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Competition Commission raids paper suppliers

Johannesburg - As part of an ongoing investigation into allegations of collusion, the Competition Commission on Thursday conducted a search and seizure operation at the Gauteng and Free State premises of New Era Packaging and Mpact.

During the operation the Commission intended to seize all documents and electronic data relevant to the investigation, which it is allowed to do in terms of the Competition Act.

The Commission claims to have reasonable grounds to suspect that New Era and Mpact have engaged in collusive practices in contravention of the act. The act prohibits competitors from reaching agreements to fix prices, allocate customers or rig tenders.

“Packaging paper products are an important input and certainly contribute to the costs of various products requiring paper packaging. As such, the Competition Commission takes allegations of collusion in this sector seriously," said Competition Commissioner Tembinkosi Bonakele.

"Once this investigation has been completed, we will prosecute any firm found to have acted in contravention of the Competition Act.”  

According to the Commission, New Era and Mpact are the largest producers of packaging paper products in South Africa. They produce packaging sheets, including kraft paper, containerboard and corrugated sheets, and convert these products into paper bags, cartons and boxes.

New Era and Mpact also sell sheet-fed packaging papers to independent converters who convert them into paper bags, cartons and boxes in competition with New Era and Mpact. These products are then sold to customers such as Simba, Enterprise Foods, Colgate and cement factories.

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