The Competition Commission of South Africa has referred car carrier company Kawasaki Kisen Kaisha Ltd for a prosecution to the Tribunal for colluding on a tender for transportation of Toyota vehicles.
The Commission referred Kawasaki Kisen Kaisha Ltd (“K-Line”), a Japanese company operating in South Africa, to the Competition Tribunal for price fixing, market division and collusive tendering involving the transportation of Toyota vehicles from South Africa to Europe, the Mediterranean Coast of North Africa and the Caribbean Islands.
This follows the investigation by the Commission which found that K-Line, Mitsui O.S.K Lines Ltd (MOL), Nippon Yusen Kabushiki Kaisha Ltd (NYK), and Wallenius Wilhelmsen Logistics AS (WWL) fixed prices, divided markets and tendered collusively in respect of the shipment of Toyota vehicles from South Africa to Europe, North Africa, and the Caribbean Islands.
This conduct contravenes section 4(1)(b)(i),(ii) & (iii) of the Competition Act 89 of 1998, as amended. The Commission’s investigation found that from at least 2002 to 2013 K-Line, MOL, NYK and WWL colluded on a tender issued by Toyota South Africa Motors (TSAM) to transport Toyota vehicles abroad from South Africa by sea.
The Commission found that K-Line, MOL, NYK and WWL agreed on the number of vessels that they were to operate on the South Africa to Europe routes at agreed intervals or frequencies. It also found that K-Line, MOL, NYK and WWL agreed on the freight rates that they were to charge TSAM for the shipment of Toyota vehicles.
In 2015, NYK and WWL admitted to colluding on this tender and settled with the Commission. NYK, also a Japanese company, paid an administrative penalty of R103 977 927.00. WWL, a Norwegian company, paid an administrative penalty of R95 695 529.00. MOL, another Japanese company, was not fined as it was first to approach the Commission and cooperated. MOL, NYK and WWL will cooperate with the Commission in prosecuting K-Line.
The Commission is seeking an order from the Tribunal declaring that K-Line, MOL, NYK and WWL contravened section 4(1)(b)(i),(ii) & (iii) of the Act as well as an order declaring K-Line to be liable for payment of an administrative penalty equal to 10% of its annual turnover.
“South Africa is a strategic hub for the trade of goods in and out of the Southern African region. Any cartel by shipping lines in this region results in inflated prices for cargo transportation. Cartels of this nature increase the costs of trading in the region and render the region uncompetitive in the world markets. Such cartels have the effect of significantly derailing the economic growth of the region”, said the Commissioner of the Competition Commission Tembinkosi Bonakele.
Credit: CNBC Africa