The Competition Commission on Thursday said it was investigating packaging paper products producers Mpact and New Era Packaging over allegations of collusion.
A search and seizure operation of the parties’ Gauteng and Free State premises got under way on Thursday after warrants were obtained from the North Gauteng High Court, in Pretoria, and the Free State High Court, in Bloemfontein.
“The commission has reasonable grounds to suspect that New Era and Mpact have engaged in collusive practices in contravention of the Competition Act, which prohibits competitors from reaching agreements to fix prices, allocate customers or rig tenders,” Competition Commissioner Tembinkosi Bonakele said in a statement.
Confirmation of the commission’s raid on Mpact premises sent the JSE-listed group’s shares tumbling some 5%.
“The management of Mpact is engaging with the commission,” the company said in a statement, reiterating the firm’s zero tolerance stance towards anticompetitive behaviour.
“The company is committed to ensuring that its employees, management, and directors do not engage in any conduct that constitutes prohibited practice. To this end, Mpact has put in place numerous initiatives to ensure good corporate governance across all its operations.”
During the search operation, the commission would seize all documents and electronic data relevant to the investigation.
“Packaging paper products are an important input and certainly contribute to the costs of various products requiring paper packaging and, as such, the commission takes allegations of collusion in this sector seriously,” Bonakele commented.