Two Joburg fire control firms feel the heat as they're fined millions for cartel conduct

The Competition Tribunal has found two Johannesburg-based fire control firms guilty of fixing prices, dividing markets and tendering collusively in the market for supplying, installing and maintaining fire control and protection systems.

Cross Fire Management (Pty) Ltd has been ordered to pay a fine of R12.9m and Belfa Fire (Pty) Ltd ordered to pay R10.1m after the conclusion of a 2017 cartel case emanating from a complaint against seven firms that supply, install and maintain fire control and protection systems.

In a statement on Friday, the tribunal said both companies admitted they engaged in collusive tendering/cover pricing before the promulgation of the Competition Act in 1999.

“While we accept that we would not enjoy jurisdiction over conduct in that period, the fact that it occurred is something we can have regard to in the process of characterising it. That the cover pricing arrangements or understanding persisted over so many years suggest that this was an overall arrangement or understanding among the firms which simply continued after the promulgation of the act.” 

It said there was no other reasonable explanation why the firms continued with this conduct with relative ease over so many years unless there was a general agreement, understanding or arrangement among them that they could engage in cover pricing and collude from time to time.

“Thus, we conclude that the nature of the conduct in this matter was not once-off ad hoc instances of cover pricing or collusion on tenders but a long-standing overall arrangement, understanding or agreement among the respondents involving collusive bidding, cover pricing and customer allocation.” 

It said by the time the tribunal hearing commenced, four of the respondents (Afrion, FPS, Fireco and Fireco Gauteng) had reached settlements with the Competition Commission.

The case against another fire control firm, Tshwane Sprinklers CC, was dismissed due to insufficient evidence.

“Tshwane denied its involvement in the cartel and the tribunal found that the commission had failed to prove its case against the firm,” the commission said.

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