Abstract
This paper evaluates the possible cross-border nature of a cartel uncovered and prosecuted in the bitumen industry in South Africa. The paper assesses whether the cartel in South Africa could have had an appreciable effect in the neighbouring states in the Southern Africa Customs Union (SACU) region, given their close economic integration and trade ties with South Africa. Qualitative and quantitative data analysis were undertaken to assess the possible impact of the cartel. First, a qualitative assessment of the industry stakeholders was conducted to evaluate competition in the bitumen industry within the SACU region. This covered the structural and behavioural characteristics of the industry which renders it susceptible to collusion. Second, trade data was used to demonstrate the dependency of the SACU member states on South Africa for their bitumen imports and an analysis of the pricing trends derived from the import prices was conducted. The trade data demonstrated that the SACU member states were almost wholly dependent on South Africa for their bitumen needs for the duration of the cartel, which was produced and supplied by the companies implicated in the cartel. Similar pricing trends to South Africa were also found in the SACU region. This suggests that the effects of the cartel may have extended beyond the South African borders. The contribution of the study is to highlight the significance of screening and timeously investigating cartel conduct prosecuted in neighbouring countries in cases where there is significant trade dependency, as these may have an appreciable impact on regional markets.
M.Com. (Competition and Economic Regulation)