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JSE
THEE
THEE - The Competition Commission - Sasol settles its polymers collusion case
with a R111 Million fine
14 December 2010
MEDIA RELEASE
Sasol settles its polymers collusion case with a R111 million fine.
The Competition Commission today reached a settlement with Sasol Polymers, a
division of Sasol Chemical Industries Ltd, in which Sasol admits that the supply
agreement between it and Safripol (Pty) Ltd ("Safripol") resulted in indirect
price fixing. In its investigation the Commission found that Sasol and Safripol
engaged in collusive conduct as a result of the implementation of the supply
agreement including the operation of the pricing formula and the exchange of
information relating to the pricing of polypropylene.
Sasol Polymers has agreed to pay a penalty of R111 690 000 which represents 3%
of its 2009 total annual turnover derived from polypropylene products.
The Commission referred a case of collusion and excessive pricing against Sasol
Chemical Industries Limited and Safripol to the Tribunal for adjudication on 12
August 2010. This settlement agreement resolves the collusion aspect of the
case. In terms of the settlement with Sasol has agreed to stop sharing
competitively sensitive information including prices and volumes of
polypropylene sold. It will also amend problematic provisions of the supply
agreement to ensure that price is set independently. The Commission has filed an
application for the confirmation of this settlement agreement with the Tribunal.
The Commission previously concluded a consent agreement with Safripol in which
it admitted contravention of the Competition Act and agreed to pay a penalty of
R16, 5 million, representing 1,5% of its total annual (2009) turnover derived
from polypropylene products. This consent agreement has since been confirmed by
the Tribunal.
At the conclusion of its investigation, the Commission found that Sasol had
charged excessive prices for polypropylene and propylene to its local customers
in line with import parity pricing. The Commission`s findings and allegations of
excessive pricing are being contested by Sasol and are still to be heard by the
Tribunal.
This case was initiated in 2007 following concerns raised by the Department of
Trade and Industry (dti) about polymer pricing and its negative effect on
diversified growth and employment in manufacturing. Sasol is the dominant
supplier of polypropylene for its own use and that of Safripol. It is also the
major supplier of polypropylene to the South African market. Polypropylene is a
plastics polymer used by plastics converters to manufacture a wide range of
products.
ENDS
Further Information:
Oupa Bodibe, Manager: Advocacy & Stakeholder Relations
012 394 3267 / 082 563 6970/ oupab@compcom.co.za
Keitumetse Letebele, Head: Communications
012 394 3183/082 783 3397/ keitumetsel@compcom.co.za
Date: 14/12/2010 16:04:01 Produced by the JSE SENS Department.
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