War brewing between marble-granite suppliers

Johannesburg – A supplier and installer of granite and marble stone is taking on an industry wholesaler over alleged anti-competitive behaviour.

According to 17-year-old company, Sangengalo Marble & Granite, quartz surface manufacturing company Caesarstone has allegedly engaged in anti-competitive behaviour effectively making it a monopoly in the industry.

Neville Owen, founder and CEO of Sangengalo Marble & Granite, said Caesarstone approached his company in August and September this year with a contract that would limit the company to selling Caesarstone products only.

The offer would also prohibit Sangengalo from importing their own range of engineered stone, selling other brands while exclusively declaring Caesarstone as the brand of first-choice.

“In return for this, Sangengalo Marble & Granite would be included in their ‘Caesarstone Accredited Fabricator’ programme. This would provide them with a significant discount on Caesarstone products, ensure project and residential leads are provided to them, together with other benefits,” Owen explained in a statement.

Sangengalo is “of the conviction” that this contract which was also offered to other industry players, is anti-competitive as it prevents “fair offering” of economic and effective alternatives in the South African market, he said. 

Also irking Sangengalo was Caesarstone’s advertising of its accredited fabricator programme, which it believes is misleading.

“It is primarily about protecting their market share by ensuring fabricators do not import their own engineered stone, enforcing adherence to recommended Caesarstone Retail Prices, and promoting exclusive loyalty to the Caesarstone brand,” said Owen. Sangengalo plans to take this matter up with the Advertising Complaints Commission.   

Sangengalo had filed a complaint with the Competition Commission on October 25 as they felt that signing the contract offered by Caesarstone was not the right thing to do, even though other processors Sangengalo had engaged with confirmed they had, Owen told Fin24 by phone.

Owen said that Sangengalo had been a client of Caesarstone for 15 years. He explained that Sangengalo decided to issue the press release was because it was necessary to make the public aware. He said that he had also issued the release to Caesarstone.

But Caesarstone’s Managing Director Rudi Eggers hit back with a statement against the allegation, declaring that the Caesarstone Fabricator Program is designed to protect the brand and to ensure that Caesarstone’s products are brought to consumers in the “most efficient manner” in terms of price and quality.

“We are confident that our program does not transgress competition legislation.”

Eggers added that Caesarstone would cooperate with the Competition Commission, if the need arose.

Spokesperson of the Competition Commission Sipho Ngwema told Fin24 there was nothing on their system regarding the complaint. 

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter: Fin24’s top stories