Unilever Gains Delay in South Africa Spreads Dispute

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 [e-mail]

(END) Dow Jones Newswires

November 07, 2017 17:30 ET (22:30 GMT)

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