Supplier charged with fixing the price of your coffee fix

The Commission initiated a complaint in July 2015 against Caffeluxe and Global Coffee Exports Limited for their alleged conduct during 2013 and 2014 where they agreed not to undercut each other when selling coffee capsules to retailers. The Commission found this conduct to be in contravention of s4(1)(b)(i) of the Competition Act, No 89 of 1998.

Price fixing as a per se prohibition is presumed to have negative market effects and is prohibited outright without an examination of the actual effects on competition, attracting a penalty of up to 10% of a firm’s annual turnover. In settling with the Commission, Caffeluxe agreed to pay a fine of R750,000, which is less than 10% of its annual turnover and payable in instalments. Caffeluxe has also agreed not to engage in any other anti-competitive conduct and has agreed to implement a competition law compliance programme for its employees, management, directors and agents. Although unclear from the consent order, it seems likely that Global Coffee was a successful leniency applicant.

This consent agreement comes after a string of recent consent agreements confirmed by the Competition Tribunal involving price fixing claims against various companies across different industries. In as much as this highlights the importance of consent agreements in expeditiously resolving matters between respondents and the Commission, it also highlights the alarming number of price fixing incidents that continue to be uncovered.