Business News 13.9.2017 04:39 pm

Competition Commission prosecutes beef supplier and juice maker for dividing markets

Beef short ribs.

Beef short ribs.

The Commission says the companies agreed not to compete with each other in the processing of wet peels and citrus peel pulp used to produce livestock feed.

The Competition Commission said on Wednesday that a beef supplier and juice making company have been prosecuted for dividing the markets.

Beefcor and Cape Fruit Processors (CFP) have been charged with division of markets by allocating customers in contravention of section 4 of the Competition Act.

Beefcor operates in Bronkhorstspruit on the border between the Gauteng and Mpumalanga provinces while CFP operates in Paarl in the Western Cape.

The Commission said its investigation revealed that Beefcor and CFP entered into two bilateral agreements called the “Use Agreement and Supply Agreement” in which they agreed not to compete with each other in the processing of wet peels and citrus peel pulp used to produce livestock feed.

Wet peels and citrus peel pulp are by-products in the production of fruit juice.

The Commission said the companies agreed that CFP will not sell the wet peels and citrus peel pulp to any other entity without the express written permission of Beefcor.

The agreement is believed to have been in existence from at least 2016 and was still ongoing.

“This agreement constitutes market division by allocating customers in contravention of section 4(1)(b)(ii) of the Competition Act, No 89 of 1998, as amended,” the Commission’s spokesperson Sipho Ngwema said in a statement.

The Commission has decided to refer the matter to the Competition Tribunal for prosecution and seeks an order that Beefcor and CFP are liable to pay an administrative penalty equivalent to 10 percent of their respective annual turnover.

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