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SA tyre price-fixing scandal

2010-09-06 12:27
Johannesburg - The Competition Commission has referred a complaint of collusive tendering, price-fixing, information exchange and market allocation against four tyre manufactures and suppliers, including Apollo Tyres, Goodyear, Continental and Bridgestone, as well as industry body the SA Tyre Manufacturers Conference.

The commission's investigation was prompted by a complaint alleging that the tyre manufacturers simultaneously adjusted their prices around the same time and within the same parameters.

As a result of the complaint, on April 4, 2008, the commission conducted a search and seizure operation at the premises of Bridgestone, Apollo and the SATMC. 
    
Pursuant to the commission's investigation and interrogations, Bridgestone applied for and was granted conditional immunity from prosecution in terms of the commission's corporate leniency policy.
 
In its application for leniency, Bridgestone admitted that it had had phone discussions and meetings with its competitors during the period 1999-2007 to agree in principle that they should co-operate to ensure stability in the tyre market. 

The meetings, attended by the tyre manufacturers' sales and marketing representatives, co-ordinated the timing and the average percentage price increase of tyres, agreed on the discount structure for tyre dealers, and messages to be given to the market explaining the increases.

'Coffee-table discussions'
 
The group makes and supplies car tyres, light truck or commercial tyres, truck and bus tyres, off-road tyres, agricultural tyres and earthmover tyres. It main customers are retail tyre dealers, automakers which buy tyres for new vehicles, and the state, which procures tyres for state-owned vehicles and fleets through a tender process managed by the State Tender Board.

The commission's investigation found that the SATMC was used as a platform for what has been termed "coffee-table discussions" to determine price increases and general co-ordination in the market among the tyre manufacturers.

The investigation also found that importers Yokohama and Michelin were not involved in the cartel conduct.

The commission has requested the tribunal to impose an administrative penalty amounting to 10% of the total turnover of each of SATMC, Apollo, Goodyear and Continental.
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