Parmalat facing South African alleged market dominance abuse probe

01-Dec-2014 - Last updated on 01-Dec-2014 at 17:03 GMT

The South African Competition Commission is probing allegations that Parmalat abused its dominant position in the country's dairy sector.

During a November 25 meeting, the Competition Commission authorized the launch of a formal complaint against Parmalat South Africa for "alleged abuse of dominance."

Evidence Parmalat operates a bonus scheme for milk farmers emerged during a separate investigation related to exemption applications filed by Southern African Milk Cooperative (SAMILCO) on behalf of its members.

"Information obtained by the Commission during the course of its assessment of Samlico's exemption applications revealed that Parmalat operates a bonus scheme which it uses to reward milk farmers for the continuous supply of raw milk in the Western and Eastern Cape Provinces."

The alleged conduct may, the Competition Commission said, equate to a violation of Sections 8c and 8d(i) of the South African Competition Act.

Under Section 8c, it is forbidden for a dominant firm to "engage in any exclusionary act...if the anti-competitive effect of that act outweighs its technological, efficiency or other pro-competitive gain."

Section 8d(i) meanwhile dictates it is prohibited for a dominant firm to require or induce "a supplier or customer to not deal with a competitor."

Attempts to contact Parmalat South African were unsuccessful.