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Precast concrete cartel ordered to pay 10% of turnover

Aug, 02 2010

(Johannesburg, South Africa)  --  The Competition Tribunal will, this week, conduct a hearing to decide on the size of a penalty to be imposed on two members of a precast concrete cartel, Southern Pipeline Contractors (SPC) and Conrite Walls.

The cartel fixed prices of pipes, culverts and manholes, allocated customers and divided the market for the production and distribution of pipes, culverts and manholes and engaged in collusive tendering in the supply of all of the above.

And while SPC and Conrite Walls acknowledged that they were members of the cartel but they have opposed the quantum of the penalty.

SPC said that the Commission's suggestion of a 10% penalty on total turnover was not appropriate and it is set to argue for an appropriate penalty.

SPC is a joint venture between two French companies, SOGEA SATOM and Compocentre doing business in Gauteng.

Conrite Walls is a private company trading in Kwazulu-Natal. The group also accepted monthly payments, of more than R1m in total, from Rocla and D&D to refrain from entering the pre-cast manhole product market in Durban.

Conrite has opposed a penalty calculated on 10% of total turnover. It accepted however, that a penalty of 10% of affected turnover would be inappropriate because it would amount to little more than R130 000. The group will instead, propose the following total penalty amount R1.35m, as opposed to that suggested by the Competition Commission namely 10% of Conrite's annual turnover.

In 2007 Rocla, a producer of precast concrete informed the Commission of a cartel that had been operating since 1973 in Gauteng, KZN and Western Cape. Rocla applied for leniency and provided most of the information on the cartel to the Commission.

The hearing will take place on August 2-3.


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