The Competition Commission investigated beef processing companies, Irvin & Johnson (I&J) and Karan Beef for cartel conduct.
The two companies have been charged with dividing markets in the supply of processed beef products such as beef burger patties, steak sizzlers, crumbed beef steaklets, viennas, and boerewors.
Head of Cartel at the Competition Commission, Makgale Mohlala explained how the agreement between these two will negatively affect the market and consumers.
Consumers will inevitably suffer because when I&J is the only player, which is no longer facing the competition from Karen Beef, it will have a choice of how they want to price their products because there is no one competing with them.— Makgale Mohlala, Head of cartel at the Competition Commission
Cartels by their very nature are designed to inflate prices so consumers will suffer because of lack of competition. They will have to pay higher prices because of this agreement.— Makgale Mohlala, Head of cartel at the Competition Commission
According to Mohlala, Karen Beef has admitted that they have contravened the Competition law and have since settled with the Commission. The settlement of R2.7 million was completed in August this year, says Mohlala.
He says I&J refused to settle and the matter has been referred to the Competition Tribunal where they will be prosecuted with the assistance of Karen Beef.
To hear the rest of the conversation with Makgale Mohlala, listen below:
This article first appeared on CapeTalk : Two beef processing companies face charges of cartel conduct