Competition Commission takes Sasol on again

After previously being fined R250 million for anti-competitive practices in South Africa’s chemical fertiliser market, Sasol is now facing fresh charges of excessive pricing for its polymer products.

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The Competition Commission reported that, since 2007, it had been investigating allegations that Sasol Chemical Industries and another polymer plastics manufacturer, Safripol, had been colluding on polymer pricing formulae and on polymer supply agreements. Competition Commission spokesperson, Keitumetse Letebele, explained that the Department of Trade and Industry had been the first to raise concerns about polymer pricing and its negative effect on diversified growth and employment in manufacturing.

“Sasol is the dominant supplier of propylene, for its own use and that of Safripol,” Letebele said. “It is also the major supplier of polypropylene to the South African market along with Safripol. The Commission found that South Africa is also a major exporter of polypropylene reflecting its competitive position in this product. One would therefore have expected pricing to local customers to be on the same basis as export prices, however, this was not the case.”

The Competition Commission reported that Sasol had been charging local customers the more expensive import parity prices for polypropylene and propylene products. The Commission has referred the case to the Competition Tribunal for adjudication. The case will be heard from 13 May to 7 June 2013. The Competition Commission is seeking a penalty against Sasol of 10% of the chemical giant’s annual turnover on each of its contraventions should Sasol be found guilty. Plastic polymers have a diverse range of uses. These include the manufacture of plastic piping and plastic machinery parts widely used in SA agriculture.

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