Business In The News South Africa

Competition Commision refers Japanese company for prosecution over collusion and price fixing of Toyota vehicles

JOHANNESBURG – The Competition Commission on Monday referred Kawasaki Kisen Kaisha (K-Line), a Japanese company operating in South Africa, for prosecution to the Competition Tribunal for alleged price fixing, market division and collusive tendering.

The case involves the transportation of Toyota vehicles from South Africa to Europe, North Africa and the Caribbean Islands via Europe, West Africa, East Africa and Latin America by sea.

This follows the investigation by the Commission which found that K-Line, Mitsui O.S.K Lines (MOL), Nippon Yusen Kabushiki Kaisha (NYK), and Wallenius Wilhelmsen Logistics (WWL) fixed prices, divided markets and tendered collusively in respect of shipment of Toyota vehicles from South Africa to these regions.

The Commission’s investigation found that from at least 2002 to 2013, K-Line, MOL, NYK and WWL colluded on a tender issued by Toyota South Africa Motors to transport Toyota vehicles from South Africa to abroad by sea.

Further, the Commission found that these distributors agreed on the number of vessels that they were to operate on the South Africa to Europe routes at agreed intervals or frequencies.

Furthermore, the Commission found that K-Line, MOL, NYK and WWL agreed on the freight rates that they were to charge Toyota South Africa Motors for the shipment of Toyota vehicles.

In 2015, NYK and WWL admitted to colluding on this tender and settled with the Commission.

NYK, also a Japanese company, paid an administrative penalty of R103,977,927 and WWL, a Norwegian company, paid an administrative penalty of R95,695,529.

MOL, another Japanese company, was not fined as it was first to approach the Commission and cooperated.

The Commission said MOL, NYK and WWL would now cooperate with it in prosecuting K-Line.

The Commission is seeking an order from the Tribunal declaring that K-Line, MOL, NYK and WWL contravened some clauses of section 4 of the Competition Act as well as an order declaring K-Line to be liable for payment of an administrative penalty equal to 10 percent of its annual turnover.

Commissioner Tembinkosi Bonakele said South Africa was a strategic hub for the trade of goods in and out of the Southern African region.

“Any cartel by shipping liners in this region results in inflated prices for cargo transportation,” Bonakele said.

“Cartels of this nature increase the costs of trading in the region and render the region uncompetitive in the world markets. Such cartels have the effect of significantly derailing the economic growth of the region.”

– African News Agency (ANA)

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