Lancewood settles in SA milk cartel probe

The Competition Commission has negotiated a settlement agreement with Lancewood, one of the companies involved in the milk cartel prosecution, the commission said on Friday.

”The company will pay an administrative penalty in the sum of R100 000 and has agreed to cooperate fully with the commission in its prosecution of the remaining respondents,” the commission said in a statement.

The other dairy processors involved are Clover Industries, Clover SA, Parmalat, Ladismith Cheese, Woodlands Dairy, Nestle SA and Milkwood Dairy.

The commission began investigating anti-competitive behaviour in the milk industry in February 2005.

Its investigation found evidence of price fixing for raw and processed milk and the manipulation of the market to restrict competition.

The commission claims that price information exchanges occurred directly, via telephone or email, between company employees at management level.

The companies also exchanged pricing data on procurement prices by providing prices for fictitious and actual scenarios put forward to them.

”The price movement requests related to past, current and, in some instances, future pricing.”

The commission said Lancewood faced only one count of the six subject to the commission’s referral.

”Lancewood admits that it was involved in price information exchanges as alleged by the commission,” it said.

It viewed Lancewood’s conduct as a contravention of the Competition Act.

”[The Lancewood settlement] is the first successful settlement negotiation we have concluded with one of the participants in the milk cartel,” said Commissioner Shan Ramburuth.

”Technical legal points raised by other respondents have delayed the hearing into the merits of this case, but will not deter us from prosecuting all companies colluding in this most basic of food products,” Ramburuth said. – Sapa

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