CCAC rules against shipping body in price-fixing complaint

THE Competition and Consumer Affairs Commission (CCAC) has ruled against the Shipping Association of Guyana (SAG) in a price-fixing case following a complaint filed against the body by businessman Mahindranauth Jaikarran owner of JD Transport Services.

The complainant provides haulage service for containers from terminals operated by the members of the SAG. Jaikarran, in his 2017 complaint to the CCAC, had accused the SAG of engaging in anti-competitive behaviour by agreeing to fix rates for the haulage of containers from terminals operated by its membership, with the intention of disrupting the natural market flow to the advantage of the SAG.

According to a release by the CCAC, the SAG members who were involved in the issue include: Muneshwers Ltd, Demerara Shipping Ltd, John Fernandes Ltd, Guyana National Industrial Company Inc. and the Guyana National Shipping Corporation. The matter was heard by the commission, chaired by Mr. Ronald Burch-Smith, Commissioners Ms. Rosalie Roberston, S.C. and Ms. Pradeepa Bholanath.

Evidence was provided by both the SAG and Mr. Jaikarran. Evidence presented showed that the terminal operators imposed handling fees for the private haulers which is not charged by the SAG members, which give them “a price advantage vis-a-vis the private hauler, to the extent of the handling fees.”

The commission in its findings stated that, “We are satisfied that the 15th July decision of the Shipping Association and adopted by the five terminal operators was an agreement within the meaning of Section 20 of the Consumer Affairs Act. It distorted a competitive environment among terminals for services provided by them to consumers generally, that is to the shipping lines and agents, importers of goods and any person or entity which had the option to exercise choice or influence where their goods were shipped. The private haulers had little choice in this matter, but by imposing the agreed rate on private haulers in a concerted manner, distorted competition and gave themselves an unfair and unlawfully implemented advantage.”

The commission also ruled that SAG members with immediate effect terminate the price-fixing agreement which is reflected in the SAG’s memorandum of 15 July, 2017. Each of the five terminal operators has been ordered to pay the sum of $3,843,000 within six weeks of the date of the order. The CCAC said price-fixing is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point. This benefits all businesses or individuals that are on the same side of the market involved in the conspiracy, as the prices are either set high, stabilised, discounted or fixed.”

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