The Competition Tribunal is considering a settlement agreement involving the Association of Electric Cable Manufacturers South Africa (AECMSA), which has admitted to fixing the selling price of electric power cables, largely affecting State-owned power utility Eskom, as well as large industries and municipalities.
In 2010, the Competition Commission initiated a complaint against several manufacturers, including AECMSA, for possible cartel activity in the market in the supply of electric cables.
The other manufacturers named in the complaint referral include Alvern Cables, South Ocean Electric Wire Company, Tulisa Cables, Alcon Marepha, CBI-Electric: African Cables, Phoenix Power Cables, Cabcon Technologies, Silcom, Malesela Taihan Electric Cable, Kewberg Cables & Braids, Norco Cables and Aberdare Cables.
Aberdare Cables was granted conditional corporate leniency on March 5, 2012.
Malesela Taihan Electric Cable paid an administrative penalty of R20.2-million, while ATC agreed to pay R80.74-million and South Ocean Holdings R13.3-million.
In its complaint referral, the commission alleges that the electric cable suppliers agreed on input prices or costs in respect of raw material input products necessary for the manufacturing of power cables.
“The commission further submits that the alleged conduct pre-dates the Competition Act and endured until August 2012,” it said in a statement on Wednesday.
It added that a pricing formula was used by AECMSA to calculate the prices of electric power cables based on indicators of inputs such as copper, lead, aluminium, fully galvanised wire, polyethylene, rubber and silicone, among other materials.
The prices of these inputs fluctuate monthly.
Further, the indices were used when quoting for long-term, short-term and tender contracts issued by various tender customers.
The commission is asking the tribunal to approve an administrative penalty of R14 853.67 – 1% of AECMSA’s membership fees for 2010.