Cartels

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Submitted By BandileMnguni
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In February 2009 was the day reality caught up with nine firms who have run a hard core cartel in pre-cast concrete products since 1973. On this day the Commission referred yet another cartel case to the Competition Tribunal for adjudication, citing Rocla, Aveng as a holding company (hereafter referred to as Infraset), Southern Pipeline Contractors (SPC), Cobro, Concrete Units, Cape Concrete, Concrite Walls, Grallio, Craig Concrete, and D&D Concrete (hereafter referred to as “the Rocla matter”). On the same day as the Commission referred these charges to the Competition Tribunal, the Commission settled certain particulars of the complaint with Aveng, including an administrative penalty of R46 million.
Rocla, a subsidiary of Murray & Roberts, was granted conditional leniency by the Commission after coming forward in December 2007. Rocla complied with the Commission’s Corporate Leniency Policy (CLP) in providing information which implicated itself and its competitors in price fixing and fixing of trading conditions, market allocation and collusive tendering in the market for pre-cast concrete products such as pipes, manholes and culverts. This information revealed a textbook example of a classic cartel, complete with well written modus operandi, sanctions for non-compliance, payments to keep competition out of the market, intent and ability to raise prices and effective monitoring mechanisms.
It all began in 1973 when enforcement of competition laws was not as rigorous as it is has now become under the democratic dispensation. Rocla embarked on a strategy to cooperate with its competitors rather than compete with them, buy out any firm that posed a serious threat to its market share, and split up regions within which each firm could operate (produce and sell precast concrete products), whilst at the same time reserving certain regions for itself. Over a period of…...

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