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The Competition Commission said on Thursday it had reached a settlement with Unilever over alleged market division of margarine, with the global consumer goods giant agreeing to, among other things, a R16 million administrative penalty and to provide interest-free loans to qualifying black businesses.
In 2017 the commission referred a case against Unilever and Malaysia's Sime Darby Hudson Knight for prosecution over possible division of markets between 2004 and 2013. The commission’s investigation found that the two companies agreed not to compete with each other in respect of certain pack sizes of margarine and edible oils.
At the time, the commission, which acts as an investigating and prosecuting body, said when Unilever sold its refinery business to Sime Darby in 2004 the parties had reached agreements, including that Unilever would not supply industrial customers with its Flora-branded edible oils. Among other agreements, Sime Darby agreed to not supply retail customers with its Crispa-branded edible oils. Sime Darby settled the matter with the commission in July 2016.
The commission said on Thursday in terms of its settlement agreement with Unilever, the company agreed to the administrative penalty without an admission of liability. The settlement is still subject to approval from the Competition Tribunal, which serves as a court.
In addition, Unilever has agreed to a range of initiatives, including that it will increase the annual value of its procurement of products and services from local entities by a minimum of R340 million over a period of four years.
Unilever will also establish an enterprise and supplier development fund to the value of R40 million, which will provide interest-free business loans to qualifying black-owned entities in the manufacturing, logistics, and wholesale industries in South Africa that meet Unilever’s credit and selection criteria, the commission said in a statement. This includes black-owned manufacturing companies requiring startup funds to enter the logistics, wholesale, and distribution industries.
The consumer goods company has further agreed to donate hygiene, disinfectant, and oral care products to the value of R3 million to no fewer than 18 780 public schools over a period of five years.
The London-headquartered group's more than 400 brands include Dove, Lux, OMO, Surf, Sunlight, Domestos as well as Magnum and Ben & Jerry's.
Unilever, however, has exited the spreads business worldwide, with Remgro acquiring its SA spreads business - Rama, Flora, Stork, Rondo, Marvello and Meadowland - for R4.9 billion in cash in 2018, while also giving up its shareholding in Unilever SA.
