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October 31st, 2009
- General
Pretoria South Africa - Meshco wants special treatment
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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. Keith Weeks, head of law enforcement and exemptions at the Competition Commission, says 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 (when it was still Iscor) charged higher prices on shorter terms than its competitors did for soft wire (low-carbon wire rod). The wire is used for, inter alia, 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 favourable 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 favourable credit terms and prices to companies in the Allens Meshco group.
Allens Meshco is asking for a two-year exemption from the provision of the act.
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