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POwer cables

The Association of Electric Cable Manufacturers (AECMSA) were fined by the Competition Tribunal South Africa for price fixing wire cables used primarily for Eskom, big business and municipalities.

The Tribunal is considering a settlement agreement today involving the Association of Electric Cable Manufacturers South Africa, which has admitted to its involvement in fixing the selling price of electric power cables to customers.

In March 2010, the Competition Commission initiated a complaint against Abedare Cables, Tulisa Cables, Alvern Cables and South Ocean Electric Wire Company for possible cartel activity in the market for the supply of electric cables.

A few months later, the complaint was amended to include more electric cable manufactures and AECMA.  The manufacturers named in the complaint referral are: Alvern Cables, South Ocean Electric Wire Company, Tulisa Cables, Alcon Marepha, CBI-Electric: African Cables, Phoenix Power Cables, Cabcon Technologies, Silcom, Malesela Taihan Electric Cable, Kewberg Cables & Braids, Norco Cables and Aberdare Cables and AECMSA.

Aberdare Cables was granted conditional corporate leniency in March 2012. Malesela Taihan Electric Cable paid a penalty of R20,2 million, ATC agreed to pay R80,74 million and South Ocean Holdings R13,3 million.

In its complaint referral, the Competition Commission alleges that suppliers of electric cables agreed on input prices or costs in respect of raw material input products necessary for the manufacturing of power cables. The Commission further submits that the alleged conduct pre-dates the Competition Act and endured until August 2012.  

The Competition Commission further alleges that a pricing formula was used by AECMA to calculate the prices of electric power cables;  based on indicators of inputs such as copper, lead, aluminium, fully galvanised wire, polyethylene, rubber and silicone, among other materials. The prices of these inputs fluctuate on a monthly basis. Further, the indices were used when quoting for long-term and short-term or tender contracts issued by various tender customers.

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