9 July 2010 by

Commission refers cycling industry cartel to the tribunal

Although the Commission as a matter of policy focuses on big businesses affecting a broad spectrum of consumers, the prohibitions in the Competition Act affect small and big business alike and where evidence is brought to its attention of alleged prohibited practice, it is statutorily bound to take action. 

In an investigation dating from March 2009, the Commission has now referred its complaint against the cycling industry cartel involving 12 bicycle retailers and 16 bicycle wholesalers. In addition to an anonymous tip-off and complaint lodged by an independent retailer that kick-started the investigation, the complaint has apparently been bolstered by admissions by some of the respondents during the investigation process. The bicycle retailers are alleged to have excluded competitors such as internet retailers from the market by requesting the bicycle wholesalers to sell to these independent retailers at a higher price.

It is also alleged that the respondents held various meetings in 2008 to discuss and agree on the wholesale and recommended retail prices of cycles and accessories.

The Commission has requested the Tribunal to impose an administrative penalty of 10% on the annual turnover of each of the firms involved.

Chris Charter, Director, Competition
Scarlate Nkiwane, Associate, Competition

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