South Africa’s competition watchdog has today (19 January) signalled its confidence that a hearing into alleged price-fixing in the country’s dairy sector will go ahead – despite protest from some of the firms implicated in the case.
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Eight dairy processors have been accused of fixing the price of raw and processed milk and manipulating the market to hinder competition.
Companies alleged to have fixed prices include Nestle, Parmalat and Clover. One of the processors accused, Lancewood, has admitted its involvement in exchanging information on price.
Lancewood will pay a fine of ZAR100,000 (US$9,892) and will “co-operate fully” with the South Africa’s Competition Commission with the remainder of the investigation, the regulator said.
However, the main hearing into the Commission’s claims has been delayed after the processors at the centre of the case disputed the watchdog’s right to pursue the matter.
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By GlobalDataNandi Mokoena, manager of strategy and stakeholder relations at the Commission, told just-food that the companies had raised “procedural points” against the case.
Mokoena said, for instance that Clover had argued that the Commission had exceeded its one-year statutory time period for investigating the complaints. The Competition Tribunal and a competition appeals court found against Clover but the company has taken the matter to the Supreme Court of Appeals, Mokoena said.
“We are confident the hearing will go ahead. All parties are entitled to raise their legal arguments and argue where they feel aggrieved about procedural matters. We are keen though to begin this matter on its merits and would hope that this will happen sooner rather than later,” Mokoena insisted.
Estimates of the cost of the alleged price fixing for South African consumers and farmers were difficult to reach, although the processors alleged conduct had been “detrimental”, Mokoena said.
“Dairy processors have been extracting higher than competitive prices from consumers through their price fixing and market allocation conduct,” Mokoena said.
Officials at Clover could not be reached for immediate comment.
