Johannesburg – Corobrik has described the charge of price-fixing, following an investigation by the Competition Commission, as "surprising".
On Thursday the commission released a statement indicating that Corobrik and five other firms in the bricks sector were investigated for contravening the Competition Act.
The other firms include Era Bricks, Eston Brick and Tile, De Hoop Brickfields, Clay Industry and Kopano Brickworks. The commission said that agreements made between the players have resulted in price fixing and the division of markets in the manufacturing and supply of bricks, pavers and blocks of clay and concrete.
Corobrik entered into separate bilateral agreements with each of the above companies in terms of which they agreed to divide the market by allocating specific products and or customers, said the Commission. Corobrik and Era Bricks agreed to fix prices at which they sold bricks, pavers and blocks.
The companies concluded a Memorandum of Agreement that Era Bricks would not supply its products directly to customers in competition with Corobrik, but instead would sell directly to Corobrik who would then sell to customers in the open market, said the commission.
Corobrik also concluded a separate bilateral distributorship agreement with each of Eston Brick, Clay Industry, De Hoop and Kopano, where they agreed that they would not supply their respective products directly to customers in competition with Corobrik. The firms would supply their products to Corobrik which would then sell directly to customers.
But Corobrik’s managing director, Dirk Meyer, said in a statement that the brick maker takes the allegations seriously.
“I was most surprised to learn that the commission believes these agreements generate competition law concerns.
“Corobrik is of the view that its agreements with the abovementioned firms are both legitimate and defensible in terms of the Competition Act and that the commission’s concerns are attributable to a misunderstanding of the commercial arrangements in question and the market generally.”
Meyer added that the referral to the Competition Tribunal does not constitute a finding against Corobrik.
“The question of whether or not the conduct actually amounts to a contravention of the Competition Act remains to be adjudicated by the tribunal,” he said.
“Corobrik is looking forward to the opportunity to clear its name and is confident that a thorough ventilation of the relevant facts and circumstances before the tribunal will set the record straight.”
The company’s operations will not be interrupted by the process, he affirmed.
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