South African tyre firm fined R45 million for price-fixing

24 November 2011

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22 November 2011 | Angeline Albert

Apollo Tyres South Africa has been fined R45 million (US$5.4 million) having admitted involvement in a cartel to fix the price of tyres.

The company – known as Dunlop Tyres International before being taken over – has entered into a settlement agreement with the Competition Commission South Africa (CCSA), where it must pay 4.75 per cent of its 2008 turnover.

The CCSA alleged the anti-competitive practices involved a group of tyre makers agreeing pricing and price increases between 1999 and 2007 for the manufacture and supply of tyres. These were then bought by vehicle manufacturers and government purchasers, who bought tyres for state-owned vehicles through the State Tender Board.

The investigation was the result of a complaint by a fleet owner, claiming the manufacturers simultaneously adjusted prices around the same time and within the same parameters.

Apollo agreed to settle with the CCSA after it referred the findings of its investigation into four manufacturers – Apollo, Goodyear South Africa, Continental Tyre South Africa and Bridgestone South Africa – and trade association the South African Tyre Manufacturers Conference to the Competition Tribunal on 6 September.

Bridgestone South Africa has been granted conditional immunity from prosecution, after admitting its involvement in the cartel. The company said it discussed with competitors how to coordinate the timing and average percentage price increase of tyres.

The maximum fine the Tribunal can impose on SATMC, Goodyear and Continental, is 10 per cent of each organisation’s annual turnover. A date for their tribunal hearing has not yet been set.

None of the organisations involved has responded to SM’s request for comment.

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