From next week Monday the Competition Tribunal will hear a case, brought by the Competition Commission, in which the Commission alleges that Sasol is charging excessive prices for propylene and for polypropylene in the domestic market.
Propylene is the primary input in the manufacture of polypropylene and polypropylene is a polymer used by plastics converters to produce a wide range of plastic products such as food packaging, household products, plastic pipes in construction and car parts in the automotive industry. The Commission alleges that Sasol is charging excessive prices to the detriment of consumers and has requested the Tribunal to impose a penalty of 10% of Sasol’s 2009 turnover for the alleged contraventions.
This case arises out of the Commission’s 2007 investigation, against Sasol and Safripol, in which it found that both parties had colluded to indirectly fix the price of polypropylene and that Sasol had charged excessive prices for propylene and polypropylene. The Commission referred the case to the Tribunal in August 2010. Since that time both Sasol and Safripol have settled with the Commission on the collusion aspect of the case, paying penalties of R16,5 million and R111 million respectively. However, Sasol has denied the excessive pricing allegations and intends to defend its pricing policies in next week’s hearing before the Tribunal.
The Tribunal expects to hear evidence from 16 witnesses, throughout the four-week hearing. These include Dr Simon Roberts, former chief economist at the Commission, Mr Norbert Behrens, Group General Manager: Strategy at Sasol Limited, Mr Joaquin Schoch, CEO of Safripol (Pty) Ltd and Dr Jorge Padilla, an international expert economist with Compass Lexecon.
This is the third excessive pricing case to be heard by the Tribunal since its inception in 1999. The Tribunal previously found ArcelorMittal to have contravened the excessive pricing provisions in the Competition Act. However, following an appeal which returned the case to the Tribunal, that matter was settled out of court. In the more recent Telkom case the Commission had alleged that Telkom charged excessive prices for its telecommunications infrastructure. In that case however the Tribunal found the Commission did not present sufficient evidence to prove its excessive pricing but did find that Telkom had contravened other sections of the Act.
Statement issued by the Competition Tribunal