Unilever faces prosecution for cartel activity in South Africa

The South African Competition Commission referred a cartel case on Wednesday to the Competition Tribunal for prosecution of Unilever South Africa and Sime Darby Hudson Knight (Sime Darby).

The two companies contravened the Competition Act by dividing the markets through allocating specific types of products and customers goods in the market for the manufacturing and supply of bakery and cooking in the country.

Investigations by the Competition Commission revealed that between 2004 and 2013, the two companies entered into a Sale of Business agreement, which contained a clause in which they agreed not to compete with each other in respect of certain pack sizes of margarine and edible oils.

"Food and agro-processing is an important focus area for the Competition Commission, and we are determined to root out exploitation of consumers by cartels that are so prevalent in this sector," said Commissioner Tembinkosi Bonakele.

The Competition Commission wants Unilever to pay 10 percent of its annual turnover as a fine for the cartel case.

Sime Darby settled with the Competition Commission last July, and was then fined 2.7 million U.S. dollars for the anti-competitive conduct. It was also forced to invest 10.4 million dollars in a new packaging and warehousing facility. Endit