Competition Commission rules against Shipping Association in price-fixing case

THE Competition and Consumer Affairs Commission (CCAC) has ruled unanimously against the Shipping Association of Guyana (SAG) in a price-fixing case stemming from a complaint brought by businessman Mahindranauth Jaikarran.

Jaikarran is the owner of JD Transport Services.
The complainant provided haulage service for containers from terminals operated by the members of SAG.

According to a press statement from the Ministry of Business, Jaikarran in his 2017 complaint to the CCAC accused the SAG of engaging in anti-competitive behaviour by agreeing to collude 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.

The SAG members who were involved in the issue include Muneshwers Limited, Demerara Shipping Limited, John Fernandes Limited, the Guyana National Industrial Company Inc. and the Guyana National Shipping Corporation.

The matter was heard by the commission chaired by Ronald Burch-Smith,and Commissioners Rosalie Roberston, S.C. and Pradeepa Bholanath. Evidence was provided by both the SAG and Jaikarran.

Evidence presented showed that the terminal operators imposed handling fees for the private haulers that are not charged by the SAG members and which gave them “a price advantage vis-a-vis the private hauler, to the extent of the handling fees.”

“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,” said the commission in its findings.

“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 them 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 July 12, 2017. Each of the five terminal operators was ordered to pay the sum of $3,843,000 within six weeks of the date of the order.

“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,” said the commission.

The Competition and Consumer Affairs Commission (CCAC) was established in 2006 and became fully operational in 2010. The commission functions objectively in executing the laws governing two acts, namely, the Competition and Fair- Trading Act N0. 11, 2006 (CFTA) and the Consumer Affairs Act N0. 13 2011 (CAA).

Share this post?