Corrugated packaging paper companies prosecuted for collusive conduct

15th April 2019 By: Simone Liedtke - Writer

The Competition Commission has referred a case of alleged cartel conduct against packaging and paper companies Mpact and New Era Packaging to the Competition Tribunal for prosecution.

The two companies have been charged with fixing prices, dividing markets by allocating customers and tendering collusively in the market for the manufacture and supply of corrugated packaging paper products.

The referral follows an investigation initiated by the Competition Commissioner on May 16, 2016, against the companies.

The commission’s investigation found that from the 1980s to 2015, Mpact and New Era had an alleged agreement not to compete with each other for customers for the supply of packaging paper products. This was achieved by agreeing to allocate customers and ensuring that they did not bid in competition with each other in respect of the allocated customers.

The investigation also found that Mpact and New Era had allegedly rigged the bids they submitted to customers in order to prevent other market players from competing with them for the business of their allocated customers.

Competition Commissioner Tembinkosi Bonakele on Monday said cartel conduct affects most products, including the packaging of basic food stuff.

“It is largely the poor who bear the brunt of this manipulation of prices and division of markets,” he lamented.