The Commission in South Africa has referred to the Competition Tribunal for prosecution woodbased panel companies, KAP Diversified Industrial and Sonae Arauco South Africa, together with Steinhoff International Holdings, for cartel conduct.
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KAP Diversified, previously known as PG Bison and Sonae agreed to increase their prices for wood-based panel products by same percentage amount at the same time.
These companies also agreed on the price that they charged their top customers.
KAP Diversified and Sonae met frequently from 2009 to at least 2016 in order to discuss and agree on the percentage amount of the price increases and the dates to effect such increases.
KAP Diversified and Sonae are the largest manufacturers of wood-based panel products in South Africa.
Wood-based panel products include particle boards, medium-density fibreboard (MDF), chipboards and melamine boards.
These products are used to build commodities such as cupboards, furniture, cabinets and caskets amongst others The Commission’s investigation of this matter followed a tip-off from a member of the public, which led to a dawn raid being conducted at the premises of KAP Diversified and Sonae in March 2016.
During the period of the cartel conduct and at the time of the investigation, KAP Diversified was under the control of Steinhoff.
The Commission has asked the Competition Tribunal to impose an administrative penalty of 10% of KAP Diversified and/or Steinhoff’s annual turnover.
The Commission does not seek administrative penalty against Sonae as Sonae settled with the Commission by admitting liability and agreeing to pay R46,9 million administrative penalty. Sonae has also agreed to testify against KAP Diversified and/or Steinhoff.
The settlement agreement between the Commission and Sonae was confirmed by the Competition Tribunal on 06 November 2019.
“Cartels rob consumers of competitive prices and remain a priority for the Competition Commission. This cartel had a direct impact on prices,” Competition Commissioner, Tembinkosi Bonakele said. ■
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