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THEE - The Competition Commission - Media Release
Media Release
26 August 2010
Scrap merchants to face collusion charges in Tribunal
The Competition Commission referred a collusion case against
13 scrap merchants in the markets for the supply of ferrous
and non-ferrous scrap metal to the Tribunal on 24 August
2010.
The merchants face allegations that they colluded to set
prices, divide the markets, and fix trading conditions. This
was done through various agreements, arrangements and
understandings amongst the respondents.
The Commission`s investigation was initiated on 11 August
2006 following allegations of exclusive dealing, price
fixing, fixing of trade conditions, market allocation and
collusive tendering in relation to ferrous and non-ferrous
scrap metal.
The scrap merchants facing these allegations include SA
Metal and Machinery (Pty) Ltd ("SAM"), National Scrap Metal
(Pty) Ltd ("NSM"), Ben Jacobs Metals (Pty) Ltd ("Ben Jacobs
Metals"), Power Metals Recyclers (Pty) Ltd ("PMR"),
Universal Recycling (Pty) Ltd ("Universal"), Ton Scrap (Pty)
Ltd ("Ton Scrap"), Scaw South Africa (Pty) Ltd ("Rand
Scrap"), Scaw Metals Group (Pty) Ltd ("Scaw"), Amalgamated
Scrap Metals Recycling CC ("AMR"), Abbedac Metals (Pty) Ltd
("Abbedac"), Ben Jacobs Iron and Steel (Pty) Ltd ("Ben
Jacobs Iron and Steel"), Cape Town Iron and Steel Works
(Pty) Ltd ("Cisco") and The New Reclamation Group (Pty) Ltd
("Reclam").
In an agreement concluded between Reclam, SAM and NSM in
October 2000, these parties agreed to divide the market and
fix trading conditions in respect of both ferrous and non-
ferrous scrap metal for a period of five years which was
renewable for a further five year period. Through this
agreement the participants allocated customers, suppliers,
territories and type of goods (either ferrous or non-ferrous
scrap).
Reclam, Universal, Ton Scrap, Ben Jacobs Iron and Steel and
Rand Scrap agreed to fix prices by developing a pricing
formula and agreeing on its adjustment together with the
large scrap consumers. This was facilitated through
meetings, e-mail & telephonic discussions, and arrangements
between employees of large scrap merchants and large scrap
consumers. In addition, they divided the markets by
allocating suppliers and agreeing not to poach each others`
suppliers and scrap generators.
In another agreement Reclam, PMR and/or Ben Jacobs Metals
and SAM agreed to fix prices and divide the market in
respect of non-ferrous scrap metal.
All of the respondents are involved in the collection,
processing and supply of scrap metal.
The Commission has asked the Tribunal to impose an
administrative penalty of 10 percent of annual turnover on
each of the firms involved, except PMR, Cisco, Scaw, Rand
Scrap and Reclam. Scaw and Rand Scrap were granted
conditional immunity from prosecution by the Commission
provided that they fully co-operate in the Commission`s
investigation and prosecution of this case. Reclam and PMR
settled with the Commission prior to the referral and the
settlement agreements were confirmed by the Tribunal on 7
May 2008 and 14 July 2010 respectively. No relief is sought
against CISCO in these proceedings as it is implicated in
the restrictive supply agreement concluded with NSM.
ENDS
Further Info:
Oupa Bodibe, Manager: Advocacy & Stakeholder Relations
012 394 3267/082 563 6970/ oupab@compcom.co.za
Molebogeng Taunyane, Coordinator: External Communications
012 394 3289/082 646 8663/ molebogengt@compcom.co.za
Date: 07/02/2011 06:31:24 Supplied by www.sharenet.co.za
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