Allens Meshco urges exemption from the Competition Act
Wednesday, 04 Nov 2009
Allens Meshco, one of the biggest manufacturers of steel wire and wire products in South Africa, is requesting exemption from the Competition Act. But the company has already been accused of contravening the act.
Mr Keith Weeks, head of law enforcement and exemptions at the Competition Commission, said that the application will be handled as objectively and quickly as possible. The application is for exemption enabling Allens Meshco to discuss prices and exports relating to wire products and prices, as well as prices, profit margins and vertical agreements with Cape Gate, Consolidated Wire Industries, ArcelorMittal SA and Scaw South Africa. Mittal has a 49% stake in Consolidated Wire Industries and Scaw is apparently responsible for managing the company.
Some time ago the commission referred two cases in which Allens Meshco was involved to the Competition Tribunal for hearing. These arose from complaints by Barnes Fencing and Dunrose about ArcelorMittal.
Barnes Fencing alleged that Mittal had from 2000 to 2003 charged higher prices on shorter terms than its competitors did for soft wire. The wire is used for gates, razor wire and fences.
Allens Meshco is one of Barnes's competitors that, according to the commission's investigation, had received preferential pricing and particularly favorable credit terms.
The commission argued that companies in the Allens Meshco Group, which were so called competitors, had colluded to determine prices and divide markets. In the second case the commission alleged that Mittal had been guilty of price discrimination because of its favorable credit terms and prices to companies in the Allens Meshco group.
