CAPE TOWN - Fertilizing group, Omnia has filed an application in the Pretoria High Court to have phosphate producer, Foskor and its directors declared in contempt of court.
This comes after Foskor failed to adhere to an order of the Competition Tribunal. The order restricted Foskor’s pricing of phosphoric acid to the local market since mid-2014.
Prior to this, the Competition Tribunal made an order in 2010, confirming that Foskor had engaged in excessive pricing contravention of the Competition Act.
The Competition Tribunal ruled that the phosphate producer may not charge more than the Free on Board (FOB) Richards Bay price for phosphoric acid.
Despite this, Foskor charged more than this stipulated price from mid-2014 onwards.
Omnia then took action by applying to the High Court to enforce the Tribunal order.
In October 2015, the High Court ruled in favour of the fertilizing group.
"Foskor has intentionally and unlawfully flouted the order of the High Court to the detriment of the country and its people", says CEO of Omnia, Adriaan de Lange.
Despite a clear order which confirmed that Foskor is not permitted to charge local customers more than the FOB Richards Bay price for phosphoric acid, Foskor has insisted that it will not supply Omnia with phosphoric acid if it seeks to reserve its rights when paying the higher price demanded by Foskor, or if Omnia pays the higher price under protest.
Foskor is insisting that local customers sign letters agreeing to these terms and has stopped supplies of phosphoric acid to those local customers who do not.
"This practice took place despite a Competition Tribunal order and resulted in us embarking on extensive litigation to rectify the situation", adds de Lange.
The fact that Foskor is refusing to supply local fertilizer producers and animal feed suppliers is unacceptable. Especially during the primary agricultural growing period, says Omnia.
"Omnia is continuing to pursue the matter through the courts to ensure that the High Court judgement is upheld and that Foskor’s approach is stopped immediately. Its action, at this critical planting time following the first summer rains, endangers the food supply chain of South Africa, and can only be regarded as unacceptable and highly irresponsible", concludes de Lange.
- BUSINESS REPORT ONLINE