI Carnpus,77
Meintjies Street, Sunnyside, Pretoria.
1.1.23.
"TWK"
means
TWTC Milling (Pty) Ltd, a company duly incorporated in accordance
with the company laws of the Republic of South Africa,
with its
registered office, alternatively its principal place of business at
13 Church Street, Piet Retief, Mpumalanga Province.
1.1.24.
"Westra"
means
Westra Milling (Pty) Ltd, a company duly incorporated in accordance
with the company laws of the Republic of South Africa,
with its
registered office, alternatively principal place of business at
Stasie Straat, Christiana, Northern Cape Province.
2.
Complaint
investigation and Commission's findings
2.1.
On or about 14 March 2007, the Commission initiated a complaint
against Tiger, Pioneer, Foodcorp, Pride and Progress Milling
in
respect of alleged collusive activities in the maize milling
industries. The initiation was subsequently amended to include
other
players in the maize milling industry, namely Blinkwater, Godrich,
TWK, Keystone, Westra, Carolina, Brenner, Paramount,
NTK, Isizwe ,
Bothaville. The complaint was initiated after the Commission had
received a corporate leniency application from
Premier, in 2007,
which was subsequently corroborated by a further leniency
application from Tiger.
2.2.
The Commission's investigation revealed that at various stages
during the period 1998 to at least 2007 the Respondents, being
firms
in the same line of business, were involved in conduct in
contravention of section 4(l)(b)(i) of the Act in that various
representatives of the firms engaged in the following conduct:
2.2.1
Attended numerous meetings and-held telephone discussions in which
they agreed
inter
alia:
2.2.1.1.
to fix the prices of milled white maize products;
2.2.1.2.
create uniform price lists for wholesale, retail and general trade
customers;
2.2.1.3.
the timing of the price increases and implementation thereof.
2.2.2.
The
agreements concluded at these meetings were used to secure co-
ordination at both national and regional levels of the market
and
were mutually reinforcing.
2.2.3.
During
the period between 2005 to 2006 Carolina and its competitors in the
Mpurnalanga region namely Tiger, Blinkwater, Pride,
Brenner, TWK,
Godrich, Ruto Mills, Tiger, Isizwe and Carolina Mills met to agree
to the level and timing of price increases.
2.2.4
Through
these price fixing arrangements, Carolina and its
competitors
prevented and/or limited price competition amongst
themselves in relation to
pricing of milled white maize products.
2.3
Carolina has not provided any new information to the Commission but
it has indicated its willingness to co-operate with the
Commission
in its prosecution of the remaining respondents.
3.
Admission
Carolina
admits that it has contravened section 4 (l)(b)(i) of the Act, in
that during or about 2005 to 2006 it was represented
in a series of
meetings between it and its competitors at which agreements to fix
selling prices of milled white maize and the
implementation dates of
such prices were reached.
4.
Agreement concerning future conduct
4.1.
Carolina agrees to fully cooperate with the Commission in relation
to the prosecution of any other respondents in this Complaint
referral. Without limiting the generality of the above, Carolina
specifically agrees to:
4.1.1.
testify
in support of the Commission's case regarding the contraventions in
this settlement agreement; and
4.1.2.
provide evidence, written or otherwise, which is in its possession
or under its control concerning the contraventions contained
in this
settlement agreement.
4.2.
Carolina agrees to develop and implement a compliance programme
incorporating corporate governance, designed to ensure that
employees, management and directors within Carolina, its
subsidiaries and business units do not engage in any contraventions
of section
4
(1)
(b)
of the Act, a copy of which programme shall be submitted to the
Commission within
60
days
of the date of confirmation of this consent agreement as an order by
the Tribunal.
4.3.
Carolina confirms that it has ceased engaging in and undertakes to
not engage in conduct detailed in paragraph
3.
5.
Administrative Penalty
5.1.
Having regard to the provisions of section
58(1)
(a)
(iii), read with sections
59(1)
(a),
59(2)
and
(3)
of
the
Act,
Carolina
accepts that it is liable to pay an administrative penalty.
5.2.
The parties have agreed that Carolina will pay an administrative
penalty in the sum of
R4
417 546.00
(four
million four hundred and seventeen thousand five hundred and forty
six rands) being
5%
of
its total turnover for the
2009
financial
year.
5.3.
Carolina
will pay the penalty amount to the Commission in two equal payments,
the first such payment of
R
2 208 773.00
(two
million two hundred and eight thousand seven hundred and seventy
three rands) to be made within seven
(7)
days
of confirmation of this settlement Agreement as an Order of the
Tribunal.
5.4.
Carolina will make the second payment of
R
2
208 773.00 (two million two hundred and eight thousand seven hundred
and seventy three rands) within six (6) months of the confirmation
of the Settlement Agreement as an Order of the Tribunal.
5.5.
This amount shall be paid into the following bank account:
NAME
: THE COMPETITION COMMISSION FEE ACCOUNT
BANK:
ABS A BANK, PRETORIA
ACCOUNT
NUMBER : 4050778576
BRANCH
CODE: 323 345
5.6.
The Commission will pay these sums to the National Revenue Fund in
terms of section 59 (4) of the Act.
6.
Full
and final resolution
This
Settlement Agreement is entered into in full and final settlement
and upon confirmation as an order by the Tribunal, concludes
all
proceedings between the Commission and Carolina relating to any
alleged contraventions by Carolina of section 4 (1) (b) of
the Act
that are the subject of the Commission's investigation under case
number 2007Mar2844.
Dated
at
Carolina
on
this the
8
day
of
December
2010
Chris
Roets
Director:
Carolina Rollermeule Co. (Pty) Ltd
Dated
at
Pretoria
on
this the
28
t
h
of
February
2011
Shan
Ramburuth
The
Commissioner: Competition Commission