Reacting to the Competition Commission’s recommendation that Nampak should be fined if found guilty of anti-competitive behaviour, the managing director of Nampak’s Africa region, Neil Cumming, said Nampak has steadfastly maintained at all stages of the investigations that the actions of its Glass division has been beyond reproach.
The division has turnover of approximately R400-million a year.
The group is confident that this will be borne out when the final decision is taken.
Cumming pointed out that purchases of cullet (waste glass) by Nampak’s Glass division amount to approximately R15-million a year, and the complaint relates to activities that allegedly occurred before June 2002.
Nampak Glass and other stakeholders in the glass supply chain are deeply committed to a new initiative aimed at substantially increasing glass recycling levels and job creation.
Nampak is surprised, therefore, that this complaint arose at a time when great progress has been made with the new initiative.
The Competition Commission said on Thursday it has referred a complaint against Consol and Nampak to the Competition Tribunal for adjudication for alleged collusion in respect of the supply of cullet for glass container manufacturing.
This followed an investigation by the commission of a complaint lodged by Enviroglass & Waste Services Division, a division of Reclamation Group, alleging that Consol and Nampak had engaged in price-fixing and market allocation arrangements in contravention of the Competition Act.
Consol and Nampak each are involved in, inter alia, the business of manufacturing glass containers by using a combination of virgin raw materials, such as silica sand, soda ash and limestone, and furnace-ready cullet.
The relevant market for the commission’s investigation is the market for the collection, processing and supply of unprocessed and processed cullet for glass container manufacturing in South Africa.
Cullet refers to glass destined for recycling.
Consol and Nampak allegedly engaged in collusive conduct through a body called the Glass Recycling Association (GRA) during at least the period from September 1999 to June 2002.
Such alleged conduct includes, inter alia, joint decisions or agreements to fix the purchase price of cullet, to reduce such prices and refusing to increase prices to be paid to collectors and processors of cullet, the commission said in a statement on Thursday.
Further, Consol and Nampak had allegedly refused to negotiate cullet prices outside the auspices of the GRA, thereby making it impossible for the collectors and suppliers to negotiate competitive prices and volumes with them individually.
The investigation revealed further that Consol and Nampak had jointly developed a model to be applied in determining cullet prices and agreed to allocate between themselves the supply of cullet and/or different types of cullet. — I-Net Bridge