Hole found in witness’s evidence on alleged tyre price collusion

Yesterday was the second day of a 19-day hearing into alleged price fixing by Goodyear and Continental. The two companies have denied the allegations.

Yesterday was the second day of a 19-day hearing into alleged price fixing by Goodyear and Continental. The two companies have denied the allegations.

Published Feb 2, 2022

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A witness providing evidence of meetings between the four major tyre manufacturers admitted to the Competition Tribunal yesterday that he might have forgotten who was present at a January 2000 meeting to allegedly fix prices between the four major tyre manufacturers, as alleged by the Competition Commission.

Yesterday was the second day of a 19-day hearing into alleged price fixing by Goodyear and Continental. The two companies have denied the allegations, while Bridgestone in 2009 was granted conditional immunity from prosecution in terms of the Commission’s corporate leniency policy.

Apollo Tyres, then known as Dunlop, settled with the commission in 2011 by paying a R45 million fine. The SA Tyre Manufacturing Conference is also opposing the case.

Bridgestone’s former divisional head of sales and marketing, Shaun Wustmann, who kept notes of meetings he attended with representatives of the tyre companies where he claimed the price increases and their co-ordination were agreed upon, was cross-examined by Goodyear’s legal counsel, Anthony Gotz, yesterday morning before the Competition Tribunal.

Gotz said contrary to claims by Wustmann that the managing directors (MDs) of the four tyre makers were present at a meeting in January 2000 to discuss tyre prices, the MD of Dunlop named by Wustmann had testified that he wasn’t MD at the time and would only move to South Africa about 16 months later.

Wustmann conceded his “memory may be incorrect” in this instance.

Gotz said the MD of Continental Tyres, as named by Wustmann as an attendee at the meeting, was not an employee of Continental at the date of the alleged meeting and would only become its MD in 2005.

Gotz said there appeared to be “not a single sentence” in the notebook that accorded with allegations that there was an agreement to co-operate on prices and that there would be a meeting of salespeople thereafter to implement this.

Gotz also questioned Wustmann’s claims regarding an alleged price-fixing meeting between the four manufacturers in January 2002, when Goodyear had publicly announced an annual 11 percent price increase six weeks prior to this, in December 2021.

Wustmann, after further questions, also claimed that while, for instance, a 5 percent annual increase might have been agreed by tyre manufacturers in those years, they “all played games with one another” in that they rather implemented many different “list price” increases according to a variety of factors including the age of the tyre models being sold, volumes being sold and other factors.

The commission had contended that the four competitors had met at OR Tambo International Airport on January 27, 2000, where the manufacturers focused on the fact that manufacturing costs in South Africa were high, and that price adjustments were required because the tyre manufacturers were feeling the pressure of raw material costs and the drop in the exchange rate.

The initial complainant in the case was Parsons Transport, which had complained that the major tyre manufacturers worked with each other to set and manipulate the prices for their tyres in South Africa.

BUSINESS REPORT

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