Competition commission raids fats and oils manufacturers

Competition-Commission-fats-and-oils-raidOn 8 December 2016, the Competition Commission conducted a search and seizure operation at the premises of five companies involved in the manufacture and distribution of refined edible oils, baking fats and margarine in South Africa. The companies operate in Gauteng and KwaZulu-Natal provinces.

According to a statement, the commission has reasonable grounds to suspect that Wilmar Continental Edible Oils and Fats, DH Brothers Industries t/a Willowton Oil and Cake Mills, FR Waring Holdings, Africa Sun Oil Refineries and Epic Foods have engaged in cartel conduct. This includes price-fixing in the market for the manufacture and distribution of refined edible oils including baking fats and margarine. The alleged conduct is believed to have started before 2007 and is still on-going.

The search and seizure operation is conducted as part of an ongoing investigation, which was initiated by the commissioner. During the search the Commission seized documents, records and electronic data which will be analysed, together with other information gathered, to determine whether these companies have contravened the Competition Act.

The Commission obtained search and seizure warrants from the High Courts in Gauteng and KwaZulu-Natal, respectively, in terms of section 46 of the Competition Act. The operation is being conducted with due regard to the rights of all the affected persons.

‘Food and agro-processing is an important focus area for the Competition Commission. We are determined to root out exploitation of consumers by cartels that are so prevalent in this sector. We have, in particular, been monitoring developments in the fats and oils markets and what we see is worrisome,’ says the commissioner of the Competition Commission, Tembinkosi Bonakele.

In a statement released by The Willowton Group, the company confirmed that the offices of the Willowton Group as well as several other competitors and suppliers were investigated by the Competition Commission. The stated intention of the investigation is as a result of the Competition Commission’s investigation into a recent merger within the industry as well as another impending merger. These mergers and impending merger are between suppliers and competitors of Willowton Group. During the commission’s investigations into these mergers, the Willowton Group as a competitor and customer fully responded to the commission’s investigations into these mergers.

‘We have complied with all requests of the investigators and are extending our assistance in finalising their investigation. The Willowton Group is fully committed to sound corporate governance as well as fully complying with all laws and regulations of the countries in which we operate.

‘There have been previous investigations into the company’s activities. We fully complied with these investigations, and there was no evidence found of any wrong doing on the part of the company. Allegations of price collusion and cartel activities among suppliers and competitors in the edible oil market have been made by the commission and these allegations again are refuted by the company.   

‘The Willowton Group is committed to providing its customers with quality products at value for money pricing and in recent months has extended its manufacturing operations into both Zimbabwe and Zambia,’ a spokesperson for the group concludes.