Dates set for hearings into price fixing in milk industry

The Competition Tribunal on Thursday set down dates for hearings regarding the milk price-fixing issue.

The hearings stem from a complaint by a small milk producer alleging anti-competitive behaviour in the milk industry.

In February 2005, the Competition Commission began investigating the milk industry, and during this investigative phase received additional complaints of further alleged contraventions.

The commission investigated alleged collusion, price-fixing, market division and the abuse of dominance by some of the major milk producers.

In December 2006, having established during the investigation that there was — in the commission’s view — sufficient evidence of anti-competitive behaviour, the commission referred the matter to the tribunal for adjudication.

The commission alleged that eight milk producers — namely Clover Industries, Clover South Africa, Parmalat, Ladismith Cheese, Woodlands Dairy, Lancewood, Nestle and Milkwood Dairy — were involved in various practices that contravened sections 4 and 8 of the Competition Act.

These alleged practices included:

  • the exchange of milk between processors and the use of exchange and supply agreements;
  • Abusing their respective dominant positions in the market by way of exclusive supply with producers;
  • Fixing retail practices and market allocation;
  • Fixing trading conditions;
  • Indirectly fixing the selling price and/or trading conditions of milk and processed products at an artificially high level by agreeing on a coordinated control of volumes in the market.

The commission has asked the tribunal to interdict the milk producers from engaging in the practices and to impose an administrative penalty of up to 10% of the turnover generated during the milk producers’ preceding financial year (being 2005/06).

The milk producers are opposing the commission’s complaint referral.

Some have denied taking part in certain alleged conduct, and others contend that their conduct did not have anti-competitive results as argued by the commission.

The dates for the hearings were set as follows:

May 2: This will deal with points in limine (peripheral procedural issues)

August 13: This will deal with an application to compel further and better discovery (exchange of documents).

Hearings on substantive issues will be public and will take place on September 29,30 and October 1,2,3,6,7,8,9 and 10. — Sapa

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