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Commission unearths power-cable collusion, refers case to tribunal

Meetings were often held when there were significant input price changes

Meetings were often held when there were significant input price changes

Photo by Duane Daws

19th March 2014

By: Terence Creamer

Creamer Media Editor

  

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A Competition Commission investigation, initiated in 2010 into power cables companies, has unearthed cartel conduct by four firms and its findings have been referred to Competition Tribunal for adjudication.

The probe, which included a May 6, 2010, search-and-seizure operation, concluded that Alvern Cables, South Ocean Electric Wire Company (SOEW), Tulisa Cables, and Aberdare Cables fixed selling prices to wholesalers, distributors and original-equipment manufacturers between 2001 and 2010.

However, Aberdare had been granted conditional leniency by the commission, which applies a ‘first-through-the-door’ corporate leniency policy for transgressors willing to both confess their role in breaching the Competition Act and cooperate with the commission in its investigation.

Aberdare Cables, which is part of the Altron Group, said it had co-operated fully with the commission  and had also undertaken its own internal review.

"Given that Aberdare Cables continues to fully comply with the commission’s requirements as set out in the conditional immunity agreement, Aberdare Cables does not anticipate incurring any penalties as prescribed in the Competition Act," the company said in a statement.

The commission had asked the tribunal to impose an administrative penalty of 10% of yearly turnover on each of the other firms involved.

The investigation also found that, from about 2001 to at least end 2007, Aberdare agreed, with SOEW and Alvern, respectively, to divide markets by allocating customers.

The commission said Bidvest’s Voltex Group, ARB Holdings, Universal Cables, Trinity Cables, Powermac, Paragons, South Atlantic Cables and Electrobase were affected by the anticompetitive conduct.

The products affected include house, surface twin and earth wire used to distribute power to home appliances and in residential and commercial lighting.

The commission found that the firms had regular meetings and telephone conversations to discuss power-cable price adjustments.  “These meetings were sometimes held at coffee shops and took place as and when there was a significant change in prices of input materials.”

The products are typically made from copper, aluminium, polyethylene, steel tape and galvanised wire.

Acting Commissioner Tembinkosi Bonakele said the commission’s focus remained that of ensuring the market was free of anticompetitive behaviour, including “collusion which, simply put, robs the citizens of our country who are the end-users”.

“We are grateful for those that cooperate and wish to encourage citizens to be part of alerting the commission and providing us with invaluable information to help us uproot the unacceptable anticompetitive practices,” Bonakele said in a statement.

Edited by Creamer Media Reporter

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