Rooibos Ltd in hot water for monopolising the market

Competition Commission spokesperson Sipho Ngwema says Rooibos Ltd exclusionary contracts with farmers are in contravention of the Competition Act. He says Rooibos Ltd has locked in volumes of rooibos tea production from commercial farmers in the company’s favour.

Now the Commission has approached the Competition Tribunal for an order declaring that Rooibos Limited has violated market laws.

According to Mgwema, rooibos is only limited to the Western Cape and in addition Rooibos Ltd controls about 60% of the market.

They have locked in a lot of supply with the farmers and that is contravention of the Competition Act.

Sipho Mgwema, Competition commission spokesperson

The exclusionary nature of those agreements means there is eventually no supply for the rest and the others suffer in that situation.

Sipho Mgwema, Competition commission spokesperson

Martin Bergh, MD at Rooibos Ltd says he still needs clarity on why they are investigated for contravening competition laws when they don't harvest the tea. He says they only do primary processing of the product that the farmers producers.

In 2013, a client approached them and asked for a five year contract in order to have a smooth purchasing process. Bergh says they facilitated the process in which some farmers went into a five year contract with the client.

To his surprise, he was then told they investigated for being anti competitive when they simply facilitate the purchasing process.

The contract doesn't stop any of their competitors from buying from those farmers, says Bergh.

To hear the rest of the interview, listen below:


This article first appeared on CapeTalk : Rooibos Ltd in hot water for monopolising the market


Recommended

by NEWSROOM AI
Read More
Competition Commission raids meat suppliers (for alleged price fixing)

Competition Commission raids meat suppliers (for alleged price fixing)

Bruce Whitfield interviews Karan Beef CEO Arnold Pretorius. His company is one of the suppliers under investigation.

Claims that drug companies overpricing generic cancer drugs

Claims that drug companies overpricing generic cancer drugs

The Competition Commission says it will investigate drug companies for allegedly keeping prices of cancer-drugs artificially high.

More pharmaceutical companies may be implicated in price fixing -Cancer Alliance

More pharmaceutical companies may be implicated in price fixing -Cancer Alliance

Three major companies are being investigated for the suspected excessive pricing of life saving cancer medication in the country.

Three pharmaceutical companies probed for excessive pricing of cancer drugs

Three pharmaceutical companies probed for excessive pricing of cancer drugs

The three companies being investigated by the Competition Commission are generic Aspen Pharmacare, Roche and Pfizer.

SIU to probe TNA Business Breakfast contracts - SABC Board chair

SIU to probe TNA Business Breakfast contracts - SABC Board chair

SABC Board Chairperson Khanyisile Kweyama says the SABC did not generate any revenue from the TNA Business Breakfast contract.

Popular articles
10 best business books reviewed on The Money Show in 2018

10 best business books reviewed on The Money Show in 2018

Know someone who’d appreciate a business book for Christmas? These were the best ones of the year…

'The corrupt use anti-corruption campaigns to divert attention from themselves'

'The corrupt use anti-corruption campaigns to divert attention from themselves'

Political analyst Steven Friedman says corrupt people use anti-corruption campaigns to neutralise those fighting corruption.

ANCWL calls on the ANC to suspend Pule Mabe

ANCWL calls on the ANC to suspend Pule Mabe

ANC Women's League says Mabe must be suspended pending the outcome of a sexual harassment complaint lodged against him.

'Evidence is solid. Poor people’s money was used illegally. Shivambu benefitted'

'Evidence is solid. Poor people’s money was used illegally. Shivambu benefitted'

Ray White interviews Pauli van Wyk, an investigative journalist with Scorpio at Daily Maverick.

RMB and a paediatric surgeon from Baragwanath came together to save little lives

RMB and a paediatric surgeon from Baragwanath came together to save little lives

Ray White interviews Prof Jerome Loveland (Paediatric Surgery at Wits and Baragwanath) and Gareth Armstrong (Rand Merchant Bank).

ANC Spokesperson Pule Mabe accused of sexual harassment

ANC Spokesperson Pule Mabe accused of sexual harassment

In a letter seen by Eyewitness News a 26-year-old woman says Mabe wanted to have sex with her in exchange for a job as his PA.

[LISTEN] EFF's Floyd Shivambu was a beneficiary of stolen money - Pauli van Wyk

[LISTEN] EFF's Floyd Shivambu was a beneficiary of stolen money - Pauli van Wyk

Journalist Pauli van Wyk outlines how VBS approved Brian Shivambu’s R1. 46m home loan, with a little help from his brother.

[WATCH] Johnny Clegg opens up about emotional 'The Crossing' video

[WATCH] Johnny Clegg opens up about emotional 'The Crossing' video

South African legend, musician Johnny Clegg talks about the moving recording of his track The Crossing by over 50 artists.