The Competition Commission has signed a settlement agreement with fast-moving consumer goods company Unilever South Africa that settles a possible market division case against Unilever.

In terms of the settlement agreement, Unilever has agreed to pay an administrative penalty in the amount of R16-million without an admission of liability.

Unilever has also agreed to a range of initiatives, including that it will increase the aggregate yearly value of its procurement of products and services from local entities by a minimum of R340-million for over a period of four years as part of the settlement agreement.

Additionally, the company has agreed to donate hygiene, disinfectant and oral care products to the value of R3-million to no fewer than 18 780 public schools over a period of five years.

Further, Unilever will establish an enterprise and supplier development fund to the value of R40-million. This fund will provide interest-free business loans to qualifying black-owned entities in the manufacturing, logistics and wholesale industries in South Africa that meet Unilever’s credit and selection criteria. This includes black-owned manufacturing companies requiring startup funds to enter the logistics, wholesale and distribution industries.

“With agreements like the one with Unilever, the Commission preserves the spirit of healthy competition, protects the rights of consumers and paves the way for a thriving marketplace built on integrity and shared prosperity,” said Commissioner Doris Tshepe.

The agreement has been filed with the Competition Tribunal for confirmation.

In 2017, the commission referred a case against Unilever and trading and logistics multinational Sime Darby Hudson Knight for prosecution for possible division of markets between 2004 and 2013.

The commission’s investigation found that the two companies entered into a sale of business agreement, which contained a non-compete clause, which restricted each of them to produce and supply certain pack sizes of margarine and edible oils. This is in possible contravention of the Competition Act.

Sime Darby settled the matter with the commission in July 2016.