South African fats and oils firms under spotlight in cartel probe

By Gill Hyslop

- Last updated on GMT

Oils not well as several South African companies that produce edible oils, margarine and baking fats are being investigated for alleged contravention of the Competitions Act. Pic: ©iStock/Okea
Oils not well as several South African companies that produce edible oils, margarine and baking fats are being investigated for alleged contravention of the Competitions Act. Pic: ©iStock/Okea

Related tags South africa Fat Competition commission

Five of South Africa’s top companies involved in the margarine, edible oils and baking fats industry have been accused of price fixing.

The country’s Competition Commission said it has reasonable grounds to suspect Wilmar Continental Edible Oils and Fats, DH Brothers Industries (trading as Willowton Oil and Cake Mills), FR Waring Holdings, Africa Sun Oil Refineries and Epic Foods of cartel conduct.

Oils not well

According to commissioner Tembinkosi Bonakele, the Competition Commission has been closely monitoring the fats and oils market, and has noted some “worrisome”​ developments.

The alleged conduct, which includes price fixing in the market for the manufacture and distribution of refined edible oils, baking fats and margarine, is believed to have started before 2007. The Commission noted that prices of certain products from the five companies increased “at almost the same time”.

Last week, the Commission raided all the companies’ premises, based in Gauteng and KwaZulu-Natal, seizing documents, records and electronic data to determine whether these companies have contravened the Competitions Act.

Fat chance

BakeryAndSnacks was able to get comment from some of the companies involved.

Wilmar International Limited confirmed that a search and seizure operation had been conducted at the Randfontein, Gauteng, premises of its South African subsidiary, Wilmar Continental Edible Oils and Fats, as part of an industry-wide investigation by the Competition Commission.

The company issued a statement saying it takes legal compliance very seriously and is disappointed by the unfortunate events, but is cooperating with all parties involved to assist with the investigation.

Not the first time

A statement sent to BakeryAndSnacks by Willowton’s national marketing manager, Hilton Cairns, reported that the company has previously been investigated, but no evidence has been found of any wrongdoings.

“Allegations of price collusion and cartel activities among suppliers and competitors in the edible oil market have been made by the Commission and these allegations again are refuted by the company,”​ it said.  

“The Willowton Group is fully committed to sound corporate governance as well as fully complying with all laws and regulations of the countries within which we operate.”

Epic Foods, too, denies engaging in any conduct of an anti-competitive nature, according to its company statement. However, the company added it will continue to cooperate with the competition Commission and their current investigation until its finality.

The investigation is a result of the Competition Commission’s probe into recent mergers within the industry, said Willowton. This was confirmed by Bonakele, who said that the Competition Commission is determined to eliminate the exploitation of consumers by cartels that it claims are  prevalent in this sector.

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