R53 mln fine for fixing

2008-05-09 00:00

Johannesburg — Tiger Brands CEO Peter Matlare says the firm is "upset and embarrassed" by Adcock Ingram Critical Care’s (AICC’s) involvement in collusion, for which it will pay a R53 million penalty.

This follows yesterday’s announcement that AICC admitted to being involved in collusive tendering with its competitors for a state tender for intravenous medical products.

AICC also admitted that it divided the private hospital market with a competitor, Fresenius Kabi South Africa (FKSA), by allocating customers and specific types of goods or services among themselves.

The Competition Commission said the penalty it imposed on AICC equates to eight percent of the division’s annual turnover, and that the penalty is the highest imposed by it to date — in percentage terms — for collusive behaviour. The commission has referred the matter to its sister body, the Competition Tribunal, to confirm the order.

Matlare said "appropriate disciplinary measures will be taken" and that the firm is "determined to identify and deal with any anti-competitive behaviour in the group".

The Tiger Brands board asked law firm Edward Nathan Sonnenbergs to investigate the allegations, and said that the allegations against the company were "substantially correct".

Matlare said the investigation and co-operation with the commission were part of the company’s initiative to deal with anti-competitive behaviour. "Tiger Brands is determined to restore its reputation for integrity and sound corporate governance," he said.

Tiger Brands said it remains committed to unbundling and separately listing Adcock Ingram, and that it expects this to be concluded before the end of September.

Tiger Brands also released a trading statement yesterday, saying it expects headline earnings for the six months to end-March to be between 10 and 15% higher than that for the same period in 2007. It said that the results include a provision for the R53,5 million administrative penalty.

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