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Competition Commission Raids Beef Suppliers for 'Price Fixing'

20 June 2017

SOUTH AFRICA - The Competition Commission raided 13 premises belonging to seven meat suppliers in three provinces on Wednesday morning as part of an ongoing investigation into the alleged fixing of prices and trading conditions.

The Commission said it was conducting simultaneous search and seizure operations probing alleged contraventions of the Competition Act by Karan Beef, Sparta Foods, Chalmar Beef, Beefmaster Kimberley, Morgan Beef, Beefcor, and Fabvleis Midland Meat.

IOL reports that the companies – operating from Gauteng, the Free State and Northern Cape – are meat suppliers which are also known as feedlots.

They purchase weaner calves from farmers in order to bulk feed them in preparation for slaughtering in the production of beef. They also sell beef to wholesale and retail customers.

The Commission said the meat suppliers are alleged to have entered into an agreement and/or engaged in concerted practices to fix the prices and trading conditions when purchasing weaner calves from farmers.

The meat suppliers are also alleged to have an agreement to fix the prices at which they sell meat to wholesale and retail customers.

Spokesperson Sipho Ngwema said in a statement that the meat industry forms an important part of the food sector which is one of the Commission's priority sectors. He said the search and seizure operations were conducted with due regard to the rights of all the affected persons.

"The Commission remains committed in its quest to fight collusion in the food sector as a whole, as higher prices of food affect the most vulnerable and poor households who spend a disproportionately high percentage of their income on food," Mr Ngwema said.

"The Commission obtained search and seizure warrants from the High Court Gauteng Division, Pretoria; the Northern Cape Division, Kimberley; and the Free State Division in Bloemfontein in terms of section 46 of the Competition Act."

Response to #PriceFixing reports

Karan Beef the premier supplier of the highest quality beef and beef products available in South Africa was paid a visit by the competition commission on allegations of price fixing within the beef industry. The competition commission arrived at their head office on Wednesday to start their investigation, IOL reports.

The supplier that was established in 1974 and has committed themselves to the long-term sustainability of the industry has always taken pride in their business that they say has been built on fair and ethical business practices.

However, in a statement, Karan Beef stated that they fully co-operated with the investigation by providing all documents and information that was required and said that they are happy to co-operate with ongoing investigations.

Karan Beef CEO, Arnold Pretorius, said: “I am surprised that the Competition Commission initiated this investigation. I don’t believe that there is any collusion to fix prices either in the purchase of weaner calves, or in the sale of our beef products. If anything, Karan Beef is in fierce competition with other producers in the beef industry implicated in this investigation.”

The competition commission still has the suppliers respect for protecting consumers.

“I respect the work of the Competition Commission to protect South African consumers, particularly those most vulnerable to food inflation,” Mr Pretorius added.

TheCattleSite News Desk

Top image via Shutterstock



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