COMPETITION COMMISSION

MEDIA RELEASE NO 18   
 

25 MAY 2006

The Commission refers Sasol Chemical Industries to the Tribunal

The Competition Commission (‘the Commission’) has referred a complaint against Sasol Chemical Industries (Pty) Ltd (‘Sasol’) to the Competition Tribunal (‘the Tribunal’) for alleged anti-competitive conduct in the market for LAN, a nitrogen based fertilizer.  This follows a complaint lodged by Profert (Pty) Ltd (‘Profert’) alleging that Sasol is abusing its dominance in the market for the supply of LAN by charging discriminatory prices and by refusing to supply Profert. 
 

Ammonia is an essential ingredient in the manufacturing of LAN, and Sasol accounts for more that 90% of ammonia production in South Africa, which is a by-product of its primary operations.  Consequently, Sasol is the only company that locally produces enough LAN to meet the demands from wholesalers as well as retailers and exporters.  Sasol is active in all levels of the supply chain of LAN. 
 

The Commission’s referral is based on the following contraventions of the Act: 
 

• collusion by constructing and allocating markets;
• abuse of dominance - committing an exclusionary act by committing itself to sell and selling LAN to Yara SA (Pty) Ltd (‘Yara’) on preferential terms concerning price and line of supply; and
• prohibited price discrimination by committing itself to sell and selling LAN to Yara on preferential terms concerning price and discounts.