Small fry for big fisheries

This week the fishing group Oceana admitted guilt to the Competition Commission for a long list of price-fixing and market-allocation “contraventions” and agreed to pay a fine of nearly R35-million. It also named its alleged partners in crime. Some of the companies you will recognise include Foodcorp, Premier Fishing, Pioneer Fishing and Tiger Brands.

What did they do? According to Oceana, they conspired through the South African Pelagic Fish Processor’s Association to fix the prices paid to boat owners and crew for catching fish. In Mossel Bay Oceana and Pioneer Fishing agreed not to compete for fish suppliers and in Port Elizabeth they fixed the rental fees paid to companies with fishing quotas they wanted to use. These moves were no doubt designed to force down the prices they paid to suppliers and will have had a direct impact on livelihoods in struggling coastal towns.

Big stink
Oceana, Pioneer Fishing and Premier Fishing shared information in a way that led indirectly to price fixing in canned fish, a cheap form of protein for many poorer South Africans, and you can bet it wasn’t downward.

Meanwhile, in a boardroom away from the stink of fishmeal (price also fixed), Brimstone Investments and Tiger Brands, which each own a chunk of Oceana and Sea Harvest, signed a shareholder agreement that contained an agreement not to compete with each other. According to the commission, this prevented the two giants from competing in the markets for both hake and pelagic fish between 2000 and 2008. This behaviour steals money from fishermen and their families, and it steals money from consumers.

The R35-million fine is 5% of Oceana’s 2010 turnover in pelagic fish. Its total revenue in 2010 was R3.4-billion, and it had operating profits of close to half a billion rand. The fine simply won’t hurt enough. South Africa’s comfortably collusive companies clearly need to be hit harder before they change.


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