SAB questions authority

SAB questions authority of regulator

FMCG SUPPLIER NEWS

Business Day - Apr 6th 2011, 00:00

PRETORIA — The world has changed for antitrust regulators in SA and the Competition Tribunal had to recognise that, South African Breweries (SAB) said yesterday as it argued for the regulator to set aside the complaint referred to it by the Competition Commission. 

The commission no longer had the freedom to expand the scope of complaints brought to it — as it had done in the past — before referring them to the tribunal, as the Supreme Court of Appeal’s December ruling in the so-called Woodlands case had curbed the watchdog’s ability to do that, David Unterhalter SC argued yesterday for the brewer. "The world after Woodlands is a different world, but it is a world that applies to actions taken years before."

This week’s application by SAB to throw out the case brought against it, of charges including price discrimination and carving up markets, poses a challenge to the way the commission conducts its business. The brewer says the commission’s case goes against the Woodlands ruling, even though that ruling came more than three years after the commission’s 2007 referral.

This application has less to do with the goings-on in the beer market than constituting a challenge that will partly determine how competition law is enforced in SA. In seeking to have the tribunal declare it cannot hear the complaint brought against it, SAB is pushing the tribunal to accept limits to its remit that will affect how it rules not only in this case, but in others to come.

SAB says the commission’s case against it differs so much from the complaint made by independent liquor wholesaler Nico Pitsiladi in 2004 that it cannot legitimately be heard.

Mr Pitsiladi’s complaint was that SAB did not give him discounted beer, putting him at a disadvantage to the brewer’s own wholesale distribution operations, SAB says. The commission says that initial complaint can be expanded to scrutinise SAB’s system of discounts to its 13 so-called appointed distributors, as well as to look at charges of market allocation and price discrimination.

SAB says if the commission wants to widen the case in that way, judgments such as Woodlands specify it should have done so by formally amending the complaint or by initiating new ones. Because it did not, the tribunal cannot hear the commission’s complaint, Mr Unterhalter said.

The assertion caused some sparring with members of the tribunal, who said such an interpretation could tie up the commission in red tape and hamper its ability to function. "We set up the commission, but its powers are so curtailed that if (we) don’t accurately list every piece of anticompetitive behaviour under the (Competition) Act that the commission can’t do anything… why have we set up the institution?" asked tribunal member Yasmin Carrim.

The commission’s counsel told the tribunal SAB’s overly prescriptive interpretation of the recent judgments gave itself too much wiggle room to escape sanction.

The application hearing is likely to be completed today , with the tribunal ruling tomorrow.