| Mon 28 Feb 2011, 12:05 | | THEE - Outcome of Competition Tribunal Hearings |
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JSE
THEE
THEE - Outcome of Competition Tribunal Hearings
OUTCOME OF COMPETITION TRIBUNAL HEARINGS
(Following is a guideline for journalists. The information can be used but
please do not quote Nandi Mokoena or the Tribunal)
Tribunal confirms amended settlement agreement between the Commission and
Sasol
On Friday the Competition Tribunal confirmed an amended settlement agreement
between the Commission and Sasol Chemical Industries regarding the conduct of
one of its divisions, Sasol Polymers. In the agreement, Sasol admits to having
contravened the Competition Act, by engaging in indirect price fixing, and
agrees to pay a penalty of R111, 6 million within 60 days of the confirmation
date.
During Thursday`s hearing into the proposed settlement the Tribunal asked for
certain changes to the consent agreement including the insertion of a
mechanism to ensure that the Commission monitors the implementation of the
terms of the settlement.
Settlement agreements must be confirmed by the Tribunal in order to be
enforceable.
Background
In December 2010, the Competition Commission reached a settlement with Sasol
Polymers in which Sasol admitted 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 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, Sasol 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.
Following the conclusion of the agreement, the Commission 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.
Issued By:
Nandi Mokoena
PR Consultant: Competition Tribunal
Cell: +27 (0) 82 399 1328
E-mail: NandisileM@live.co.za
On Behalf Of:
Lerato Motaung
Registrar: Competition Tribunal
Tel: (012) 394 3355
Cell: +27 (0) 82 556 3221
E-Mail: LeratoM@comptrib.co.za
Date: 28/02/2011 12:05:01 Produced by the JSE SENS Department.
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