THE Competition Tribunal has approved a R101 million settlement agreement with the Willowton Group, ending a nine-year legal battle over alleged price-fixing and market division allegations in the edible oils sector.
The settlement included a R100 million in public interest commitments and significant social responsibility initiatives.
In December 2016, the commission launched an investigation into Willowton, Wilmar, FR Waring, Africa Sun Oil, Epic Foods, Sea Lake and Unity Food Products for alleged price-fixing and market division, in contravention of the Competition Act.
The investigation focused on claims that these companies had colluded to fix prices and divide markets for edible oils, including baking fats and margarine, dating back to 2007.
In a statement on February 17, the Competition Tribunal said it “had confirmed a consent agreement between the Willowton Group and the Competition Commission, ending the prolonged litigation between the parties since 2016”.
The commission said “the consent agreement, confirmed as an order by the tribunal, ends years of legal disputes over allegations of price-fixing and market division in the edible oils sector. This included a settlement amount of R1 million by Willowton and public-interest commitments valued at R100 million over the next five years.
“Willowton agreed to make payment of a settlement in the amount of R1 million and further agreed to public interest commitments aggregating to an amount of R100 million over a period of five years for the promotion of the public interest in the spirit of the public interest objectives of the Competition Act.”
These commitments are:
* The Willowton Group undertakes that an education trust will be set up as the Shoaib Moosa Education Trust or Dawood Hassam Moosa Education Trust. The educatation trust will be set up as a bursary fund and the Willowton Group will donate a total amount of R20 million over a 5-year period (that is, R4 million per year for a period of 5 years).
* Food and grocery support to non-governmental/non-profit organisations: The Willowton Group undertakes to make a donation of food products and groceries manufactured by it to the value of R30 million over a 5-year period (that is, R6 million per year for 5 years).
* Procurement from Black Economic Empowerment service providers: The Willowton Group also undertakes to procure products and/or services, including logistics services, from Level 1 B-BBEE-owned companies to the value of R50 million over a 5-year period (that is, R10 million per year for 5 years).
However, the Willowton Group denied it had contravened the Competition Act as alleged by the commission.
“Due to the high court litigation, the investigation and resolution of this matter had been delayed, with no findings made. However, both parties agreed to settle the matter to bring the costly and prolonged litigation to a conclusion. Reaching a settlement is in the best interest of all parties involved and will enable the Willowton Group and the commission to resolve long-standing disputed litigation, to put these matters to rest and to move forward constructively.”
So under the terms of the consent agreement confirmed by the tribunal: “Willowton agrees to refrain from engaging in any anti-competitive conduct that may be in contravention of the act in future and to develop and implement a competition law compliance programme as part of its corporate governance framework.
“This consent agreement is entered into in full and final settlement of the commission’s complaint. The commission confirms that there are no other matters currently under investigation involving Willowton.
“Willowton will withdraw its review application in the North Gauteng High Court with each party bearing its own legal costs,” read the Competition Tribunal of South Africa’s statement.