Further penalties for South African wire mesh cartel

By Helen Wright15 May 2012

The South African Competition Tribunal has imposed fines totalling ZAR 27.2 million (US$ 3.3 million) on the last two players in a wire-mesh cartel that was exposed in 2008.

Reinforcing Mesh Solutions (RMS) and Vulcania Reinforcing were ordered to pay penalties of ZAR 5.6 million (US$ 686000) and ZAR21.6 million (US$ 2.6 million) respectively for their role in the cartel, which Vulcania had been involved in from January 2006 to January 2008 and RMS from January 2004 to January 2008.

Wire Mesh is used by the construction industry to reinforce concrete. In its ruling, the competition authority noted that the two companies, as the smallest players in the cartel, were not instigators and had been, in some respects, coerced to join. As a result, the penalties were smaller than they otherwise would have been.

The cartel was exposed in 2008, when Murray & Roberts, the owners of BRC Mesh Reinforcing, approached the South African Competition Commission and applied for corporate leniency. This was granted, and Murray & Roberts then pointed the finger at other companies that had been involved - Steeldale Mesh, a subsidiary of Aveng, as well as RMS and Vulcania.

In March last year, Aveng reached a ZAR 129 million (US$ 18.7 million) settlement with the South African Competition Commission over its role in the cartel.

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