Stuttaford Van Lines charged with 649 counts of tender collusion

Stuttaford Tender Collusion
03 Aug 2017

Furniture removal company, Stuttaford Van Lines (Pty) Ltd (Stuttaford), has been charged with 649 counts of collusive tendering, in relation to hundreds of government tenders issued for furniture transportation.

This includes tenders issued by the Presidency, Parliament, the SA Secret Service, the SA Police Service, the National Prosecuting Authority, SARS, the Reserve Bank, the Department of Justice, the Public Protector as well as SOEs and private companies.

Stuttaford faces the largest number of charges, as one single company, in the history of anti-cartel enforcement by the Commission. The Commission is asking the Tribunal to fine the company 10% of its annual turnover on each of the 649 charges.

The matter emanates from a Commission investigation that uncovered widespread and deep-rooted anticompetitive and collusive conduct in the furniture removal market. The investigation revealed Stuttaford colluded with its competitors from at least 2007 and entered into discreet collusive agreements relating to the furniture removal tenders, mostly involving government departments.

This involved cover quotes being submitted as part of the tender processes. Cover quotes are prices provided by a company that wishes to win a tender, to another company that does not wish to do so.

The case has been referred to the Tribunal for adjudication.

Settlements

All the companies found to have colluded with Stuttaford have subsequently settled with the Commission. These are JH Retief Transport CC, Cape Express Removals (Pty) Ltd, Patrick Removals (Pty) Ltd and De Lange Transport (Pty) Ltd.

Background

In November 2010 the Commissioner initiated a complaint into alleged collusive conduct in contravention of section 4(1)(b)(i), (ii) and (iii) of the Competition Act, in the market for the provision of furniture removal services. The Commissioner initiated the complaint in terms of section 49B(1) of the Act.

The Commission found that in the furniture removal industry, a general requirement is that the removal of furniture of government employees requires at least two quotes in order to be financed by government. In this regard, the furniture removal companies had an arrangement that the company 2 approached first would source the second quotation on behalf of the client from its competitor. The first company would stipulate the price at which its competitor should price the tender. The company that requested the quotation would also request its competitor to send its quote directly to the customer. This type of quotation is known as a cover quote. It is a price provided by a company that wishes to win a tender to another company that does not wish to do so.

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