Competition Tribunal cracks the whip: Collusive companies to pay R40 million penalty

Furniture removal companies Stuttafords and Pickfords have agreed to pay a R40 million administrative penalty, after admitting to cartel conduct.

The Competition Tribunal confirmed the settlement agreement on Tuesday.

The companies were found to have colluded in the provision of furniture removal services to government departments, big corporates and private individuals.

This came after the Competition Commission launched investigations into several furniture removal companies in 2010.

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‘Cover pricing’

According to the Competition Tribunal, the collusion involved the exchange of cover prices or quotes – allegedly from 2007 to 2012.

“Cover pricing is a practice whereby one or more firms agree that they will submit tenders in such a way that the designated winner will submit the lowest or most favourable bid and the other(s) will submit artificially high bids so as not to win the contract.”

Found guilty, Stuttafords was charged with 649 instances of collusive tendering involving the exchange of cover quotes, while Pickfords was charged with 37.

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Agreeing to tow the line

As per the terms of settlement, the companies are jointly and severally liable to pay the penalty. However, only one will foot the bill, while the other will be absolved.

The companies have also agreed to refrain from engaging in cartel conduct in future, and to implement a competition compliance programme.

Meanwhile, AGS Fraser International which was also implicated in the Competition Commission’s investigations was charged with three instances.

However, the Commission has agreed as part of the settlement, to withdraw the complaint referral against AGS.
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