Unilever and South Africa’s competition regulator have reached a settlement over claims the FMCG major colluded in the manufacture and supply of edible oils and margarine.

In 2017, South Africa’s Competition Commission alleged Unilever and fats and oils supplier Sime Darby had struck a deal that violated the country’s competition laws.

The Commission said the companies had “entered into a sale of business agreement, which contained a clause in terms of which they agreed not to compete with each other in respect of certain pack sizes of margarine and edible oils”, in contravention of competition rules.

In a statement a week later, the regulator said Sime Darby agreed to pay an administrative penalty of R35m (then $2.7m), which the Commission said was less than 10% of the firm’s annual turnover for the year ended February 2012, in addition to other measures regarding its future conduct.

On Thursday (13 July), more than six years on, the Commission outlined a deal with Unilever, in which the manufacturer had agreed to pay a similar penalty of R16m “without an admission of liability”.

Under the deal, Unilever has also agreed to increase how much it spends on local products and services by at least R340m over a period of four years.

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The company will also set up an “enterprise and supplier development fund” worth R40m to provide interest-free business loans to “black-owned entities” working in manufacturing, logistics and wholesale in South Africa.

“With agreements like the one with Unilever, the Commission preserves the spirit of healthy competition, protects the rights of consumers, and paves the way for a thriving marketplace built on integrity and shared prosperity,” Competition Commissioner Doris Tshepe said.

Unilever, which sold its margarine business in 2018, declined to comment when approached by Just Food.