The Competition Tribunal has approved settlement agreements between the Competition Commission and Investchem and Akulu Marchon/Chemical Initiatives (CI), with regard to price fixing and dividing of markets for key chemical input materials used to make detergents, cosmetics and toiletries.
Akulu and CI are ultimately owned by AECI.
The settlements with Investchem and Akulu/CI emanate from a commission-initiated complaint in November 2014 in the market for the supply and manufacture of surfactants.
This was followed by a search and seizure operation in December 2014 on the premises of the respondents. Information obtained revealed that from 2003 to 2013 the respondents had entered into agreements to fix the prices of surfactants and divide the markets by allocating customers to one another.
According to the commission’s complaint, the companies discussed and agreed on increasing the prices of surfactants, which would increase margins.
The respondents would discuss increases in input costs, enabling them to increase their prices by the same amount in response to increases in input costs.
The respondents also allocated customers and agreed not to pursue each other’s allocated customers.
In terms of the settlement agreements, the respondents undertook to submit biannual reports to the commission and to supply an existing or prospective customer with any of the types of surfactants manufactured or supplied by the companies at the time the customer orders the surfactants.
Investchem has agreed to pay a penalty of R23.42-million, and Akulu/CI a penalty of R13.91-million.