SA's largest number plate manufacturer fined more than R16m for 'abuse of dominance' | Fin24
 
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SA's largest number plate manufacturer fined more than R16m for 'abuse of dominance'

Jun 27 2019 12:44
Fin24

SA's largest manufacturer and distributor of number plate blanks and embossing machines, Uniplate Group, has been ordered to pay more than R16m after the Competition Tribunal found that it had "abused its dominance".

"Uniplate had been using long term exclusive agreements to contractually oblige its customers, who do the actual embossing of number plates, when purchasing a Uniplate embossing machine to also purchase all of their number plate blanks and embossing materials from Uniplate," the Tribunal said in a statement.

"The exclusive supply agreements tied up customers for a period of 10 years and prevented the customer from switching to alternative suppliers of number plate blanks."

Embossing machines and number plate blanks are used together to produce the final number plate. Uniplate was ordered to pay R16 192 315.

Some of the long-term contracts also contained automatic renewal clauses and had no termination clauses, the Tribunal said. The case arose when the Competitions Commission received two complaints by a market competitor and one of Uniplate's customers.

"These exclusive agreements limited the ability of Uniplate’s rivals from accessing customers for number plate blanks in the market. Customers who were tied in these exclusive agreements by Uniplate were similarly unable to access competitor blanks even when competitors’ prices were lower.

"The Tribunal found that Uniplate strictly enforced its exclusive supply agreements and often threatened customers with litigation if they purchased or attempted to purchase their requirements from Uniplate’s rivals," it said.

While it was Uniplate's case that they had instituted exclusivity agreements to offer its embossing machines at a reduced price and that several efficiencies arose as a result, the Tribunal found that Uniplate was unable to substantiate its efficiency claims. 

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