'Milk cartel' ruling will set precedent

Clover's application to have Competition Tribunal hearings into an alleged milk cartel quashed could set a precedent for how anticompetitive complaints are handled in future.

The milk company yesterday asked the tribunal to have hearings — set for September — cancelled. Clover argued the time between the Competition Commission's receipt of the complaint and the referral exceeded a year. As a result, the complaint had expired, or prescribed.

However, the commission argued the investigation was not brought about through an interested party laying a complaint, but by a probe that it instigated.

In December 2006, the commission referred cartel charges against eight dairy processors to the Competition Tribunal, saying it had found evidence of price-fixing for raw and retail milk. The eight companies were Clover Industries, Clover, Parmalat, Nestlé, Woodlands Dairy, Lancewood, Milkwood Dairy and Ladismith Cheese.

The referral followed a probe of the alleged cartel after the authorities received a letter claiming there was price-fixing in the southern Cape in 2004.

Yesterday, arguments from both sides hinged on the definition of a complaint. Under the Competition Act, should an interested party lay a complaint, the commission has a year to refer a decision to the tribunal. There is no time limit if the commission instigates the probe.

Advocate David Unterhalter argued, on behalf of Clover, that the initial letter complaining of anticompetitive practices in the milk industry qualified as a complaint and the year time limit meant the case should have been referred in 2005.

Advocate Rafik Bhana, on behalf of the commission, argued that submission of information was not a complaint.

The tribunal will assess the arguments and make a decision.

Source: Business Day

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