The offices of Dunlop Tyres International, Bridgestone SA and the industry body, the South African Tyre Manufacturers Conference (SATMC), were raided last Friday and documents related to alleged price-fixing seized, the antitrust body said. The investigation was prompted by a complaint from Parsons Transport , which alleged that tyre manufacturers had co-ordinated price adjustments.

Nandi Mokoena, a senior analyst with the Competition Commission, said the investigation had been going on for some time. The investigation is the latest of several probes into anti-competitive behaviour over the past year.

Cases of collusion in the milk and pharmaceuticals industries have been referred to the Competition Tribunal for prosecution, while penalties of R99m and R146m have already been dished out to Tiger Brands for its role in bread and milling cartels, and to New Reclamation Group for collusion in the scrap metals industry.

The maximum penalty for transgression is 10% of turnover.

Alwyn Parsons, a director of Parsons Transport , said yesterday that tyre manufacturers had adjusted prices at regular intervals, blaming the weakening exchange rate, but increases continued even after the rand strengthened.

"The price would go up by several percentages every two to three months. We then wanted to import product from China, but from a price point of view that was also difficult, because an anti-dumping application (against tyres from China) had been brought (by the manufacturers)." Goods under dumping investigation usually carry a temporary duty.

"The manufacturers really had a stranglehold on the market," Parsons said.

A complaint has been brought against the SATMC, which is believed to have provided a platform for "coffee table discussions" on price increases.

Bridgestone spokesman Romano Daniels said the company would co-operate fully with the commission because it did not believe anything untoward had taken place.

"Our price increases are dictated by market conditions and in a large part relate to sharp oil price increases, which is a major input cost for us . The exchange rate is also a factor, because most of our input materials are imported," he said.

The SATMC declined to comment, and Dunlop could not be reached for comment.

Business Day (Johannesburg)

11 April 2008

Mathabo Le Roux

Johannesburg

Source: allafrica.com