A KwaZulu-Natal sunfoil oil company, Willowton Group, has agreed to pay R1 million fine for price fixing.
The Pietermaritzburg-based company will also spend another R100 million on public interest projects, including setting up a bursary fund for needy students worth R20 million, after admitting to price fixing and market division.
Willowton Group, whose products are widely used by households in South Africa, admitted wrongdoing and struck a deal with the Competition Tribunal last week.
It joins a growing list of South African companies found guilty of price fixing or reaching financial settlements with the Competition Commission across various industries, including food, construction, banking, and pharmaceuticals.
Penalties have ranged from millions to billions of rand, depending on the severity of the offense and the market impact.
As part of the deal, Willowton Group will establish an education trust and donate R20 million over five years in tranches of R4 million a year. The other R80 million would be spent supporting various public interest projects approved by the Competition Commission.
“The Willowton Group undertakes that an Education Trust will be set up as the Shoaib Moosa Education Trust or Dawood Hassam Moosa Education Trust. (The late Mr. Shoaib Moosa who passed away on 15 October 2024, lost his teenage son on 30 October 2022).
“The Education Trust will be set up as a Bursary Fund and the Willowton Group will donate a total amount of R20 million over a 5-year period (that is, R4 million per year for a period of 5 years),” the Tribunal said.
These funds will be available for historically disadvantaged tertiary education students in need of financial support and from underprivileged schools.
“The recipients of such bursaries shall comprise at a minimum, 60% female students. The Willowton Group undertakes to, within 90 days of confirmation of this agreement as an order of the Tribunal, advertise in national newspaper and/or electronic media as well as social media platforms the details of the Bursary Fund inviting applicants to submit applications,” the Tribunal added in its statement.
Last week, the Competition Tribunal confirmed a consent agreement between the Willowton Group and the Competition Commission, ending prolonged litigation between the parties since 2016.
The consent agreement, confirmed as an order by the Tribunal, ends years of legal disputes over allegations of price fixing and market division in the edible oils sector.
The case dates back to December 2016 when the Commission launched an investigation into Willowton and other firms in the edible oils sector, for potential contravention of the Competition Act.
The investigation focused on claims of collusion to fix prices and divide markets for edible oils, including baking fats and margarine, allegedly going back to 2007.
Despite a series of legal challenges by Willowton and protracted litigation, both parties have reached an agreement, which the Tribunal has confirmed as an order.
Since 2000, several companies in South Africa have been found guilty of price-fixing, primarily investigated by the Competition Commission of South Africa and penalized by the Competition Tribunal.
Below are some notable cases:
- Bread Price-Fixing Scandal (2007)
– Companies Involved: Major bread producers, including Tiger Brands, Pioneer Foods, and Premier Foods.
– Details: These companies were found guilty of colluding to fix the price of bread, a staple food, leading to inflated prices for consumers.
– Penalties:
– Tiger Brands: Fined R98 million.
– Pioneer Foods: Fined R250 million (later reduced to R195 million as part of a settlement).
– Premier Foods: Fined R45 million. - Construction Industry Collusion (2013)
– Companies Involved: Several major construction firms, including Aveng, Murray & Roberts, WBHO, and Group Five.
– Details: These companies colluded on tenders for large infrastructure projects, including stadiums for the 2010 FIFA World Cup.
– Penalties:
– Companies collectively fined over R1.4 billion.
– Some companies agreed to pay penalties and contribute to a development fund for small businesses. - Foreign Exchange Trading Cartel (2017)
– Companies Involved: Major banks, including Standard Chartered, Standard Bank, Absa,, and Investec.
– Details: These banks were accused of manipulating the rand-dollar exchange rate.
– Penalties:
– Standard Chartered: Fined R 42.7 million.
– Other banks are still under investigation or negotiating settlements. - Steel Price-Fixing (2010)
– Companies Involved: ArcelorMittal South Africa and others.
– Details: ArcelorMittal was found guilty of fixing steel prices, which affected industries like construction and manufacturing.
– Penalties:
– ArcelorMittal: Fined R1.5 billion (later reduced to R1.1 billion on appeal). - Medicines Price-Fixing (2003)
– Companies Involved: Pharmaceutical companies, including Adcock Ingram and Bristol-Myers Squibb.
– Details: These companies were found guilty of fixing the prices of essential medicines.
– Penalties:
– Fines totaling R3.5 million were imposed. - Maize Meal Price-Fixing (2008)
– Companies Involved: Pioneer Foods, Tiger Brands, and Premier Foods.
– Details: These companies colluded to fix the price of maize meal, another staple food.
– Penalties:
– Pioneer Foods: Fined R250 million (later reduced as part of a settlement).
– Other companies also faced significant fines. - Cement Price-Fixing (2009)
– Companies Involved: PPC, Lafarge, and NPC-Cimpor.
– Details: These companies were found guilty of fixing cement prices, impacting the construction industry.
– Penalties:
– Fines totaling R150 million were imposed. - Fertilizer Price-Fixing (2010)
– Companies Involved: Omnia Fertilizer, Sasol, and Yara South Africa.
– Details: These companies colluded to fix the prices of fertilizers, affecting the agricultural sector.
– Penalties:
– Fines totaling R250 million were imposed.
9. Glass Price-Fixing (2012)
– Companies Involved: Consol Glass and Nampak.
– Details: These companies were found guilty of fixing the prices of glass products.
– Penalties:
– Fines totaling R20 million were imposed.
- Automotive Bearings Cartel (2016)
– Companies Involved: SKF South Africa, Bearing Man Group, and Bearing International.
– Details: These companies colluded to fix the prices of automotive bearings.
– Penalties:
– Fines totaling R100 million were imposed.
