Furniture removal company, Stuttaford Van Lines, on Wednesday was charged with 649 counts of collusive tendering relating to hundreds of government tenders issued for furniture transportation.
The Competition Commission, which charged Stuttaford, said this included tenders issued by the Presidency, Parliament, the SA Secret Service, the SA Police Service, the National Prosecuting Authority, SA Revenue Services, the Reserve Bank, the Department of Justice, the Public Protector as well as State-owned enterprises and private companies.
Stuttaford faces the largest number of charges as one single company in the history of anti-cartel enforcement by the Commission. The Commission is asking the Tribunal to fine the company 10% of its annual turnover on each of the 649 charges.
The matter emanates from a Commission investigation that uncovered widespread and deep-rooted anti-competitive and collusive conduct in the furniture removal market.
In 2010, the Commissioner initiated a complaint into alleged collusive conduct in contravention of section 4 of the Competition Act, in the market for the provision of furniture removal services.
The Commission found that in the furniture removal industry, a general requirement was that the removal of furniture of government employees required at least two quotes in order to be financed by government.
In this regard, the furniture removal companies had an arrangement that the company approached first would source the second quotation on behalf of the client from its competitor.
The first company would stipulate the price at which its competitor should price the tender. The company that requested the quotation would also request its competitor to send its quote directly to the customer. This type of quotation is known as a cover quote. It is a price provided by a company that wishes to win a tender, to another company that does not wish to do so.
The investigation revealed Stuttafords colluded with its competitors from at least 2007 and entered into discreet collusive agreements relating to the furniture removal tenders, mostly involving government departments.
This involved cover quotes being submitted as part of the tender processes.
The case has been referred to the Tribunal for adjudication. The Commission said all the companies found to have colluded with Stuttafords have subsequently settled.