Fishing company fined for price fixing
The Competition Commission has fined the Oceana group R35.7 million in the latest of a series of price fixing findings
“Oceana has agreed to pay a penalty of R35,750,050 which represents 5% of its turnover derived from its pelagic fish [pilchard, anchovy and red eye] operations in South Africa in 2010,” the commission said in a statement.
Oceana admitted that Oceana Brands, Foodcorp, Premier Fishing SA, Gaansbaai Marine, Terressan Pelagic Fishing, Paternoster Visserye, Pioneer Fishing and Saladanha Foods, as members of the South African Pelagic Fish Processors’ Association (SAPFPA), agreed to fix prices paid to vessel owners/operators, skippers and crew for catching pelagic fish. This was done through meetings and correspondence distributed by SAPFPA to its members and a standard formula applied to the price of fishmeal to determine the prices to be paid.
The commission said Oceana entered into agreements with its competitors — Pioneer Fishing, Premier Fishing and Saldanha Bay Canning — in the processing and canning of fish, and they shared information which gave rise to indirect fixing of the price of canned fish sold to consumers.
Oceana Brands and Pioneer Fishing also agreed to not compete with each other for suppliers of fish in Mossel Bay.
In 2006, Oceana entered into an agreement with Pioneer Fishing to fix the quota rental fees payable to three companies in Port Elizabeth for the use of their pilchard quota for the 2006 fishing season.
Oceana entered into agreements to allocate fishmeal customers and to fix the prices of fishmeal with its competitor, the SA Fishmeal Marketing Corporation.
Brimstone Investments Corporation Limited and Tiger Brands Limited, both substantial shareholders in the Oceana Group, were signatories to a shareholders’ agreement with Sea Harvest which contained a non-compete clause, the commission said.
“The commission concluded that the shareholders’ agreement prevented Sea Harvest and Oceana from competing in the hake and pelagic fish markets, respectively, between 2000 and 2008,” it said.
The settlement follows a complaint initiated by the commission in July 2008.
Pioneer Fishing applied for and was granted conditional leniency.
The agreement has been filed with the Competition Tribunal and will be set down for confirmation of the order there.
So far, the commission has fined:
- Pioneer Foods R195 million for being part of a bread cartel,
- Wire mesh companies R27 million, and
- South African Airways R18.7 million and Singapore Airlines R25.1 million for price fixing on flights between South Africa and Hong Kong.
In terms of the Competition Act, the Competition Commission has the power to investigate restrictive business practices and abuse of dominant positions.