Iconic South African companies in serious trouble for price fixing
The Competition Commission has found that PG Glass and Glasfit have been operating a cartel, working together to set prices.
The Commission has referred a complaint against the two companies to the Competition Tribunal for prosecution.
The commission received the complaint against the glass providers who “compete” in the market for the distribution and fitment of automotive glass.
PG Glass is one of South Africa’s largest and most iconic glass manufacturers and installers, with a history dating back to 1897. Glasfit is a younger company, founded in 1989.
The companies are alleged to have entered into an agreement and/or engaged in a concerted practice to fix the prices of automotive glass products they supply to end-user customers and insurance companies.
This would constitute price fixing, which is prohibited under the Competition Act of 1998. The conduct was alleged to have started in 2004 and remains ongoing.
An investigation from the Competition Commission found that PG Glass and Glasfit have a longstanding agreement to increase the price of automotive glass they supply to customers.
The companies were found to increase prices by the same percentage point annually.
“Automotive glass forms part of industrial intermediary products, a priority sector for the commission,” said Commissioner Doris Tshepe.
“Dismantling of the alleged cartel will contribute towards fairer pricing of automotive glass for the benefit of consumers as well as insurance companies.”
The Commission has now sought an order from the Tribunal declaring that the respondents have contravened the Competition Act.
It suggested that the two companies be given an administrative penalty equal to 10% of their respective turnover.
BusinessTech asked PG Glass and Glasfit for comment, and will add it once received.
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