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PRETORIA – NTK Limpopo Agri, a wholly-owned subsidiary of the VKB Group, has been fined R3.64 million for price fixing conduct in the milled white maize market in contravention of the Competition Act.

The Competition Tribunal confirmed yesterday that a settlement agreement was entered into between NTK and the Competition Commission in terms of which the company admitted engaging in anti-competitive conduct with its competitors.

NTK agreed to pay the fine, which represented 5 percent of its affected turnover in its 2007 financial year.

The settlement agreement followed the commission initiating a complaint against Tiger Brands, Pioneer Foods, Foodcorp, Pride Milling and Progress Milling in March 2007, which was 
subsequently amended to include 11 other players in the maize milling industry.

A number of these companies had previously agreed to pay the fines in terms of settlement agreements that had been reached with the commission and had been confirmed by the tribunal.

The complaint was initiated after the commission received a corporate leniency application from Premier Foods in 2007, which was corroborated by a further corporate leniency application by Tiger Brands in the same year.

Nokuphiwa Kunene, appearing for the commission, told a tribunal hearing yesterday that the commission's investigation found that the price fixing conduct in the milled white maize market had taken place in the form of various meetings at regional and national level.

Kunene said attendees at these meeting also held telephone discussion where they had reached agreements to fix the prices of milled white maize products to create uniform price lists for wholesaler, retail and general trade customers.

She said that these agreements had also been used to determine the timing and implementation of price increases.

Kunene said the commission found that NTK had attended meetings in October 2006, where it had reached collusive agreements with its competitors to fix the price of white maize meal products and the timing of price increases.

Daryl Dingley, appearing for the VKB Group, said NTK was acquired by the VKB Group in 2008 and was given a warranty that it did not have any competition challenges.

But Dingley said it later transpired that NTK was involved in this cartel conduct.

Dingley said NTK was now a wholly-owned subsidiary of the VKB Group, but was a dormant company in the group.

He confirmed the VKB group had undertaken to pay the penalty and its payment would not be an issue.