During a consent order hearing at the Competition Tribunal last week the Department of Health announced that it had launched an audit to determine how much it had been overcharged by the drug companies involved in the cartel.
South African executives will face up to 10 years in jail if they are found to be complicit in the collusive actions of the companies they lead.
The Competition Tribunal on Monday confirmed the consent order agreement between the Competition Commission and respondents Adcock Ingram Critical Care, Dismed Criticare, Thusanong Healthcare and Tiger Brands. Last month Adcock Ingram admitted liability for colluding on prices and agreed to pay an administrative penalty of R53,5-million.
With food price hikes affecting all consumers and particularly the poor, it is crucial to understand the pricing when working out what measures can be taken — and where the Competition Commission fits in. High food prices must be seen in the context of the liberalisation of agricultural markets in the mid-1990s and the expectation that with competition there would be greater efficiency and, ultimately, lower prices for consumers.
The Competition Commission on Wednesday laid perjury charges against the managing executive of Adcock Ingram Critical Care at the Sunnyside police station in Pretoria. The commission said it had laid charges against Arthur Barnett for allegedly ”committing the common law crime of perjury”. He allegedly ”knowingly” provided false information to the commission.
A skills shortage at Eskom could affect its expansion plans, trade union Solidarity said on Tuesday. ”Eskom’s current skills shortages are already causing problems, but if the levels of alienation among Eskom staff are any indication, the company is heading for a crisis,” said the union’s Dirk Hermann.
It is shocking that Adcock Ingram Critical Care (AICC) would continue to benefit from public funds after it was found to have been involved in collusive tendering, the Black Sash said on Tuesday. This comes after the Department of Health said that AICC remained in the running for a R5-billion contract for antiretrovirals.
Tiger Brands is starting a company-wide review to ensure there is no more anti-competitive behaviour after cartels in the healthcare and bread and milling sectors were recently exposed, CEO Peter Matlare said on Friday. ”We are cleaning house. We are going door-to-door and cupboard-to-cupboard,” Matlare told reporters in Johannesburg.
Adcock Ingram Critical Care, a healthcare unit of JSE-listed Tiger Brands, has been fined R53,5-million, or 8% of its annual turnover, for admitting its role in fixing the prices of medicines supplied to hospitals, the local anti-trust authorities said on Friday. The matter was referred to the Competition Tribunal on February 11 2008.
Pioneer Foods and Foodcorp have been referred to the Competition Tribunal for their alleged role in a bread price-fixing cartel, the Competition Commission said on Wednesday. The two companies could be fined 10% of their annual turnover for the 2006/2007 financial year.
Consumer foods maker Pioneer Foods goes public on Tuesday April 22, with 400-million shares as part of its plans to raise capital, it said this week. Prior to the listing, the company will offer 20-million shares at R25 each in a rights offer intended to raise R500-million for its capital expenditure programme.
The Congress of South Africa Trade Unions (Cosatu) will stage the first of a series of protests against rising food prices in a march through Polokwane in Limpopo on Sunday, spokesperson Patrick Craven said on Friday. Besides drawing attention to rising food prices, the protesters will also complain about the electricity crisis.
The African National Congress (ANC) on Thursday called on the Competition Commission to intensify its investigations into the causes of high food prices. A spokesperson said all stakeholders in food prices should convene an urgent meeting to discuss ways of minimising the effect of high food prices on the poor.
The Congress of South African Trade Unions (Cosatu) plans to embark on mass action against rising food, electricity and transport costs, as well as interest rates, media reports said on Wednesday. This comes after the Competition Commission announced the formation of a crack team to investigate price-fixing in the food industry.
The business sector in South Africa must play an active role in poverty eradication, Business SA said on Tuesday. CEO Jerry Vilakazi said business should commit to working with other social partners to bring about social change. He was addressing the two-day Business, Development and Poverty conference in Sandton.
In order to pursue a civil claim for damages in the high court, regional airline Comair is seeking an order from the Competition Tribunal declaring that an incentive scheme for travel agents that was run by South African Airways (SAA) was a prohibited practice in terms of the Competition Act.
