16 May 2010 by

Pipe manufacturer to cough up R31 million for collusion

Pipe manufacturer, Marley Pipes, has agreed to pay a R31 million fine for entering into a series of agreements, arrangements and understandings to fix the selling prices and discounts in respect of ordinary PVC and HDPE pipes products. The investigation into this market began in October 2007 when DPI Plastics (DPI), a manufacturer and supplier of pipe products, filed an intermediate merger notification with the Commission. DPI intended to merge with Incledon Cape. During the course of the Commission's merger investigation, it found evidence of price and discount fixing, bid rigging and the allocation of markets and customers among Swan Plastics, Marley Pipes, Petzetakis, Amitech South Africa, MacNeil Agencies, Flo-Tek Pipes, Andrag and Gazelle Pipes. 

As a result, the proposed merger was prohibited but prior to the prohibition DPI applied for leniency and provided the Commission with evidence of collusion.

Marley Pipes also co-operated with the Commission and provided information to the Commission, including detailed statements from its employees admitting to have contravened the Act between 2004 and 2007. Marley Pipes and the Commission then engaged in protracted settlement discussions on the appropriate penalty, resulting in Marley Pipes paying 6% of its turnover in the 2007 financial year, less the turnover attributable to Specialty Products, which were not subject to the collusive arrangements.

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

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