Apollo admits South African cartel activities

ERJ staff report (DS)

Pretoria -- South Africa's Competition Commission has entered into a settlement agreement with Apollo Tyres South Africa (“Apollo”), in which Apollo admits that it took part in the tyre manufacturers' cartel. The cartel involved the main tyre manufacturers in agreeing on pricing and price increases, known amongst them as “coffee table talks”.

Apollo Tyres has agreed to pay a penalty of R45 million (euro 4 million) which represents 4, 75 percent of its 2008 total turnover.

The agreement follows the Commission's referral on 6 September 2010 of the findings of its investigation against the South African Tyre Manufacturers Conference (Pty) Ltd (“SATMC”) and four local tyre manufacturers and suppliers namely, Apollo, Goodyear South Africa (Pty) Ltd, Continental Tyre South Africa (Pty) Ltd and Bridgestone South Africa (Pty) Ltd (“Bridgestone”) to the Competition Tribunal for adjudication. Bridgestone was granted conditional immunity by the Commission following its application for corporate leniency.

The Commission's investigation revealed that the cartel operated during the period 1999 to at least 2007. The tyre manufacturers agreed on price increases, timing of price increases and implementation thereof. It further found that the SATMC was used as a platform to conduct these discussions.

The cartel concerned the manufacture and supply of passenger tyres, light truck/commercial tyres, trucks and bus tyres, off the road tyres, agricultural tyres and earthmover tyres in South Africa. The main customers of these products are tyre dealers who purchase tyres for resale to consumers, vehicle manufacturers who purchase tyres for new vehicles models and the government which procures tyres for state owned vehicles and fleets through a tender process managed by the State Tender Board.

This is an external link and should open in a new window. If the window does not appear, please check your pop-up blocking software. ERJ is not responsible for the content of external sites.

Press release from South Africa's Competition Commission