Tribunal finds pipe manufacturers guilty of collusion
The Competition Tribunal has found Dawn Consolidated Holdings (DCH), through its subsidiary DPI Plastics, and Sangio Pipes guilty of colluding to divide markets in South Africa between 2007 and 2012.
The Competition Commission referred the collusion case against the two manufacturers of regular high-density polyethylene (HDPE) pipes to the tribunal for adjudication in May 2015.
The tribunal found that a shareholders’ agreement between DCH and Sangio, in which DCH held a 49% interest at the time, had the effect of dividing the market for the manufacture of regular HDPE pipes, in contravention of the Competition Act.
In its decision, the tribunal said it is apparent that Dawn undertook not to manufacture HDPE piping for as long as it or its associates held shares in Sangio. Dawn also undertook to procure all of its HDPE piping from Sangio.
The tribunal has confirmed that a hearing will be held relating to the remedies to be imposed on the companies concerned.
DCH's parent company, Dawn, noted in a separate statement on Monday that it plans to appeal the tribunal's decision once the penalty has been determined.
DCH acquired the remaining 51% of Sangio in June 2014.
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