New Era Packaging, one of the largest packaging companies in the country, has been fined a R21-million administrative fee by the Competition Commission .
This follows investigations conducted by the commission after the company was allegedly involved in cartel conduct.
New Era has manufacturing plants in Johannesburg, Durban, Cape Town and Rustenburg. The company manufactures boards and corrugated boxes.
Fine referred to tribunal for confirmation
The commission has referred the fine to the Competition Tribunal for confirmation. This as an order and a consent agreement with the company that it will have to pay the fine.
The commission’s spokesperson, Siyabulela Makunga, gave details on the matter. He said the consent agreement relates to two complaints against New Era that were investigated.
“The commission initiated the first complaint for an investigation on 16 May 2016 against Mpact and New Era. For alleged price fixing, market division and collusive tendering in the market for the manufacture and supply of packaging paper.
“The commission initiated the second complaint for an investigation on 19 April 2017. [This time] against Mpact and New Era for price fixing, market division and collusive tendering in the market. For the collection and supply of recyclable paper material,” said Makunga.
He added that both transgressions were in contravention of the Competition Act.
“In relation to the first complaint, the commission found that from around 1998 Mpact and New Era agreed not to compete for each other’s traditional customers in the market for the manufacture and supply of packaging paper.
Two companies rigged bids to favour them
“The investigation found that Mpact and New Era rigged bids that they submitted to their ‘traditional customers’. …They devised means to prevent other market players from competing with them for business of their traditional customers. This they did by undercutting competitors. Also by… suppressing the price at which those competitors obtained business from their traditional customers.
“With regards to the second complaint, the commission found that the two companies agreed to operate in a ‘sensible’ manner. This… when purchasing recyclable paper material to avoid price wars. And to ensure that the base price of the loose material remains as low as possible, which amounts to price fixing.
New Era has settled the fine
Makunga said that New Era has settled both complaints without admission of liability. And it has agreed to pay an administrative penalty of R21, 298 478.
“Mpact, on the other hand, successfully sought immunity from prosecution in both complaints. In the process agreeing to cooperate with the commission. Upon confirmation, the consent agreement will conclude all proceedings between the commission and New Era. This in relation to the conduct on the manufacture and supply of paper packaging and recyclable paper material,” he said.
