Competition Tribunal wants Allens Meshco case reopened

Johannesburg - The Competition Tribunal said on Tuesday that it has approved the Competition Commission’s application to reopen the Allens Meshco case.

This would be to provide the Tribunal with additional information on which the Allens Mescho Group (AMG) will be held liable if AMG is found to have contravened the Competition Act.

In January 2007, the Commission referred a cartel case to the Tribunal against Allens Mescho, Wireforce Steelbar, Hendok, Galvwire, Independent Galvanising and Meshrite. The Commission alleged that the respondents directly or indirectly fixed a purchase or selling price in respect of lightly galvanised wire, nails, wire and various wire products.

During July 2008 Consolidated Wire Industries (CWI), a subsidiary of Scaw South Africa, admitted that its employees participated in price-fixing meetings with their competitors namely Cape Gate, Allens Meshco and Hendok. They agreed on a national price list for wire and wire products, on adjustments to the national price list and in collusive tendering of cable armouring wire.

CWI applied for leniency. CWI and Cape Gate are alleged to have also agreed not to target each other’s customers.

Evidence gathered by the Commission confirms that, from about 2001 to 2008, the respondents contravened the Competition Act by engaging in price-fixing, market allocation and collusive tendering. The tenders involved include tenders from Harmony Gold, African Cables and Malasela Technologies.

The Allens Meshco companies reported a zero turnover by 2015. Therefore, the issues to be argued are which year the administrative penalty should apply to and to determine which firm or firms the penalty should be directed.

Testimony heard by the Tribunal stated that some of the group's ten companies have either merged with other companies, deregistered, or are in the process of deregistering. The comanies are Allens Meshco; Hendok; Wire Force; Agri Wire; Agri Wire North; Agri Wire Upington; Cape Wire; Forest Wire; Independent Galvanising and Associate Wire Industries, as well as a separate company Cape Gate. Cape Gate has cooperated with the Commission in the investigation.  

The Tribunal said as a body with statutory functions it “would be required to obtain the evidence and conduct the hearing in an inquisitorial manner” should the Commission not be allowed to reopen its case.