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JSE
THEE
THEE - The Competition Commission - Sasol settles fertiliser case with
Competition Commission; to pay R188 million
The Competition Commission
PRESS STATEMENT
06 MAY 2009
Sasol settles fertiliser case with Competition Commission; to pay R188 million
Sasol Chemical Industries Limited ("Sasol") has settled two fertiliser cases
with the Competition Commission, admitting it contravening section 4(1)(b) of
the Competition Act prohibiting cartel conduct. Sasol agreed to pay a penalty of
R188 010 000. This agreement is subject to confirmation by the Competition
Tribunal.
This fine is the highest settlement reached with the Competition Commission to
date and is based on 6% of the turnover of the Sasol Nitro division. The
agreement relates to the following cartel conduct:
a complaint filed by Nutri-Flo, a small blender and distributor of fertiliser,
and subsequently referred by the Commission to the Tribunal in May 2005 in
respect of collusion on the part of Sasol, Omnia and Yara (previously known as
Kynoch) in nitrogenous fertiliser products;
related practices in the fertiliser market subsequently identified by Sasol as
part of its internal competition compliance review in 2008; and
collusion by Sasol and Foskor in phosphoric acid supply (used in fertiliser and
animal feed) which was being investigated by the Commission.
In the Nutri-Flo matter, the Commission found that Sasol and its competitors,
Omnia and Yara, divided markets and fixed prices. Sasol, Omnia and Yara, the
main suppliers of fertiliser in South Africa, set up various committees to co-
ordinate business practices, derive forecasted market shares and ensure balance
of supply and demand. In addition, arrangements between these competitors
resulted in Sasol becoming the sole wholesale supplier of an important
fertiliser product, limestone ammonium nitrate (LAN).
Sasol`s compliance review uncovered further collusive practices between Sasol,
Omnia and Yara, including price fixing, market allocation and collusive
tendering in the supply of a wide range of fertiliser products in the period
1996 to 2004, across most provinces of South Africa.
The collusive conduct between Foskor and Sasol was identified by the Commission
following a merger filing. This conduct relates to a tolling agreement concluded
by Sasol and Foskor, in terms of which Foskor became the sole supplier of
phosphoric acid to the South African market. In May 2008, Foskor applied for
conditional immunity from prosecution in terms of the Commission`s corporate
leniency policy in relation to contraventions of section 4(1)(b) of the Act.
This was subsequently granted.
The settlement is limited to collusive conduct and there are outstanding
allegations of abuse of dominance in both matters. With regard to nitrogenous
fertiliser products these relate to, amongst others, excessive pricing and
exclusion of competitors by Sasol. In the phosphoric acid matter this relates to
excessive pricing by Foskor. Settlement discussions in these respects are
continuing with Sasol and Foskor.
Omnia and Yara continue to deny the allegations of collusive conduct in
continuing proceedings before the Competition Tribunal.
"Fertiliser and animal feed are key inputs for food production, and anti-
competitive conduct in these products harms farmers and consumers. The
Commission will continue its focus on these important markets." said Shan
Ramburuth, Competition Commissioner.
ENDS
Prepared by: FD Beachhead
Jennifer Cohen 011 214 2401/ 082 468 6469/ jennifer.cohen@fd.com
Dani Cohen 021 487 9021 / 082 897 0443 dani.cohen@fd.com
Senzi Dlamini 011 214 2420 / 073 494 0030 senzi.dlamini@fd.com
On behalf of: The Competition Commission
Further info:
Nandi Mokoena
Manager of Strategy and Stakeholder Relations, Competition Commission
012 394 3286 / 082 399 1328 / nandisilem@compcom.co.za
Keitumetse Letebele, HOD Communications
012 394 3183 / 082 783 3397 / keitumetsel@compcom.co.za
Date: 06/05/2009 09:00:08 Produced by the JSE SENS Department.
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