The Competition Commission has referred a cartel case against Unilever South Africa and Sime Darby Hudson Knight to the Competition Tribunal for prosecution, for the alleged division of markets in the bakery and cooking products sector in South Africa.
The commission said the two companies had, between 2004 and 2013, entered into a sale of business agreement, which contained a clause in terms of which they agreed not to compete in respect of certain pack sizes of margarine and edible oils.
In terms of the noncompete clause, Unilever and Sime Darby agreed that the latter would not supply industrial customers with margarine pack sizes that were less than 15 kg; would not supply to the retail sector of the market where Unilever is active; would not supply retail customers with its Crispa branded edible oils and would only produce and supply 25 ℓ pack size of edible oils, which it would supply to industrial customers exclusively; while Unilever would not supply industrial customers with its Flora branded edible oils.
While Sime Darby reached a settlement with the commission in 2016, the commission now sought an order from the tribunal declaring that Unilever and Sime Darby contravened the Competition Act, as well as an order declaring Unilever liable for payment of an administrative penalty equal to 10% of its yearly turnover.
“Food and agroprocessing is an important focus area for the commission, and we are determined to root out exploitation of consumers by cartels that are so prevalent in this sector,” said Competition Commission commissioner Tembinkosi Bonakele.