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ZCC writes to SA’s competition body over Omnia, Sasol ‘collusion’ on fertilizer pricing

ZCC writes to SA’s competition body over Omnia, Sasol ‘collusion’ on fertilizer pricing
By Chibaula Silwamba
Wed 23 June 2010, 15:30 CAT

THE Zambia Competition Commission (ZCC) has written to South Africa’s Competition Commission to find out how Omnia and Sasol’s alleged over pricing of fertilizer might have affected the Zambian economy.

According to South Africa Competition Commission, it found that there was a coordinated practice and/or understanding between Omnia, Sasol and Kynoch whereby the price of fertilisers was fixed and maintained at certain levels.

It stated that its investigation revealed that Omnia, Sasol and Kynoch conspired to limit price competition amongst them in order to fix, raise and maintain higher prices of fertilisers as well as to maintain their market share.

The commission stated that these practices amounted to price fixing within the meaning of the Competition Act and are out rightly prohibited.
Sasol admitted the charge and paid a fine, though Omnia and Kynoch continue denying the charge.

When contacted for a comment, Zambia Competition Commission (ZCC) executive director Thula Kaira said fertiliser was a complex business.

“We are aware, I think, it’s public knowledge for those who read international publications that Omnia and Sasol were found to have contravened the competition law of South Africa as they engaged in a cartel in the south African market. So we have been in touch with our colleagues from South Africa to learn from them how they carried out that research investigation and what matters they found out that we could learn from and apply within the domestic economy here,” said Kaira. “As you may be aware Omnia and Sasol do not produce any fertilizer in Zambia but they import from South Africa. So we try to understand from that how that case has any effects, if any, on the Zambian market. So we are still waiting for more information about that from our friends in South Africa.”

The Zambian government has contracted Nyiombo, Omnia and Nitrogen Chemicals of Zambia (NCZ) to supply fertiliser for the 2010/2011 farming season.

The parliamentary Public Accounts Committee (PAC) in March this year questioned the government over the continued awarding of contracts to Nyiombo Investments and Omnia for the annual supply of fertiliser under the Farmer Input Support Programme (FISP).

In response, agriculture permanent secretary Dr Abednigo Banda claimed that the companies had continued getting the contracts for the supply of fertiliser because they met all the tender requirements.

Labels: FERTILIZER, ZCC

posted by MrK @ 5:54 PM