The Competition Tribunal (“Tribunal”) has confirmed, as an order, a settlement agreement in terms of which the fast-moving consumer goods firm, Unilever South Africa (Pty) Ltd (“Unilever”) agrees, among others, to pay a R16 million administrative penalty (“the penalty”).
 
Unilever and Sime Darby Hudson Knight (Pty) Ltd (“Sime Darby”) were accused by the Competition Commission (“Commission”) of contravening section 4(1)(b)(ii) of the Competition Act by engaging in market division in the edible fats and oils industry in South Africa between 2004 and approximately 2012. The Commission alleged that Unilever and Sime Darby concluded a suite of agreements in terms of which, among others, Sime Darby was precluded from supplying products of a particular classification, pack size and format to specific customer channels.
 
The Commission and Sime Darby concluded a settlement which was confirmed as an order of the Tribunal in July 2016. While Unilever defended the allegations levelled against it by the Commission, it has subsequently also negotiated a settlement with the Commission.  
 
The Tribunal’s confirmation of the Unilever settlement agreement follows a hearing on 3 October 2023 during which the Tribunal exercised its inquisitorial powers to interrogate the terms of the agreement and heard submissions from both the Commission and Unilever.
 
In terms of the settlement agreement, Unilever agrees to pay the penalty (which was a negotiated figure between Unilever and the Commission, and not a penalty-imposed sum) and commits to the following additional remedies:
 
Enterprise Supplier Development Fund
 
Unilever will establish and administer an Enterprise Supplier Development Fund valued at R40 million. The Fund will provide interest-free business loans to qualifying black-owned entities in the manufacturing, logistics and wholesale industries that meet Unilever’s credit and selection criteria. It will also provide interest-free business loans to qualifying black-owned firms requiring start-up funds to enter the logistics, wholesale and distribution industries.
 
Local procurement
 
Unilever will increase the aggregate annual value of its local procurement of products and services from entities operating in South Africa by a minimum of R340 million for four years.
 
Donation of hygiene products to schools
 
Unilever will donate hygiene, disinfectant and oral products to public schools for five years valued at R3 million.
 
The settlement agreement, in which Unilever does not admit liability, is in full and final settlement of all proceedings in this matter.