The Competition Tribunal reports that furniture removal companies Stuttafords Van Lines and Pickfords Removals SA have admitted to involvement in a furniture removal cartel and agreed to pay an administrative penalty totalling R40-million.

This forms part of the terms of a settlement agreement which has been confirmed as an order by the tribunal following a hearing during which the tribunal heard submissions on various aspects of the settlement agreement.

The settlement agreement concludes all complaints, investigations and prosecutions relating to Stuttafords and Pickfords.

In 2010, the Competition Commission launched investigations into several furniture removal companies including Stuttafords, Pickfords and AGS Fraser International – operating subsidiaries of Laser Transport Group.

The investigations revealed that furniture removal companies had tendered collusively in the provision of furniture removal services to government departments, big corporates and private individuals.

The collusion, which is alleged to have occurred from 2007 to at least 2012, involved the exchange of cover prices and quotes. Cover pricing is a practice whereby one or more firms agree that they will submit tenders in such a way that the designated winner will submit the lowest or most favourable bid and the other/s will submit artificially high bids so as not to win the contract.

Stuttafords was charged with 649 instances of collusive tendering involving the exchange of cover quotes, Pickfords with 37 and AGS with three.

Stuttafords and Pickfords are jointly and severally liable to pay the R40-million penalty – the one paying and the other to be absolved.

They agree, among others, to refrain from engaging in cartel conduct in the future; and continue to implement and monitor a competition law compliance programme.

The commission has agreed, as part of the settlement, to withdraw the complaint referral against AGS.