Cape Gate faces penalties for price-fixing

THE Competition Tribunal has found that steel producers Cape Gate (Pty) Ltd (Cape Gate) contravened a section of the Competition Act by participating in price-fixing in the market for the purchase of scrap metal in South Africa.

- CHEVON BOOYSEN

Cape Gate and three other scrap metal buyers – ArcelorMittal, Columbus Stainless, and Scaw South Africa – were found to have operated as a cartel when buying scrap metal from merchants.

Following the finding, Cape Gate said they will appeal the decision.

Cape Gate chairman, Oren Kaplan, said: "Cape Gate is extremely disappointed in the finding. The matter was argued in mid-2019 and the Tribunal took more than six years to produce a decision. The Tribunal failed to take any cognisance of the fact that the pricing formula in issue was the outcome of transparent negotiations between the scrap buyers and the scrap merchants.

"It was not imposed by the scrap buyers, including Cape Gate. Both the DTI (department of Trade and Industry) and the Competition Commission were fully aware of these negotiations and the pricing formula, which was aimed at keeping scrap within South Africa for the benefit of the country's steel consumers. Cape Gate has always vehemently denied that this can be characterised as collusive cartel conduct. It has already filed an appeal against the decision in the Competition Appeal Court," said Kaplan.