Competition Commission backs off small dairies

The Competition Commission withdrew its application for permission to appeal against the Supreme Court of Appeal (SCA’s) recent ruling in favour of Woodlands and Milkwood dairies.

The ruling set aside the Commission’s claims of anti-competitive behaviour against the dairies and prevented the Commission from using evidence obtained as a result of an unlawful summons.

The withdrawal brings to a close the Competition Commission’s five-year case against Woodlands. The Commission said, after obtaining legal advice, it concluded that “the ruling will not hamper its ability to initiate, investigate and prosecute contraventions of the Competition Act”.

According to Milkwood CEO Stephen Fick, this lets them off the hook as well, since they were defending jointly with Woodlands.“There are some formalities to be dealt with, but for all intents and purposes the issue is now over,” he said.He added that while the dairies had got off on a technical issue, his conscience was clear.

“We believe we were not unethical or uncompetitive or collusive. If your approach is correct in the beginning and your ethics are right, you shouldn’t have a problem.”Milkwood represents about 19 producers in the Eastern Cape who deliver about 80 000â„“ raw milk per day.

The dairies are the smallest of eight milk producers caught up in the Competition Commission’s probe into price fixing and allocating market share in the milk market, which began in February 2005. Others include Clover Industries, Clover SA, Parmalat, Ladismith Cheese and Nestlé SA. Lancewood settled in 2008 for R400 000.

Manie Roode, Clover Group deputy CEO, said they had instructed their lawyers to advise them on their legal position. “The question is to what extent does the Woodlands matter differ from the Clover referral, and to what extent do the principles laid down by the SCA apply here,” he explained.

But Oupa Bodibe, the Commission’s manager of advocacy and stakeholder relations, said they were proceeding with the remaining cases and were confident their cases were strong, even if their decision to withdraw from the Woodlands case encouraged other companies to follow similar legal paths.