Unilever Gains Delay in South Africa Spreads Dispute
November 07 2017 - 5:45PM
Dow Jones News
By Saabira Chaudhuri
Unilever PLC has won a temporary respite in a case alleging the
company colluded with another firm to divide up the spreads market
in South Africa.
South Africa's Competition Commission earlier this year
recommended a fine equivalent to 10% of Unilever's local revenue,
alleging the Anglo Dutch company colluded between 2004 and 2013
with oil and fat specialist Sime Darby Hudson & Knight Ltd. to
drive up prices in the local market for edible oils and margarines.
The commission's case alleges that an agreement between the two
companies meant Sime Darby was prevented from making certain pack
sizes of oils and fat, leaving these reserved for Unilever.
Sime Darby last year agreed to pay a $2.5 million fine for
anticompetitive behavior and invest in a new packaging and
warehousing facility that would produce the smaller packs of
spreads the company had allegedly agreed with Unilever it would
refrain from making.
But on Tuesday, the Competition Tribunal, to whom the case had
been referred for a final ruling, said the commission needed to
file more material to clarify its case against Unilever, describing
the referral as "vague and embarrassing."
Unilever in September had asked the tribunal to order the
commission to amend its complaint, saying it was confusing and
lacked specificity.
It is unclear how much Unilever, which generated EUR52.7 billion
($61.2 billion) in revenue last year, makes in South Africa.
Unilever declined to comment, saying the case is continuing.
According to the tribunal, Unilever isn't seeking to dismiss the
case provided its request for the complaint to be amended is
upheld.
The commission now has 15 days in which it must clarify its
case, including explaining which agreements it is relying on to
make its allegations. Once the commission's response has been
received, Unilever has 20 days to respond.
Unilever in September announced a deal with South Africa
investment holding company Remgro Ltd. to swap its Southern African
spreads business for full control of its South Africa subsidiary --
of which Remgro was a major shareholder -- in a roughly $900
million deal. Unilever is still looking for a buyer for the
remainder of its spreads business after fending off an unwelcome
$143 billion acquisition approach from Kraft Heinz Co.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
November 07, 2017 17:30 ET (22:30 GMT)
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