Johannesburg - African price-fixing offenders such as Tiger Brands and Sasol may face consumer- inspired class action suits running into hundreds of millions of rands.

Consumer rights body the National Consumer Forum (NCF) is lobbying government to financially support such legal challenges.

"The fines levied against corporations that fix prices should be used to redress the damages suffered by consumers," says NCF chairperson Thami Bolani.

Large companies have recently been fined hundreds of millions of rands for contravening the Competition Act. The money raised is transferred to the national revenue fund.

Figures provided by corporate and commercial law firm Werksmans show that since 2004 the competition authorities have levied R660m in fines for cartel offences.

Bolani's call for the companies to be sued by members of the public comes as the country?s legislators consider a bill that may see managers of offending companies imprisoned for breaches of competition law.

Prison sentences are seen as providing a particularly powerful deterrent. Three British businessmen were last year sentenced to up to three years in prison after pleading guilty to price-fixing.

Bolani says the Competition Commission has been doing a good job investigating and prosecuting corporate offenders and ensuring that they pay the fines.

"Now we need to take the next step and ensure that consumers take legal action to get redress for the damages they have endured," he says.

"This could take the form of legal class actions against price- fixing companies to get them to pay back the illegal profits that they have made from consumers.

"While the offenders have paid the fines, this is only the punishment for breaking the law. The fines have nothing to do with the millions of rands these companies have stolen from the pockets of consumers."

Such legal action is likely to be prolonged and expensive, however, and the consumer movement in South Africa is not sufficiently resourced to fund this action independently.

Bolani says the NCF wants government to use some of the money from price-fixing fines to pay for the lawsuits.

"The tragedy of the current situation is that price-fixing companies make a mockery of their fines by simply passing on the cost to consumers.

"The way that food prices have failed to come down in recent months - despite the fuel price drop and interest rate cuts - shows that there is not enough competition to ensure affordable prices for the poor," he says.

In Brazil the law entitles consumer bodies to take class action and the state supports these cases financially so that legal costs are not an inhibiting factor.

Mmadika Moloi, an associate at Werksmans, says in light of the seemingly effective weeding out of cartels by the commission, many companies are voluntarily performing competition compliance audits on their high-risk business units.

"They are implementing compliance review programmes and educating staff about the dangers of cartel behaviour which might even unwittingly be in the workplace. As the old adage goes, prevention is better than cure," she says.

Werksmans competition law specialist Dominique Arteiro says a Competition Tribunal consent order would have to be obtained before any class action suit can even be considered.

Arteiro says cartels are a cardinal sin in competition. He says a cartel is comprised of two or more competitors in a market co-operating to achieve an unlawful anti-competitive effect.

He says cartels are usually characterised by members' cloak-and-dagger behaviour and are usually uncovered by a whistle-blower or during the commission's investigation into mergers.

In terms of the law, a firm involved in an unlawful collusive arrangement with its competitors can be fined up to 10% of its annual turnover.

Cartels have been uncovered in the airline, steel, milk, bread, gas, petroleum and private health care sectors. The commission is investigating cement makers and supermarket chains.

However, spokesperson for the supermarkets sector Mncane Mthunzi, chief executive of the Consumer Goods Council of SA, says the sector remains committed to co-operating fully with the investigation.

"As we have said in the past, there is nothing to hide," he says.

- City Press