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Cartel Case against BeefCor & Cape Fruit Processors dismissed

“Beefcor and CFP be liable to pay an administrative penalty equivalent to 10% of their respective annual turnover.”

The Competition Tribunal has removed from its roll an application by the Competition Commission to reinstate a cartel case against Beefcor (Pty) Ltd and Cape Fruit Processors CFP).

In 2017, the Competition Commission initiated a complaint against Beefcor and Cape Fruit Processors alleging that both agricultural companies had concluded an agreement not to compete in the market for processing wet peels and citrus pulp used in the production of livestock feed.

BeefCor is a red meat company based in Pretoria. It is a livestock producer, sources feed directly from mills and farmers, produces its own scientifically formulated feed.

Cape Fruit Processors has a local and international footprint specialising in the processing of fruit into value added products for the food and beverage industry.

According to the Competition Commission, it alleged that both company’s conduct amounted “to division of markets or allocation of customers, in contravention of the Competition Act.”

Both companies were found to be in contravention of section 4(1)(b)(ii) of the Competition Act 98 of 1998. This followed the Competition Commission investigation which revealed that Beefcor and CFP entered into two bilateral agreements namely the Use Agreement and Supply Agreement.

The investigation uncovered that both companies agreed “not to compete with each other in the processing of wet peels and citrus peel pulp used to produce livestock feed (wet peels and citrus peel pulp are by-products in the production of fruit juice)” the Commission said.

Furthermore, the parties agreed that CFP will not sell the wet peels and citrus peel pulp “to any other entity without the express written permission of Beefcor.”

The Commission found that the agreement had been in existence from at least 2016 and was ongoing.

In 2017, the Commission referred the matter to the Competition Tribunal for prosecution and for an order that “Beefcor and CFP be liable to pay an administrative penalty equivalent to 10% of their respective annual turnover.”

However, in a bizarre twist of events, the Commission subsequently withdrew its complaint on 27 June 2018. According to the Tribunal, the Commission wanted to give (settlement) negotiations a fair chance.

The matter was removed from the Tribunals roll and on September 2018, the Competition Commission attempted to reinstate the same withdrawn complaint. Beefcor and Cape Fruit Processors raised objections to this.

The Tribunal attempted to resolve the matter between the parties but all but collapsed. Subsequently, the Tribunal notified all parties that the matter had been removed from the roll.

Since the withdrawal by the Competition Commission, the agreement between Beefcor and CFP still stood. To reinstate the complaint, the Commission will be required to file an application for reinstatement if it wished to pursue the matter in future.

“However, it will have to explain why this “new” complaint was different from the withdrawn complaint. For example, it will have to explain that new facts have come to light or the same evidence has been reviewed by the Commission’s investigators in a different light” said the Tribunal.

Cartel Case against BeefCor & Cape Fruit Processors dismissed
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