On November 9 2011 the Competition Tribunal confirmed settlement agreements between the Competition Commission and seven firms for their involvement in cartel conduct in the grain storage and trading industry.

The case involves the commission's price-fixing complaint referral against 17 respondents involved in the industry. The respondents, which are all shareholders or members of The Grain Silo Industry, were accused of price fixing by determining and agreeing standardised daily silo storage tariffs for the storage of grain, at the request of the South African Futures Exchange (SAFEX). The commission found that as the respondents were all competing silo operators, and the determination of standardised storage tariffs for SAFEX had been used by the respondents to determine storage fees, this amounted to collusion.

In terms of the settlement agreements, the respondents have agreed to pay administrative penalties as follows:

  • GWK Limited – R301,415.23;
  • NTK Limpopo Agric Beperk – R189,854.66;
  • NWK Limited – R3,295,158.08;
  • OVK Operations Limited – R375,615;
  • Senwes Limited – R7,628,670.36;
  • Vrystaat Kooperasie Beperk – R1,286,969.22; and
  • The Grain Silo Industry – R94,556.

These penalties represent 4% of each respondent's turnover for the 2009 financial year. The respondents have also committed to refrain from contravening the price-fixing provisions of the Competition Act in future and to develop and implement competition compliance programmes.

The tribunal has previously confirmed settlement agreements with eight other respondents in this matter, totalling more than R22 million in administrative penalties. These settlements bring to an end the commission's investigation into the matter. The case against the remaining two of the original 17 respondents has been withdrawn.

For further information on this topic please contact Daryl Dingley at Webber Wentzel by telephone (+27 11 530 5000), fax (+27 11 530 5111) or email ([email protected]).