Fin24

Oceana fined R35m for price-fixing

2012-05-09 13:21

Johannesburg - The Competition Commission has fined the Oceana Group [JSE:OCE] R35.7m in the latest of a series of price fixing findings, the commission said on Wednesday.

"Oceana has agreed to pay a penalty of R35 750 50 which represents 5% of its turnover derived from its pelagic fish (pilchard, anchovy and red eye) operations in South Africa in 2010," the commission said in a statement.

Oceana admitted that Oceana Brands, Foodcorp, Premier Fishing SA, Gaansbaai Marine, Terressan Pelagic Fishing, Paternoster Visserye, Pioneer Fishing and Saladanha Foods, as members of the South African Pelagic Fish Processors' Association (SAPFPA), agreed to fix prices paid to vessel owners/operators, skippers and crew for catching pelagic fish.

This was done through meetings and correspondence distributed by SAPFPA to its members and a standard formula applied to the price of fishmeal to determine the prices to be paid.

The commission said Oceana entered into agreements with its competitors - Pioneer Fishing, Premier Fishing and Saldanha Bay Canning - in the processing and canning of fish, and they shared information which gave rise to indirect fixing of the price of canned fish sold to consumers.

Oceana Brands and Pioneer Fishing also agreed to not compete with each other for suppliers of fish in Mossel Bay.

In 2006, Oceana entered into an agreement with Pioneer Fishing to fix the quota rental fees payable to three companies in Port Elizabeth for the use of their pilchard quota for the 2006 fishing season.

Oceana entered into agreements to allocate fishmeal customers and to fix the prices of fishmeal with its competitor, the SA Fishmeal Marketing Corporation.

Brimstone Investments Corporation [JSE:BRT] and Tiger Brands [JSE:TBS], both substantial shareholders in the Oceana Group, were signatories to a shareholders' agreement with Sea Harvest which contained a non-compete clause, the commission said.

"The commission concluded that the shareholders' agreement prevented Sea Harvest and Oceana from competing in the hake and pelagic fish markets, respectively, between 2000 and 2008," it said.

The settlement follows a complaint initiated by the commission in July 2008.

Pioneer Fishing applied for and was granted conditional leniency.

The agreement has been filed with the Competition Tribunal and will be set down for confirmation of the order there.

So far, the commission has fined Pioneer Foods Group [JSE:PFG] R195m for being part of a bread cartel, wire mesh companies R27m, and South African Airways R18.7m and Singapore Airlines R25.1m for price fixing on flights between South Africa and Hong Kong.

In terms of the Competition Act, the Competition Commission has the power to investigate restrictive business practices and abuse of dominant positions. 

Comments
  • kobus.hattingh.5 - 2012-05-09 13:31

    Fining these companies just aint good enough. They must be fined and closed down permanently.

      Gordon - 2012-05-09 13:47

      then who will catch your supper?

      warren.vanwyk.3 - 2012-05-09 15:12

      ... leaving how many families without an income? Think before you comment!

      George - 2012-05-09 15:35

      Nail all directors and board members for the next 5 years with no increaces and bonuses as well as share holders for not asking questions and getting answers with 75% of there returns

      warren.vanwyk.3 - 2012-05-09 15:50

      @ kobus.hattingh.5: Read John's comment below.

  • Tamaranui - 2012-05-09 13:32

    Some big businesses behave like organized crime in RSA. Why price fix, If the business is too difficult to create a profit under legal Business practices.....then just get out don’t collude.

      warren.vanwyk.3 - 2012-05-09 16:00

      Clearly you don't own a business coz you simply don't give up in difficult times, you adapt to the circumstances. I bet you have the loudest mouth against retrenchments when they happen.

  • Christopher - 2012-05-09 13:38

    Just a drop in the ocean.

  • dave.leverton - 2012-05-09 13:41

    And so the government get another R35 million to squander. They need to find a way of returning this money to the consumer - the ones who were prejudiced by the price fixing.

  • rbphiri - 2012-05-09 13:46

    Oceana has agreed to pay a penalty of R35 750 50 which represents 5% of its turnover derived from its pelagic fish. That percentage is merely water under the bridge, worst of all the price fixing inevitably affects us consumers. A fine is a mere slap on the wrist, I would opt for shutting down the company but labourers who are not aware of the matter at hand would lose jobs. We need strigent measures to monitor and curb this ongoing problem of price fixing.

  • Ted - 2012-05-09 13:50

    Good. They should now investigate the ANC for 'abuse of a dominant position'! Lol

      Tamaranui - 2012-05-09 13:58

      Now Fish to ANC.................

  • ismail.lunat.35 - 2012-05-09 14:03

    How much has The Competition Commission collected through these fines? And how does that filter down to the consumer that has been cheated? Or does this loot end up in the hands of the Govt officials?

      comurray - 2012-11-26 10:03

      Where do you imagine those huge bonuses for doing absolutely nothing year in and year out come from, just like ESCOM.?

  • Jacques - 2012-05-09 14:18

    I find this Amazing...What about Eskom being the only one out their. They just fix it correct and since their is no competition thats fine. Weird how gold and other commodities are fixed though or is that something completly different i suppose as with oil and petrol.

      GavinBu - 2012-05-09 15:25

      Jacques, Commodities are negotiated on a global platform! Supply and demand determine price, not government!\r\nUnfortunately for us (South Africa) we don't have our own Oil reserves and rely on other countries for our demand. If our demand was low, we'd pay less for oil, but unfortunately we do have a high demand and at the mercy of other countries. Sasol cannot supply our demand that's why we use imported oil! Imagine if Sasol sold cheaper fuel because they eliminate the need for imported oil, everyone would use Sasol effectively putting NATREF companies out of business, good thing, very bad thing! Sasol would never be able to satisfy the national demand, and would need to employ more people, build more refineries and so on, driving up the cost of fuel! Now on the Gold stage we do set the price, we supply 52% of the worlds demand, so there we benefit!

  • Andile - 2012-05-09 14:39

    And than they claim to be working hard for the wealth they have, where as all this time we have been exploited by rediculous prices. I just hope the fine will be put to good use though

  • Rodney - 2012-05-09 14:45

    SAME as with the bread, They paid the fine but the bread price did not come down so they made there money back in a few months.

  • Henk - 2012-05-09 14:53

    and again the money is going to the anc/ government and there will be NO benefits for the client who was robbed due to price fixing!

  • Bryan - 2012-05-09 15:18

    Exploiting the people for financial gain. Sis Sis sis

  • John - 2012-05-09 15:37

    They should set jail time for the CEO and MD's how are the masterminds in the price fixing. That should make them think twice.

  • Riad - 2012-05-11 10:06

    In order to nab this type of practise in the bud, maybe ‘The Compertition Commission” need to prosecute the people responsible for such practise in these companies as well……

  • Real Realist - 2014-06-02 11:39

    That is what BEE encourages! The ANC has taught them well!

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