May 08, 2012
RMS, Vulcania fined in mesh wire cartel caseBack
Murray & Roberts Steel|Reinforcing Mesh Solutions|Steel|Vulcania
© Reuse this
The Competition Commission said on Tuesday it initiated an investigation in 2008, when BRC Mesh Reinforcing, through its parent company Murray & Roberts Steel, admitted its involvement in the cartel, which also included RMS, Vulcania and Aveng Africa (trading as Steeldale Mesch). Murray & Roberts was granted conditional immunity from prosecution, provided it cooperated with the commission during its investigation.
In the tribunal’s hearing, it emerged that, after the cartel discussed and agreed on prices derived from a set formula at industry meetings, industry association the South African Fabric Association circulated recommended price lists for adoption by members. This allowed the companies to simultaneously pass on input cost increases to their customers by providing a common mechanism for deriving the final price.
Vulcania, which denied that its attendance at the meetings amounted to an agreement to join the cartel, was found to have participated in the cartel from January 2006 until January 2008.
Vulcania stated that it only attended meetings to ensure continued supply from its competitors by way of making them believe the firm was part of the cartel. However, the tribunal found that whether Vulcania’s participation was ‘real or a sham’, Vulcania benefited from the cartel as it amounted to protection from potential competition.
The commission said RMS, which was found to be involved in the cartel from January 2004 until January 2008, admitted liability, but argued the extent of its involvement in the cartel and also whether a penalty could be competently imposed upon it and if it could, what an appropriate penalty was.
RMS, further, denied the commissions claim that the company undertook organisational restructuring before the cartel was exposed to avoid penalties, adding that the change was for commercial reasons and, at the time, it was not aware of any legal action against it.
RMS argued that it had no turnover in the relevant financial year and therefore, no penalty could be levied on it. The Tribunal, however, determined the appropriate penalty based on the “earliest preceding year of normal turnover”.
The tribunal, for the first time, based its determination of the penalties on a new six-step approach under the European Union 2006 penalty guidelines, as with an earlier Competition Appeal Court finding in a Southern Pipeline Contractors case in 2011.
Aveng settled the case with the commission in April 2011 and paid an administrative penalty.
Edited by: Mariaan Webb© Reuse this Comment Guidelines
Updated 1 hour 2 minutes ago Employment in the formal nonagricutural sector increased by 16 000 persons, or 0.2%, quarter-on-quarter during the three months ended September 30, to an estimated 8.45-million employees, Statistics South Africa (Stats SA) has found. On a year-on-year basis,...
Updated 1 hour 21 minutes ago The roll-out of e-tolling on Gauteng’s highways has resulted in a “lot of work” for fleet administrators, says Imperial Fleet Management (IFM) CEO Nicholas De Canha. The need to make payments within seven days, every seven days – if not using a prepaid or...
Recent Research Reports
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 Report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
Projects in Progress - Second Edition (PDF Report)
Creamer Media’s second Projects in Progress supplement considers some of the major project developments under way, including high-profile energy and transport projects, as well as a few of the lower-profile public and private developments. What remains apparent is...
Water 2013: A review of South Africa’s water sector (PDF Report)
Creamer Media’s Water 2013 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Canadian Mining Roundup for June 2013 (PDF Report)
The June 2013 roundup includes details of the development of TSX-V-listed Aldridge Minerals’ flagship Yenipazar polymetallic project, in Turkey; the Canadian Nuclear Safety Commission’s renewal of Cameco’s uranium mining licence pertaining to the Cigar Lake...
This Week's Magazine
Mitsubishi Motors South Africa (MMSA) has introduced a 4x2 derivative of its Pajero Sport sports-utility vehicle (SUV), which will give it access to a substantial slice of the full-size SUV market, where it will compete with the likes of the Ford Everest, Chevrolet...
South African Energy Minister Ben Martins has affirmed that the government wants the country to be globally competitive in the nuclear sector. "Our responsibility has always been ... to ensure that, in nuclear energy, South Africa can compete with the rest of the...
Mercedes-Benz South Africa (MBSA) president and CEO Dr Martin Zimmermann describes the new S-Class as “a special place to be”, with the car creating a sense of “wellness” once you are seated inside the German brand’s flagship model. It is difficult to argue...
Water scarcity and water-quality issues are broadly recognised and understood in most political, business and civil organisations in South Africa, but solving water issues will require wide and continuous action in catchments and municipalities by organisations and...
Work is well under way on the R212-million Imvutshane dam, 30 km north-west of Stanger, in KwaZulu-Natal, which is a key link in supplying people in rural Maphumulo with a reliable source of safe drinking water.