After the Competition Tribunal on Monday rejected an application to confirm a settlement agreement between the Competition Commission and Netcare Hospital Group, Netcare said in a statement on Tuesday it was disappointed with the decision of the tribunal not to sanction the consent order.
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/ 26 February 2008
The government is to intervene to curb rocketing private healthcare costs and prevent the sector’s ”demise”, Health Minister Manto Tshabalala-Msimang said on Tuesday. The health charter task team, among others, has been discussing the challenge of making healthcare more affordable, she told the National Assembly’s health committee.
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/ 12 February 2008
The head of Adcock Ingram Critical Care, Tiger Brands’s healthcare division, has been suspended following allegations of collusion by the Competition Commission, the company said on Tuesday. Tiger Brands non-executive chairperson Lex van Vught said the company is ”devastated” by the allegations.
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/ 11 February 2008
The Competition Commission has referred three pharmaceutical companies to the Competition Tribunal for prosecution after they were found to be colluding when bidding for government tenders, it said on Monday. ”Collusive behaviour would undoubtedly be one of the contributing factors to higher prices in healthcare,” said competition commissioner Shan Ramburuth.
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/ 7 February 2008
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.
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/ 30 January 2008
Prosecution procedures into alleged price-fixing by certain South African milk producers will begin next week, the Competition Commission said on Tuesday. Eight dairy companies investigated for alleged price-fixing will be involved in pre-hearings next week, said the commission’s head of enforcements and exemption.
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/ 22 January 2008
Strict action will be taken against those who ”manipulate” the price of bread, the government warned on Tuesday. It was gravely concerned about rising bread prices, which inevitably affected the poor, the Ministry of Agriculture and Land Affairs said in a statement.
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/ 16 January 2008
The South African competition watchdog the Competition Commission on Wednesday slammed bread price increases, saying the ”blatant profiteering is an insult to the nation”. Bread maker Tiger Brands on Monday implemented price increases on its Albany bread brand.
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/ 14 January 2008
Tiger Brands began charging 40 cents more for a loaf of Albany bread on Monday, with Pioneer Foods and Premier Foods in the process of considering their increases. In response, the Congress of South African Trade Unions (Cosatu) suggested the increases were linked to last year’s bread price-fixing scandal.
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/ 31 December 2007
The registrar of medical schemes, Patrick Masobe, has threatened to take private hospitals to the Competition Commission if they fail to justify their price increases planned for next year, Business Day reported on Monday. Private hospitals traditionally raise tariffs on January 1 after negotiations with medical schemes, whose members constitute the bulk of their patients.
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/ 18 December 2007
The JSE was lower at midday on Tuesday, playing catch-up after the public holiday on Monday when there was weakness in global equity markets. By 12.04pm, the JSE’s all-share index had pulled back 2,38%. The gold mining index fell 3,31%, resources lost 3,21% and the platinum mining index gave up 3,16%.
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/ 7 December 2007
Tiger Brands chief executive Nick Dennis has advised the company’s board of directors that he intended to take early retirement. He would also resign as a director of the company with effect from the conclusion of the annual general meeting of shareholders, scheduled for February 19 2008.
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/ 28 November 2007
The R98,7-million penalty imposed on Tiger Brands was too lenient, the Congress of South African Trade Unions said on Wednesday at a Competition Tribunal hearing in Pretoria. ”Bread in particular is a diet of the poorest and it is appalling that people should enrich themselves by robbing the poor,” it said.
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/ 19 November 2007
Standard Bank will raise its transaction fees by an average of 4,65% in 2008, the bank said on Monday. Increasing competitive pressure, rising interest rates and inflation were some of the reasons for the increase, said the bank’s CEO for personal and business banking, Sim Tshabalala.
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/ 16 November 2007
A report on anti-competitive behaviour by South Africa’s four major banks will have ”serious implications” for the sector, says the Competition Commission. ”The sheer volume of information received has enabled us to analyse the anti-competitive outcomes we have noted,” said the head of the inquiry, Thabani Jali.
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/ 15 November 2007
The outcome of the Competition Commission’s report on collusion in the bread and milling industry did not come as a surprise, Grain SA said on Thursday. The commission ordered Tiger Brands to pay an administrative penalty of R99-million, after the company admitted that it had participated in bread and milling cartels.