Competition commission to continue dairy probe

The probe into possible anti-competitive activity in the dairy industry by the Competition Commission will continue.

This followed a ruling by the Competition Appeal Court on Wednesday that although there were procedural errors in the Competition Commission’s dealings with Woodlands Dairy, this did not warrant a dismissal of the case.

Earlier this year both Woodlands Dairy and Milkwood Dairy had argued at the Competition Tribunal that collusion charges against them be dropped because the Competition Commission’s summonses were too vague.

While the tribunal agreed that the charges were too vague, it did not agree with the argument that the investigation had resulted in an invasion of the privacy of the two dairy companies.

The tribunal then granted a preservation order to secure the evidence collected from Milkwood Dairy and Woodland Dairy.

The dairy companies then appealed against the preservation order and the Competition Appeal Court found that there were, however, procedural errors regarding the summons served on Woodlands Dairy.

The Competition Commission was therefore directed to return to Woodlands all evidence in its possession and control.

It now has to recommence summons proceedings against Woodland Dairy, but the case against both dairy companies will proceed.

Wednesday’s appeal arose from an investigation into alleged anti-competitive behaviour in the milk industry, which began in February 2005.

The Competition Commission alleged that Clover Industries, Clover SA, Parmalat, Ladismith Cheese, Woodlands Dairy, Lancewood, Nestlé SA and Milkwood Dairy were engaging in prohibited practices in contravention of the Competition Act.

These included the exchange of information between competitors as well as milk exchange and supply agreements between milk processors.

The Competition Commission also alleged that there had been abuse of exclusive supply agreements with the producers and the fixing of retail prices and market allocation.

The commission negotiated a corporate leniency agreement with Clover.

Clover was granted leniency on the charge of the fixing of the selling price in return for cooperating with the Competition Commission in the prosecution of the other milk processors—Parmalat, Ladismith Cheese, Woodlands Dairy, Lancewood, Nestlé SA and Milkwood Dairy.—Sapa

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