Uniliver factory in Borburg Ekurhuleni.photo by Simphiwe Mbokazi 453

Johannesburg - There is no smoke without fire: this was the general view shared by industry analysts yesterday after news broke that Unilever South Africa and Sime Darby Hudson & Knight were being investigated by the Competition Commission for collusive conduct.

The commission conducted search and seizure operations at Unilever SA’s headquarters in uMhlanga north of Durban and Sime Darby Hudson & Knight’s offices in Boksburg, Gauteng yesterday.

The raid formed part of the commission’s continuing investigation into collusive conduct in the markets for the manufacture and supply of edible oils and margarine to wholesale and retail customers.

Sime Darby Hudson & Knight, which services the food manufacturing industry, is a privately owned company specialising in fats and oils. Unilever is a global manufacturer and brand owner in food, spices, detergents, margarine, cooking oil and beauty care among others. Its brands in the margarine and oil category include Rama, Flora and Stork.

The commission was conducting the seizure operations with due regard to the rights of both Unilever SA and Sime Darby Hudson & Knight and all affected persons, it said yesterday.

Yesterday, it seized documents and electronic data to help determine whether a contravention of the Competition Act had taken place.

“The commission has reasonable grounds to believe that information relevant to this investigation is in the possession of employees of the two companies,” it said in a statement.

In terms of section 48 of the Competition Act, the watchdog is authorised to enter and search premises and seize documents that have a bearing on an investigation. It had also obtained warrants authorising it to search the offices of Sime Darby Hudson & Knight and Unilever from the North Gauteng High Court and the KwaZulu-Natal High Court.

Industry experts said that, regardless of the outcome of the commission’s investigation, the raid would damage the companies’ reputation.

The acting commissioner, Tembinkosi Bonakele, said: “The commission believes that the information that will be obtained from today’s [yesterday’s] operation will enable the commission to determine whether or not Unilever and Sime Darby Hudson & Knight have indeed engaged in collusive conduct.”

He urged any business or individual with further information to come forward to assist with the investigation.

Abri du Plessis, the chief investment officer at Gryphon Asset Management, said Unilever was a reputable company with a reputable management team and this action proved that any organisation could not control all its employees.

“It’s unfortunate that even a reputable company is not always safe. But I also have a feeling that where there is smoke there is fire,” he said.

Du Plessis said if what had happened in other Competition Commission cases over the past couple of years, especially in the food production industry, was any guide, the commission would not spare anybody.

“This is not a good story for Unilever,” he stressed.

An independent retail analyst, Syd Vianello, agreed that the commission’s raid would have a negative impact on Unilever’s reputation. - Business Report