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Jul 04, 2012

Tribunal hands down penalties in plastic cartel case

Engineering|Africa|Marley|Mining|Pipe|Pipes|Systems|Africa|Pipes|Plastic Pipe Products|Products|Systems|Gazelle Plastics|Michelle Harding|Pipe
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The Competition Tribunal on Wednesday handed down penalties of R2-million and R11-million to MacNeil Agencies and Amitech South Africa, respectively, after they were found to have contravened the Competition Act through collusive behaviour.

Andrag and Petzetakis Africa were also found guilty of engaging in price-fixing, allocation and collusive tendering of their plastic pipe products.

The testimony of Petzetakis MD Michelle Harding resulted in an 80% discount for the company, which was penalised R9.92-million, while Andrag received no penalty, after the Competition Commission found the group’s involvement to be limited in that a representative who attended one meeting, was unaware of the collusive purpose of the meeting.

DPI Plastics received immunity from prosecution in terms of the commission’s corporate leniency policy.

The tribunal dismissed the case against Gazelle Plastics and Gazelle Engineering.

A total of R31-million, R7.6-million and R5-million penalties have been settled by Marley Pipe Systems, Swan Plastics and Flo-Tek Pipes & Irrigation, respectively.

The case was referred to the tribunal in 2009 after the Competition Commission found that DPI Plastics, Marley Pipe Systems, Petzetakis Africa, Swan Plastics, Amitech South Africa, Flo-Tek Pipes & Irrigation, Andrag, Gazelle Plastics, Gazelle Engineering and MacNeil Agencies fixed prices, rigged tenders and divided markets by allocating contracts and customers.

“Enforcement against cartels requires more [Michelle] Hardings who are willing to take a moral stand and, as she put it in her testimony, ‘stop the cancer’,” the Tribunal said in its ruling.

The commission claimed that this cartel activity stretched back from before the Competition Act came into force, until 2007.

The respondents comprised manufacturers and suppliers of pipe products, which collectively enjoyed the major share of the market. The pipe products were used for plumbing and in the civil engineering, mining and agricultural sectors in South Africa.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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