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SA margarine fight: Unilever agrees to R400m settlement with competition watchdog

| Supplier news

SA's top anti-trust adjudicating body on Monday confirmed a nearly R400 million settlement agreement between Unilever and competition authorities over the alleged market division of margarine.

The order will see the global consumer goods company will pay a R16 million administrative penalty, while making substantial investments in procurement and supplier development that bring the total settlement to just under R400 million. The settlement agreement, in which Unilever does not admit liability, is full and final.

The case in question dates back six years when the Competition Commission, which acts as an investigating and prosecuting body, accused Unilever and Malaysian firm Sime Darby Hudson Knight of dividing markets in the edible fats and oil industry in SA between 2004 and 2012.

At the time, the commission said when Unilever sold its refinery business to Sime Darby in 2004, the parties had reached agreements, including that Unilever would not supply industrial customers with its Flora-branded edible oils. Among other agreements, Sime Darby allegedly agreed not to supply retail customers with its Crispa-branded edible oils. Sime Darby settled the matter with the commission in July 2016.

The tribunal said in a statement on Monday the confirmation of Unilever’s settlement followed a hearing last Tuesday, during which the tribunal "exercised its inquisitorial powers to interrogate the terms of the agreement and heard submissions from both the commission and Unilever".

Apart from the administrative penalty Unilever was paying, it would establish and administer an enterprise supplier development fund valued at R40 million, which will provide interest-free business loans to qualifying black-owned manufacturing, logistics and wholesale industries. It will also provide interest-free business loans to qualifying black-owned companies needing startup funds to enter those sectors.

Unilever would also increase its local procurement of products and services from companies in SA by a minimum of R340 million for four years. It would also donate hygiene, disinfectant and oral products to public schools for five years and valued at R3 million.

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