Tag: price-fixing

By Theto Mahlakoana for EWN

The Competition Commission said that two companies partnered to overcharge the police by over R14-million when supplying it with 10 000 units of 25-litre hand sanitisers.

In its opening remarks at the competition tribunal hearing underway virtually, the entity’s Maya Swart further claimed that the companies – Bluecollar Occupational Health and Ateltico Investments – gained excessive profits by adding a gross profit margin of 54%.

This was one of several cases which were before the commission over COVID-19 excessive pricing.

Swart said that Bluecollar’s massive overcharge was not even comparable to the Dis-Chem price gouging matter which was heard last year.

READ: Dis-Chem found guilty of contravening Competition Act over face mask prices

The company – described by its lawyers as a small business which had no prior experience in dealing with hand sanitisers – is accused of charging the police excessive prices for bulk sanitisers between March and April of last year.

The commission claims that Ateltico funded Bluecollar for the procurement of the sanitisers with a view of splitting the profits 60/40.

Swart explains: “That’s an overcharge of R1,433.69 per unit. That’s a massive overcharge when you compare it to other price gouging cases.”

The companies have disputed the commission’s version of events, saying that the prices included transportation among other costs.

 

Schools involved in price-fixing scandal

The Competition Commission says they have extended their probe into school uniform price fixing to the rest of the country.

The commission says this decision comes after they have received nine complaints since the initial reports in January.

The commission says the investigation will focus on all schools in the country including private schools such under Curro, Advetech and Kayalami, who were among those complained about.

The complaints have come from businesses who have foreclosed because of exclusive contracts schools have with some suppliers and parents who are forced to buy from certain suppliers.

Spokesperson Sipho Ngwema says they have found merit in some of these complaints.

“We are continuing to probe others and once we are finished we’ll take a decision on whether to refer certain schools and contracted business the competition tribunal. If there are other means to address this before the tribunal, we are open to that.”

By Tebogo Tshwane for Eyewitness News

Russia’s Federal Antimonopoly Service (FAS) has opened a case against a subsidiary of Mondi for violating what it says are “elements of the antimonopoly laws”.

FAS says it “suspects” Mondi Syktyvkar, which it describes as Russia’s largest paper producer, of failing to comply with aspects of federal law; in particular “monopolistically fixing the high price for offset paper”.

Mondi has said that it had not received “any FAS notification to this effect” and had no further details of the probe.

“Mondi is committed to complying with all applicable antimonopoly laws and believes it has not violated any such laws.”

Lora Rossler, group head of communications at Mondi, said that the group’s offset uncoated fine paper sales in Russia comprised about 10% of its Europe and international uncoated fine paper sales, or “less than 2%” of group sales.

Mondi’s share slipped 2.2% to close at R277.95 on the JSE.
“A recently observed increase of prices for offset paper has elements of violating the antimonopoly law,” Nelli Galimkhanova, head of the FAS department for industry control, said in a statement on the authority’s Web site on Friday.

“Upon considering all case circumstances and the arguments given by the respondent, the FAS commission shall make a decision,” she says.

FAS says it found last year the costs of offset paper rose about 50% for Russian consumers, but this did not match the change in the costs of production and sale of such paper.

It had earlier initiated inspections of Russia’s largest cellulose and paper industry makers.

Offset paper refers to paper used for printing books and magazines and not to single office-style paper for photocopying.

FAS also says it was continuing to “watch the situation” in Russian cellulose-and-paper markets, and that it monitored costs on a quarterly basis.

Justin Jordan, equity analyst at Jefferies International in London, says Russian authorities had not contacted Mondi formally.

“What happens from here? Likely nothing, in Jefferies’s view. Worst case scenario, a modest fine,” he says.

Jordan says that Mondi had increased offset reel paper prices by 25% in Russian currency terms last year, due to domestic Russian cost inflation.

However, he says that market sentiment was the “real issue here”, following an earlier European Union investigation into possible price-fixing in industrial sack markets.

Mondi last month said it had not been affected by unannounced inspections at several companies in the European kraft paper and industrial bags sector.

By Mark Allix for www.bdlive.co.za

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