Aveng fine should warn companies on competition law
16/02/2009

The large fine recently imposed by the Competition Commission for price fixing has emphasised the need for companies to be proactive in complying with competition law.

The Competition Commission imposed a R46.3 million fine on listed construction and engineering company Aveng, in accordance with a consent agreement. The agreement is subject to approval by the Competition Tribunal.

According to reports the fine amounted to 8% of the annual turnover attributable to Infraset, one of Aveng Africa’s business units.

In December 2007 one of Aveng’s competitors, Rocla, applied to the Competition Commission for leniency regarding its involvement in a cartel in the precast concrete market in South Africa.

The Competition Commission’s investigation found that:

• Infraset and eight competitors had engaged in fixing the selling price of pipes, culverts and manholes. They had divided the markets for the production and distribution of these products and colluded in tendering to supply precast concrete sleepers to certain projects.
• The respondents had regular meetings to orchestrate the transgressions.

Aveng CEO Roger Jardine expressed the board’s shock at the unlawful conduct of its employees and confirmed its commitment to eradicating such activity from the organisation. Two Infraset executives have been suspended.
As part of the consent agreement, Aveng Africa has to develop and implement a formal compliance programme as prescribed by the Competition Commission.

The Competition Commission is seeking the maximum allowable penalty of 10% of annual turnover in the previous year against the remaining seven companies.

Jac Marais
Senior Associate
jac-m@adamsadams.co.za