14 July 2017

South Africa: Chemical Companies Fined R37 Million for Cartel Conduct

Photo: kev-shine/Flickr
(file photo).

Two companies involved in the manufacturing and supply of key chemical input materials used to make detergents, cosmetics and toiletries have agreed to pay fines after admitting to price fixing and dividing markets.

The Competition Commission of South Africa said Investchem has agreed to pay a penalty of R23 423 155, while Akulu will pay an amount of R13 905 600.40 in terms of the settlement agreement each concluded with the Commission.

In December 2014, the Commission conducted a search and seizure operation at the premises of both companies as part of an investigation into cartel activities. The investigation uncovered, among others:

Between 2003 and 2013 Investchem and Akulu Marchon, which are competitors, agreed to fix prices for surfactants; and

Investchem and Akulu Marchon also divided the market by agreeing not to pursue each other's customers.

"These agreements contravened section 4(1)(b)(i) and (ii) of the Competition Act. Both Investchem and Akulu have agreed to future conduct that ensures this cartel conduct does not recur and that their respective customers are treated fairly without discrimination," the Commission said.

Investchem (Pty) Ltd (Investchem) and Akulu Marchon (Pty) Ltd (Akulu) are manufacturers and suppliers of a range of surfactant products widely used in the detergent, cosmetics and toiletry industries.

Surfactants (surface active agents) are one of many different compounds that may act as detergents, wetting agents, emulsifiers, foaming agents and dispersants.

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