Afgri Ops to pay R15.6m Competition Commission fine

2011-06-06 09:25

Afgri Operations has agreed to pay a R15.6 million administrative penalty to settle a Competition Commission complaint for participating in the determination of the SA Futures Exchange’s (Safex) daily grain storage tariffs, Afgri Operations said today.

“We respect the commission’s finding that the recommendation of the Safex tariffs technically constituted a contravention of the Competition Act,” a statement said.

“The recommendation of the Safex tariffs was done at the request of Safex and on the bona fide understanding that it was crucial for the proper functioning of Safex that there were uniform daily grain storage tariffs.”

These tariffs enable traders to calculate the maximum amount of storage charges applicable on a particular Safex transaction.

Afgri, one of the members of Grain Silo Industry Limited (GSI), had contravened section 4(1)(b)(i) of the Competition Act, 1998 by collectively participating in the determination of the tariffs, via its membership of GSI.

The commission’s investigation focused on the historic recommendation by members of the GSI to Safex of a uniform daily grain storage tariff at the request of Safex.

Afgri said it co-operated fully and voluntarily with the commission.

The commission also investigated an alleged contravention of section 8(a) of the Competition Act 1998 and found that Afgri had not excessively priced any grain storage tariff or any other related products or services which were under investigation.

The terms of the settlement were subject to confirmation by the Competition Tribunal and the amount of the penalty had been fully provided for by Afgri.

Reacting to the settlement, Afgri CEO Chris Venter said: “The investigation relates to historic conduct which has ceased some time ago.”

Afgri had stopped recommending Safex tariffs though the GSI before the commission’s investigation had commenced.

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