Outcome of Tribunal hearing Wed, 28 June - further documentation required for DStv Media Sales settlement

Tribunal confirms Bothaville Milling’s R4 million settlement agreement

The Competition Tribunal has approved a R4 211 385.90 settlement agreement with Bothaville Milling for its role in price fixing. The administrative penalty is 5% of Bothaville’s annual turnover for the financial year end February 2007.

Bothaville and other milling companies held meetings and had telephone discussions where they agreed to fix the price of milled wheat products, create uniform price lists, and fix the date when prices should be increased.

The Commission said the collusive conduct, which is in contravention of section 4 of the Competition Act, took place between 1999 and 2007.

In terms of the settlement agreement Bothaville Milling undertakes the following:

It confirms that the mentioned conduct has ceased; it will develop a compliance law programme and provide a copy to the Commission within 60 days of the confirmation of the consent agreement.

Other settlement concluded in this matter are:

  • Blinkwater Mills- R10 112 504.20 (5% of annual turnover for 2007)
  • Keystone Milling- R6 730 349 (3% annual turnover for 2009)
  • Carolina Rollermeule, R 4 417 547.00 (5% of annual turnover for 2009)

The Commission has also concluded settlement agreements with Foodcorp, which paid an administrative penalty fee of R88.5m, Pioneer Foods which paid a penalty of R500m. Tiger Brands and Premier Foods were granted conditional immunity in terms of the Commission’s leniency policy.

The complaint was first initiated when the Commission received a corporate leniency application from Premier Foods in 2007, which was corroborated by a further leniency application filed by Tiger Brands in the same year. The Commission subsequently conducted its probe into collusive conduct in this sector.

 

Further documents requested for DStv Media Sales in R180m administrative penalty hearing

The Tribunal has requested further documents with regards the DStv Media Sales (DMS) consent agreement heard today, Wednesday 28 June.

DStv Media Sales has admitted to colluding with other media groups on pricing, discounts and payment terms for advertising space. The matter relates to a November 2011 investigation which it was found that, through the Media Credit Co-Ordinators (MCC), various media companies agreed to offer similar discounts and payment terms to advertising agencies that place advertisements with MCC members. Accredited agencies were allegedly given a 16.5% discount on payments made within 45 days while non-accredited agencies received a 15% discount.

In terms of the consent agreement DStv Media Sales agreed to an accumulative remedy of R180 262 599. This includes an administrative penalty amounting to R22 262 599.

In terms of the imposed penalty, excluding the administrative penalty:

DStv Media Sales undertakes to contribute R8 000 000 to the Economic Development Fund over three years from the date of confirmation of this consent agreement to enable the development of  black owned small media or advertising agencies requiring assistance with start-up capital and to assist black students requiring bursaries to study media or advertising, among others. This will be managed by the Media Development and Diversity Agency (MDDA) and audited annually.

DStv Media Sales further agreed to provide 25% in bonus airtime for every Rand of airtime bought by qualifying small agencies. This is intended to help smaller agencies participate in the market. The bonus airtime would be provided for a period of three years with a total annual airtime cap of R50 000 000.

 

The merger has been approved regarding WBHO Construction and Faku Family Enterprises with target companies Grindrod Rail Construction (SA) (Pty) Ltd and Grindrod Rail Construction Company (Pty) Ltd

WBHO Construction and the Faku Family Enterprise will acquire Grindrod Rail Construction (Pty) Ltd (GRC SA) and Grindrod Rail Construction Company (Pty) Ltd (GRCC) from Grindrod Holdings (South Africa) (Pty) Ltd (Grindrod Holdings). The merger has been approved without conditions.

The relevant market in this merger is the provision of civil engineering services for the rail sector.

WBHO Construction is a wholly-owned subsidiary of Wilson Bayley-Ovcon Limited (WBHO). WBHO is active in the construction industry where it offers services in building and civil engineering, roads and earthworks, projects and construction materials.

The Faku Family Enterprise (“FFE”) is an investment holding company with subsidiaries active in the construction, property, coal and petrochemicals and related logistics services sectors. It does not provide civil engineering for the rail construction sector.

Grindrod Rail Construction (SA) is a wholly-owned subsidiary of Grindrod Rail Construction Company which is wholly owned by Grindrod Holdinngs GRC SA’s services include construction, rehabilitation, electrification and maintenance of rail networks. Within the public sector, GRC SA engages with local and international large industrial or mining clients that require physical rail infrastructure and associated civil works for mines or manufacturing plants.

GRCC is a wholly-owned subsidiary of Grindrod Holdings and is an investment holding firm which is active through its subsidiaries.

 

MIC Investment Holdings to acquire Metrofile

The Tribunal has approved the merger of MIC Investment Holdings (Pty) Ltd (MIC) and  Metrofile Holdings Limited (Metrofile).

MIC is an investment company and is a wholly owned subsidiary of the Mineworkers Investment Company; and Metrofile handles physical and digital information and record management. The Tribunal has approved the merger without conditions.

The Mineworkers Investment Company, which owns MIC, is controlled by the Mineworkers Investment Trust (MIT) and is referred to as the MIC Group. The MIC Group invests in cash generative assets that allow it to pay a dividend to MIT to fund social upliftment programs for members of the National Union of Mineworkers.

The Metrofile Group provides services and products which include records archiving, storage, retrieval and destruction; conversion of paper and analogue records to digital formats; and storage of backup media.

Issued by:

Chantelle Benjamin

Communications: Competition Tribunal   

Tel (012)394 1383                                     

Cell: +27 (0) 73 007 5603  

Twitter: @comptrib                                       

E-Mail: chantelleb@comptrib.co.za

 

On Behalf Of:

Lerato Motaung                                                   

Registrar: Competition Tribunal                                        

Tel: (012) 394 3355                                             

Cell: +27 (0) 82 556 3221                                              

E-Mail: LeratoM@comptrib.co.za