R101m settlement finally ends 9yr dispute between CompCom, Willowton
A nine-year battle between Willowton Group and the Competition Commission, over allegations of price fixing and market division in the edible oils sector, has finally come to an end, with the Competition Tribunal confirming a consent agreement has been reached.
Image source: jcomp from Freepik
The consent agreement, confirmed as an order by the Tribunal, includes a settlement amount of R1m by Willowton and public-interest commitments valued at R100m over the next five years.
The case dates back to December 2016 when the Commission launched an investigation into Willowton, Wilmar, FR Waring, Africa Sun Oil, Epic Foods, Sea Lake, and Unity Food Products for alleged price fixing and market division, in contravention of the Act.
The investigation focused on claims that these companies colluded to fix prices and divide markets for edible oils, including baking fats and margarine, dating back to 2007.
Despite a series of legal challenges by Willowton and protracted litigation, both parties have finally reached an agreement, the full terms of which can be accessed on the Tribunal’s website here.
Terms of the consent agreement
Willowton agrees to make payment of a settlement in the amount of R1m.
Willowton has further agreed to public interest commitments aggregating to an amount of R100m over a period of five years for the promotion of the public interest in the spirit of the public interest objectives of the Act. These commitments are:
The Willowton Group undertakes that an education trust will be set up as the Shoaib Moosa Education Trust or Dawood Hassam Moosa Education Trust. (The late Shoaib Moosa who passed away on 15 October 2024, lost his teenage son on 30 October 2022).
The education trust will be set up as a bursary fund and the Willowton Group will donate a total amount of R20m over a five-year period (that is, R4m per year for a period of five years).
These funds will be available for tertiary education students who are in most need of financial support and who are historically disadvantaged persons from underprivileged schools. The recipients of such bursaries shall comprise at a minimum, 60% female students.
The Willowton Group undertakes to, within 90 days of confirmation of this agreement as an order of the Tribunal, advertise in national newspaper and/or electronic media as well as social media platforms the details of the bursary fund inviting applicants to submit applications.
- Food and grocery support to NGOs and NPOs
The Willowton Group undertakes to make a donation of food products and groceries manufactured by it to the value of R30m over a five-year period (that is, R6m per year for five years).
The objective of this commitment is to address hunger and poverty in the most underprivileged communities, and therefore, Willowton's food and grocery donations will be to registered non-governmental/ non-profit organisations [NGOs/NPOs] that cater for historically disadvantaged persons.
The Willowton Group undertakes to, within 30 days of confirmation of this agreement as an order of the Tribunal, advertise in national newspaper and/or electronic media as well as social media platforms calling upon qualifying NGOs/NPOs to submit applications for donation.
The Commission should be informed of and approve the NGOs that will be responsible for the administration of the abovementioned commitments.
- Procurement from Black Economic Empowerment service providers
The Willowton Group also undertakes to procure products and/or services, including logistics services, from Level 1 B-BBEE-owned companies to the value of R50m over a five-year period (that is, R10m per year for five years).
No admission of liability
Willowton denies that it has contravened the Act as alleged by the Commission.
Due to the High Court litigation, the investigation and resolution of this matter had been delayed, with no findings made. However, both parties agreed to settle the matter to bring the costly and prolonged litigation to a conclusion:
“Reaching a settlement is in the best interest of all parties involved and will enable the Willowton Group and the Commission to resolve longstanding disputed litigation, to put these matters to rest and to move forward constructively”.
Future conduct
Under the terms of the consent agreement confirmed by the Tribunal, Willowton agrees to refrain from engaging in any anti-competitive conduct that may be in contravention of the Act in future - and to develop and implement a competition law compliance program as part of its corporate governance framework.
Full and final settlement
This consent agreement is entered into in full and final settlement of the Commission’s complaint.
The Commission confirms that there are no other matters currently under investigation involving Willowton.
Willowton will withdraw its review application in the North Gauteng High Court with each party bearing its own legal costs.