Mathabo Le Roux
5 November 2008
Johannesburg — IN A major victory for the Competition Commission, a US industry body that had been accused of organising its members as an export cartel in the local market yesterday effectively admitted fixing prices on soda ash and agreed to withdraw from the southern African market.
The American Natural Soda Ash Corporation (Ansac) reached a settlement with the commission, bringing to an end the longest-running case in the body's history. Ansac will pay a R9,7m fine - 8% of its annual turnover in SA.
Ansac admitted that its membership agreement had eliminated price competition between members in exports sales in contravention of the Competition Act.
The body agreed to stop export sales to SA within six months of the confirmation of the agreement and to "make modifications" to ensure members could individ-ually sell product into SA.
The corporation also agreed to pay the legal expenses of soda ash producer Botswana Ash (Botash), which brought the initial complaint. It is believed the legal costs of the case, which dragged on for almost 10 years, were likely to match the size of the fine, highlighting the importance of Ansac's global interests.
Ansac's persistence with the case in the context of its relatively low sales into the South African market was likely an indication that it wanted to protect its international strategy and its failure here could have implications for its position in other markets .
Ansac is a group of companies that co-ordinate efforts in export markets to reduce costs. The controversial collaborative arrangement exists in terms of the US Web Pomerene Act, which allows for such arrangements in export markets, but prohibits them at home. Granting the order, tribunal chairman David Lewis alluded to this situation, recommending that the commission publicise the outcome of the case on the International Competition Network's website and refer the settlement to other countries, such as Brazil, Korea and Mexico, "similarly beset by having to deal with Ansac".
"I'm sure Ansac are well pleased with their ability to maintain the cartel in existence for 10 years more than it should have been maintained.
"At least it is over now," Lewis said in an unambiguous statement of his sentiment of Ansac's tactics during the "vexatious" case.
But sidestepping Lewis's remarks, advocate Martin Brassey for Ansac said the decision to withdraw from the South African market was strategic and should not be construed as an admission of anticompetitive action.
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