Irvin & Johnson and Karan Beef have been charged with dividing markets in the supply of processed beef products such as beef burger patties, steak sizzlers, crumbed beef steaklett, viennas and boerewors.
The investigation was initiated by the Commissioner in September 2017, against the businesses for contravening section (4)(1)(b)(ii) of the Competition Act.
The investigation found that, from 2000 until recently, Karan Beef and Irvin & Johnson entered into a manufacturing agreement, under the terms of which Karan Beef would stop producing certain processed beef products for its own account and produce on behalf of Irvin & Johnson.
According to the Competition Commission, the agreement further entailed that Karan Beef should not sell certain of its processed beef products to certain customers, which were reserved for Irvin & Johnson. This conduct amounted to division of markets by allocating specific types of goods and customers, said the Commission.
Karan Beef has admitted guilt, settled with the Commission, and paid an administrative penalty of R2,700,000, while Irvin & Johnson is reportedly fighting the charges and the case is being referred to a Competition Tribunal. The Commission has asked the Tribunal to impose an administrative penalty of 10% of Irvin & Johnson’s annual turnover.
Located in Johannesburg, Karan Beef was established in 1974 and now manages 150,000 head of cattle. Irvin & Johnson was founded in 1910, focusing mainly on fish, but has since branched into the chicken and beef categories.