Multinational company Unilever has agreed to pay an administrative penalty of R16-million without admitting liability.
This after a six-year legal battle regarding collusion practices, after the Competition Commission started legal proceedings against Unilever and Sime Darby in 2017.
Unilever and Sime Darby were investigated for allege possible market division practices that spanned from 2004 to 2013.
Based on the agreement, Unilever will also establish an enterprise and supplier development fund worth R40-million.
The fund will offer interest-free business loans to qualifying black-owned entities in the manufacturing, logistics, and wholesale industries in South Africa, provided they meet Unilever’s credit and selection criteria.
Part of the settlement also includes support for black-owned manufacturing companies requiring start-up capital to enter the logistics, wholesale, and distribution sectors.
Competition Commission spokesperson Siyabulela Makunga said: “In 2017, the commission initiated legal proceedings against Unilever and Sime Darby Hudson Knight [Sime Darby], alleging possible market division practices that spanned from 2004 to 2013.
“Our investigation revealed that both companies had entered into a sale of business agreement which included a non-compete clause restricting their production and supply of certain pack sizes of margarine and edible oils, potentially contravening section 4(1)(b)(ii) of the Competition Act No 89 of 1998 [as amended].”
Unilever also committed to a range of initiatives as part of the agreement, which included an increase in the aggregate annual value of its procurement of products and services from local entities by a minimum of R340-million over a four-year period.
It will also donate hygiene, disinfectant, and oral care products valued at R3-million to no fewer than 18 780 public schools over a period of five years.
In welcoming the tribunal’s confirmation of the agreement, commissioner Doris Tshepe said: “As we move forward, this agreement will go a long way in fostering healthy competition and driving positive change in South Africa’s business landscape.”
Sime Darby settled with the commission in 2016.
