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Commission clamps down on Toyota transport cartel

Mar 06 2017 15:36

Cape Town - The Competition Commission has referred for prosecution to the Competition Tribunal Kawasaki Kisen Kaisha (K-Line), a Japanese company operating in South Africa.

According to the Commission it is for price fixing, market division and collusive tendering involving the transportation of Toyota vehicles from South Africa to Europe, the Mediterranean Coast of North Africa and the Caribbean Islands via Europe, West Africa, East Africa and the Red Sea.

An investigation by the Commission found that K-Line, Mitsui O.S.K Lines (MOL), Nippon Yusen Kabushiki Kaisha (NYK) and Wallenius Wilhelmsen Logistics AS (WWL) fixed prices, divided markets and tendered collusively in respect of the shipment of Toyota vehicles in contravention of the Competition Act.

The Commission wants an order declaring K-Line to be liable for payment of an administrative penalty equal to 10% of its annual turnover.

The Commission’s investigation found that from at least 2002 to 2013 K-Line, MOL, NYK and WWL colluded on a tender issued by Toyota SA Motors (TSAM) to transport Toyota vehicles from SA abroad by sea. The Commission also found that K-Line, MOL, NYK and WWL agreed on the number of vessels that they were to operate on the SA to Europe routes at agreed intervals or frequencies.

The Commission found that K-Line, MOL, NYK and WWL agreed on the freight rates that they were to charge TSAM for the shipment of Toyota vehicles.

In 2015, NYK and WWL admitted to colluding on this tender and settled with the Commission. NYK, also a Japanese company, paid an administrative penalty of R103 977 927 and WWL, a Norwegian company, paid an administrative penalty of R95 695 529.

MOL, another Japanese company, was not fined as it was the first to approach the Commission and cooperated. MOL, NYK and WWL will cooperate with the Commission in prosecuting K-Line.

“South Africa is a strategic hub for the trade of goods in and out of the Southern African region. Any cartel by shipping liners in this region results in inflated prices for cargo transportation," said the Commissioner of the Commission Tembinkosi Bonakele.

"Cartels of this nature increase the costs of trading in the region and render the region uncompetitive in the world markets. Such cartels have the effect of significantly derailing the economic growth of the region.”

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