New Era Packaging, a packaging company in South Africa, has been fined R21.29m ($1.15m) by the country’s Competition Commission for allegedly engaging in anticompetitive practices.
The fine was imposed after the commission concluded its investigations into allegations of cartel conduct involving the company.
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Two separate complaints had been lodged against New Era Packaging, which led to these probes.
The first investigation, initiated on 16 May 2016, concerned New Era Packaging and Mpact.
It focused on alleged price fixing, market division, and collusive tendering in the paper packaging manufacturing and supply market.
The second complaint, launched on 19 April 2017, also includes the two companies and centred on similar practices within the recyclable paper material collection and supply market.
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By GlobalDataBoth sets of allegations are said to contravene Section 4(1)(b)(i), (ii), and (iii) of South Africa’s Competition Act.
The commission’s findings regarding the first complaint revealed that since around 1998, New Era Packaging and Mpact had an arrangement not to compete for each other’s established customers in the packaging paper sector.
The investigation claimed that the companies manipulated bids to their ‘traditional customers’, creating barriers for other market players and ensuring they could not compete by undercutting prices or suppressing competitors’ business acquisition costs.
In the second case, the commission found that the companies had agreed to maintain a ‘sensible’ approach when buying recyclable paper material.
This strategy was to avoid price wars and keep the base price of the material as low as possible, which constituted price fixing.
While New Era Packaging has settled both complaints without admitting liability, it has agreed to pay the penalty.
Mpact, in contrast, has obtained immunity from prosecution for both complaints by agreeing to cooperate with the commission.
